\’The curse of the change control mechanism\’ - article featured in the magazine of the Society for Computers & Law (SCL) in May 2011

1. Contracts
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The Curse of the Change
Control Mechanism
W
e live in fast- The current pace of Such an approach works
moving times. innovation doesn’t just affect well for commoditised products
The current pace branded products. All aspects and services which can be
of innovation is of information technology are defined upfront, and there
exciting – but relentless, and affected, and all products and will always be a place for the
potentially daunting for anyone services that are underpinned traditional contract models.
trying to keep up. by information technology However, many organisations
In the technology are affected. And if any of are in the business of
sector, for example, those products or services are developing innovative and/or
Apple sold 3 million procured from third parties, the complex products (eg software
iPads in the first contracts with the third parties development) and services (eg
80 days following are also affected. the transformation of existing
its release in April services in business process
2010.1 In less than Traditional contract models outsourcing). The issue here is
a year this has Traditional contract models were that the products/services cannot
spawned a brand designed for commoditised be precisely defined upfront.
new market for tablet products and services. They The ‘Ronseal label’ is essentially
computers, and are brittle and do not readily conceptual and only represents
changed the face embrace change. This is an approximate estimate of
of computing. That because the products and what is required. There is often
is great news for services are defined upfront, great uncertainty surrounding
consumers and and any change to this definition the definition of these innovative
Contract change great news for requires an amendment to and/or complex products and
Apple, but it can be the contract, which is usually services, and in the course of
management and challenging for the governed by the change control the supplier trying to deliver what
competition. mechanism. Instead of the the customer actually wants
the limitations of the Nokia’s recent change control mechanism there will inevitably be change.
quarter-end results embracing change, it is
traditional system for show how quickly a generally regarded as fettering The ‘Cone of Uncertainty’4
company’s market and inhibiting change. Researchers have found
dealing with change are share can evaporate In a traditional contract that in software development
if it doesn’t keep up. for the supply of products projects estimates are subject
the topics covered by In just one quarter and/or services, the products/ to predictable amounts of
Susan Atkinson and Nokia’s share of the
smartphone market
services are described in
the contract, the delivered
uncertainty at various stages
throughout the project. In this
Gabrielle Benefield. dropped from 38%
to 31%, because
products/services are checked
for conformance with the
context estimates could outline
how much a feature set will cost
of its failure to contractual description, and and how much effort will be
They advocate a better produce devices that various contractual rights and required to deliver that feature
can compete with obligations arise, depending on set, or they could outline how
way Apple’s iPhone and whether or not the products/ many features can be delivered
smartphones using Google’s services meet the contractual for a particular amount of effort
Android operating system.2 description. This approach or schedule. The ‘Cone of
In the words of Nokia’s chief is best encapsulated by the Uncertainty’ (see figure overleaf)
executive ‘They changed the expression made famous by shows how estimates become
game, and today, Apple owns the Ronseal advert ‘It does more accurate as the project
the high-end range’.3 exactly what it says on the tin’. progresses.5
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2. Contracts
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of products/services, half of
those specifications will become
obsolete by the end of month
6, half of the remaining half (ie
1/4) will become obsolete by
the end of month 12, half of the
remaining quarter (ie 1/8) will
become obsolete by the end of
month 18, and so on. Hence, by
the end of month 18, according
to the University of Missouri
studies, only 1/8 (or 12.5%) of
the contractual specifications
for the products/services will
still possess any inherent value.
If the University of Missouri
studies are to be relied upon,
the implications for commercial
Software development is a accuracy that it is possible services, but these projects contracts are enormous.
process of gradual refinement. to achieve in estimates at are also increasingly subject to This would mean that if a
Initially there is a product different points in a software change from external influences. project is running six months
concept (the vision of the development project. This is for The significance of the late, not only will the return on
software to be delivered) and two key reasons. First, the Cone impact of change on the investment be reduced, but the
that concept is refined, based of Uncertainty represents the contractual specifications for project is less likely to deliver
on the product and project error in estimates created by products and services cannot be what the customer actually
goals. Software development skilled estimators. Secondly, the understated. Studies undertaken wants. Even if the project runs
consists of making literally Cone of Uncertainty is modelled at the University of Missouri, according to plan, if the project
thousands of decisions about against well controlled projects. Kansas City, demonstrate that is scheduled to run for more
all the feature-related issues So, if a software development not only does the inherent value than a few months the parties
of the software. Uncertainty project is not well controlled or of the specifications for products have to expect changes.
in a software estimate results the estimators are not skilled, and services decay over time It is therefore essential that
from uncertainty in how the the project will not drive out but that the pattern of the commercial contracts are able
decisions will be resolved. As enough variability to support erosion of their value is similar to adapt to the current pace
a greater percentage of those more accurate estimates, and to the pattern of decay exhibited of ongoing and continuous
decisions are made, the level of it is likely that at any point in by an unstable radioactive atom. erosion of the inherent value in
uncertainty should be reduced, time the estimates will be less Unstable radioactive atoms any defined specifications for
and therefore the accuracy accurate than the Cone of decay exponentially. Their products/services. However, in
of the estimates should be Uncertainty would suggest. rate of decay is described by the traditional contract models
increased. The presence of variability, reference to a ‘half-life’, which the parties generally have to
In other words, the accuracy and therefore uncertainty, is not is a measure of the period of rely on an upfront description
of a software estimate depends limited to software development time it takes for the substance of the products/services in
on the level of refinement of projects. It is also found, undergoing decay to decrease conjunction with the change
the software’s definition.6 The although to a lesser degree, in by half.7 control mechanism to deal
more refined the definition, the any project for the development According to the University with any changes to that
more accurate the estimate. of innovative and/or complex of Missouri studies, the half- description.
The reason why the estimate products and/or services. life of the value of a set of
contains variability is that the contractual specifications for The limitations of the change
software development project The erosion of the value products and/or services has control mechanism
itself contains variability. The inherent in contractual been rapidly decreasing. In Unfortunately the change control
only way to reduce the variability specifications 1980 this was around 10–12 mechanism is being pushed
in the estimate is to reduce the Not only is there inherent years, by 2000 it had fallen to to breaking point. When the
variability in the project. variability, and therefore 2–3 years, and it is currently change control mechanism
It is important to appreciate uncertainty, in any project for running at about 6 months. was originally devised, it
that the Cone of Uncertainty the development of innovative In other words, if a contract served a useful purpose in that
represents the best-case and/or complex products and pre-defines the specifications it identified and segregated
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changes in the form of change change falls within the existing subjected to the changing (and continuous cycle of inspecting
requests. These were worked specifications and does not often conflicting) demands of the process for correct operation
on separately from the main represent scope creep. a panel of armchair generals, and results, and adapting the
project, so that the status quo The change control was transformed into a hybrid process as needed. There are
of the main project could be mechanism serves as a of a troop carrier, a scout three key elements to controlling
preserved until the impact of the distraction to the main project. vehicle and an anti-tank weapon an empirical process:
change had been fully analysed
and signed off by the parties.
In any project, no matter how
large the organisation and how
platform. Seventeen years later
and at a cost of $14 billion
• Visibility. Those aspects
of the process that affect
However, what we are big the project, only a finite the resulting product was ‘a the outcome must be visible
seeing today is that projects are amount of resources will have troop transport that can’t carry to those controlling the
subject to so many changes been allocated to the project. troops, a reconnaissance vehicle process.
that the scope of the change
requests is increasingly wide-
This is for the simple reason
that any project has to be
that’s too conspicuous to do
reconnaissance, and a quasi-
• Inspection.the process must
aspects of
The various
reaching, there can be multiple justified on a cost-benefit basis. tank that has less armor than a be inspected frequently
change requests under review When a change is requested, snowblower, but carries enough enough so that unacceptable
at any one time, and there a member of the team has to ammo to take out half of D.C.’.8 variances in the process can
can be change requests to the be redeployed to analyse its In terms of software be detected. The frequency
change requests. The process of impact. If more change requests development, multiple of inspection has to take into
analysing the impact of change are made, the number of team change requests can result consideration the fact that
requests can take so long and members (or the associated in duplications of code and/ the process is likely to be
be so extensive that it has a number of man hours) taken off or conflicts in the code. This in changed as a result of the
destabilising effect on the main the main project and redeployed turn can mean that the software inspection. The inspector
team: they are only too aware to change management is more prone to failure, more must possess the skills
that their current work may be activities increases, leaving the expensive to maintain, and to assess what they are
rendered nugatory following the main team less well resourced. that subsequent design and inspecting.
approval of the change requests.
The bigger the proposed
Given the wide-reaching
impact of many of the change
development of the software will
be more expensive.
• determines from the
Adaptation. If the inspector
change, the longer the hiatus requests, it is not appropriate inspection that one or more
while it is being analysed, and for the analysis of the change Empirical process control aspects of the process are
the more damaging the effects to be segregated and analysed In projects for the development outside acceptable limits and
can be. by a small sub-set of the team. of complex and/or innovative that the resulting product
Instead of facilitating The impact of the change products and/or services, where will be unacceptable, the
change, the change control should be considered by the the amount of variability – and inspector must adjust the
mechanism actually serves team as a whole and its impact therefore uncertainty – is process or the material being
to restrict change. The whole considered across all aspects of significant, it is not practical processed. The adjustment
process of documenting the solution. to work from defined plans. must be made as quickly as
changes is time-consuming, Too often, the change Instead, Scrum advocates possible to minimise further
consumes valuable resources, control mechanism results the use of empirical process deviation.
can be expensive to implement, in add-ons without sufficient control, that is, a form of control To achieve empirical process
and adds no real value to the consideration of which features driven by experience and control, Scrum establishes an
project. It simply attempts to can be removed and how the experimentation:9 iterative, incremental framework.
keep the contract in step with overall build can be rationalised. ‘Laying out a process that It splits:
the pace of change.
Furthermore, the change
This is because there is very
little incentive on the part of
repeatedly will produce
acceptable quality output
• small, concrete deliverables,
the work: into a list of
control mechanism actually the supplier to carry out this is called defined process sorts the list by priority and
fosters ‘bad behaviour’ between exercise. What was once an control. When defined estimates the relative effort
the parties because it polarises elegant solution with integrity process control cannot of each;
their interests. In a fixed price
contract it is not uncommon for
may evolve into some kind of
‘Frankenstein build’.
be achieved because
of the complexity of the
• the time: into short fixed-
length iterations with
a supplier to attempt to improve This is best illustrated by the intermediate activities, potentially shippable code
its profit margin by means of development of the M2 Bradley something called empirical demonstrated after each
inflating the charges for change Infantry Fighting Vehicle (IFV) process control has to be iteration; and
requests. And the customer is
put on the defensive, attempting
in the US. Originally developed
as an armoured personnel
employed.’ 10
The basic attribute of empirical
• the organisation: into self-
small, cross-functional
to justify why a proposed carrier, the Bradley, after being process control constitutes a organising teams.
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The Evolutionary Contract or regulatory constraints). at any point in time that is key There are a number of
Model The concept of the solution is to building flexibility into the different charging models
A new commercial contract gradually refined, based on solution. available. Each of these has
model, known as the the product and project goals The development of the advantages and disadvantages.
Evolutionary Contract Model, and within the parameters of solution is conducted in a The optimum charging model is,
has been created in conjunction the relevant constraints. As series of time-boxed iterations to a certain extent determined,
with some of the leading thinkers the solution evolves, many of work. The iterations are of by the customer’s level of
on Agile and Lean for use in things will change along the fixed duration. They end on a experience of working in an
projects for the development way. Empirical process control specific date whether the work Agile and Lean way and by the
of innovative and/or complex is employed to ensure that has been completed or not, level of trust existing between
products and/or services. The the solution evolves within the and must never be extended.11 the customer and supplier.
main influences underpinning parameters of the contracted Subsequent iterations build upon Teams that are relatively new
this model originate in Agile, scope. the working solution increment to Agile and Lean often choose
Lean Software Development produced in earlier iterations. to use a time and materials
(Lean) and systems thinking. The An overview of the At the beginning of each model (which provides more
relevant Agile methodologies are Evolutionary Contract Model iteration the customer selects accountability than in the
Scrum, Extreme Programming The following overview those SBIs from the solution traditional contract models);
(XP), Evolutionary Project focuses on the construct of backlog which are the next most teams that have been working
Management (Evo) and DSDM the Evolutionary Contract important for the customer. in an Agile and Lean way for
Atern. Model. This overview is merely Once the supplier has agreed some time may choose to use
Unlike the traditional intended to demonstrate how upon those SBIs which it a charging model based on
contract model, the Evolutionary the principles of Agile and Lean believes it can complete during units of work such as story
Contract Model is not based can be reflected in a contract. that iteration, those SBIs are points or function points. More
on defined process control. In It does not describe how the effectively ‘frozen’. They cannot advanced teams are looking to
other words, it does not place Evolutionary Contract Model subsequently be amended by link charges to a quantifiable
any reliance upon pre-defined regulates the full life cycle of the anyone during the iteration, measure of value.
plans and specifications. For project, nor does it describe how and the acceptance criteria for A team is established by the
this reason, there are no a project which involves multiple those SBIs are agreed to by supplier to develop the solution.
specifications or detailed plans and distributed teams should the customer and the supplier The team is both empowered by
in the contract. be structured. The Evolutionary before work on the SBIs starts. the customer and accountable
The fact that there are no Contract Model caters for these Each SBI is defined, built to the customer to deliver the
specifications for the solution in possibilities, but they are beyond and tested in a fast, concurrent project. On the one hand the
the contract leads to a couple of the scope of this article. loop. An SBI is evaluated for team has full discretion on how
significant consequences. First, All of the customer’s desired acceptance, and when it passes it conducts each iteration, but
there is no need for a change features of the solution are the test, another SBI is selected on the other hand the team
control mechanism, because captured in a central repository from the solution backlog. If it is expected to self-organise,
neither the charging model nor known as the solution backlog. fails, it is re-worked – on the self-manage and self-achieve
the supplier’s focus of work The solution backlog does not spot – until it passes the test. the objectives of the iteration.
is linked to any contractual form part of the contract and has The customer assesses whether This means that the team must
specifications. Secondly, there no contractual status. However, each SBI is ‘done’, and therefore be cross-functional and must
are no contractual acceptance the solution backlog must be completed, by checking whether contain a sufficiently wide skill
tests because there is no supply within the scope of the contract. the solution increment that is set for the solution to be fully
of products/services against The items on the solution delivered to the customer at completed by the team without
contractual specifications. backlog (the solution backlog the end of the iteration meets external input. There must
Instead, the Evolutionary items or SBIs) are prioritised the criteria defined and agreed be representation from the
Contract Model uses empirical in terms of importance to the by the customer and supplier customer on the team, but the
process control to manage customer, and may take the form at the start of the iteration. To roles of the supplier and the
complexity, variability and of products (including software), the extent that the solution customer are quite different.
change. The contract sets out deliverables or services. The comprises software, this means Benefits of the
the overall scope of the solution. solution backlog may be, and that the code must be fully Evolutionary Contract Model
This is expressed in terms of the should be, amended and refined tested, working and potentially The Evolutionary Contract
vision statement for the solution, by the customer throughout deployable.12 Warranties could Model reduces the element of
the product and project goals, the life of the project. It is this be given by the supplier in uncertainty and therefore risk
and any relevant constraints ability of the customer to make terms of the solution increment in the project both by breaking
(such as schedule constraints changes to the solution backlog meeting the pre-defined criteria. down the solution into many
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small solution increments and
Endnotes
by breaking down the time into
1 ‘Apple sells three million iPads in 80 days’ press release on the Apple web site http://www.apple.
short fixed-length iterations. At
com/uk/pr/library/2010/06/22ipad.html.
the end of each iteration the
2 ‘Nokia loses smartphone market share’ by Andrew Parker, published in the FT on 27 January 2011.
customer is given visibility of
3 Stephen Elop, Nokia chief executive, as quoted in the Times on 10 February 2011.
the fully completed solution
4 With thanks to Steve McConnell whose book ‘Software Estimation: Demystifying the Black Art’
increment. This gives the
provides the basis for this section.
customer the opportunity and
5 The original conceptual basis of the ‘Cone of Uncertainty’ was developed by Barry Boehm in 1981.
the power at regular intervals to
The model has since been validated, based on data from a set of software projects at the US Air
refocus the work of the supplier,
Force, NASA’s Software Engineering Lab and other sources.
and potentially to refine the
6 According to research conducted by Luiz Laranjeira in 1990.
ultimate solution, based on what
7 Al Goerner at the University of Missouri, Kansas City.
the customer has actually seen.
8 The development of the Bradley M2 fighting vehicle was satirised in the movie clip ‘The Pentagon
This ability of the customer to
Wars’, available on YouTube http://www.youtube.com/watch?v=pyakI9GeYRs.
plan adaptively throughout the
9 Scrum is the most popular Agile methodology, according to the survey ‘State of Agile Development’
term of the project is incredibly
commissioned in 2009 and sponsored by VersionOne.
powerful.
10 ‘Agile Project Management with Scrum’ by Ken Schwaber. Ken Schwaber and Dr Jeff Sutherland
The Evolutionary Contract
are the co-founders of Scrum.
Model facilitates a fast and
11 There is a variation to this in the Evolutionary Contract Model based upon the principles of
cost-effective development
Kanban.
process. The solution increment
12 Although the software is capable of being deployed, the customer may choose not to deploy the
delivered at the end of each
software until it is at a greater level of maturity.
iteration builds upon and is fully
13 The Pareto principle was developed by Vilfredo Pareto, a noted economist and sociologist, in the
integrated with all earlier solution
late 1800s.
increments. In other words, the
14 Standish Group study reported at XP 2002 by Jim Jonson, Chairman; internal software products.
solution starts to take shape
15 The US Department of Defense used to be one of the most frequent users of the traditional
from the very first iteration and
waterfall methods of development. Throughout the 1980s and into the 1990s most projects run by the
continues to develop from there.
US Department of Defense were mandated to follow a waterfall cycle of development as documented
At any point in time the partially
in the published standard DOD STD 2167. That is no longer the case. Under the 2010 National
developed solution will address
Defense Authorization Act President Obama gave Defense Department officials a deadline of July
the customer’s most current
2010 to create new acquisition processes that can deliver IT systems in no more than 18 months by
needs because at the start of
incorporating certain Agile principles.
each iteration the customer has
16 ‘5th Annual State of Agile Development Survey’ conducted by VersionOne, dated 7 November
the opportunity to refocus the
2010.
efforts of the supplier.
17 ‘Agile methodologies: Survey results’ conducted by Shine Technologies, 2003.
The customer may in fact
be able to achieve its objectives
for the solution and derive 64% of software features are concluded that 75% of the visibility.16 On all the measures
14
value from the completion of typically never or rarely used. projects failed or were never investigated by VersionOne,
less than half of the features used.15 at least 94% of respondents
that it originally thought were Statistics on traditional and Those results can be said the performance was
necessary to build the solution, Agile projects contrasted with the results no worse and, in most
applying the Pareto principle. Projects using Agile have been of several major studies to circumstances, was improved
According to the Pareto principle found to be more successful and determine the effects of using over the situation before Agile
(also known as the 80–20 rule), more likely to be delivered on Agile methods to manage adoption. Similarly, according to
for many events roughly 80% time than traditional projects. the development of software. an international survey of 131
of the effects come from 20% According to the Standish For example, according to an respondents conducted by Shine
of the causes.13 It has been CHAOS report for 2009 many international survey of 4,770 Technologies in 2003, 93%
demonstrated, for example, traditionally developed and respondents conducted by of respondents experienced
in software that 80% of the run projects were less than VersionOne in 2010, 46% of productivity increases, 88% of
benefits of an application are successful: 44% were described respondents experienced an respondents experienced quality
derived from the use of just 20% as challenged and 24% failed. improvement in their ability to increases, 83% of respondents
of the features. This is borne out Similarly a report on the failure manage changing priorities, experienced improvements in
by the results of the Standish rates of the US Department of and 39% of respondents customer satisfaction, and 49%
Group study, which reported that Defense projects in one sample experienced improved project experienced cost reductions.17
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Conclusion change within their contracts. Agile and Lean principles has Gabrielle Benefield is Director
Unprecedented levels of change More and more organisations been developed, and legal at the Scrum Training Institute.
arising from the increasing pace are adopting Agile and Lean practitioners should consider this
of innovation are stretching principles for the development as a possible solution. ● Susan Atkinson and Gabrielle
the traditional contract models of innovative and/or complex Benefield are currently writing
to breaking point. Legal products and/or services. A new Susan Atkinson is Legal a book on Evolutionary
practitioners need to find a contract model, the Evolutionary Director at gallenalliance Contract Models, which is due
better way to accommodate Contract Model, based on Solicitors. to be published later this year.
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