accelerating agile across the enterprise © 2011 accurev, inc. all rights reserved -1- accelerating...

Accelerating Agile Across the Enterprise

© 2011 AccuRev, Inc. All Rights Reserved -1-www.synerzip.com


AccuRev Proprietary and Confidential Information - © 2011

Measuring Agile’s Economic Impact to Your Organization

Damon Poole

Founder and CTO, AccuRev

6/15/2011



Introduction to Today’s Speaker

Damon Poole, Founder and CTO, AccuRev

Damon has 20 years of methodology and process

improvement experience, running the gamut from small

teams to 10,000-person global development shops. Damon

is a Certified Scrum Master and writes frequently on the

topic of Agile development with an emphasis on Multi-stage

Continuous Integration. His "Do It Yourself Agile" blog is at

damonpoole.blogspot.com; twitter: @damonpoole



A Few Companies We’re Helping to Go AgileA Few Companies We’re Helping to Go Agile



Today’s Key Take-away

Agile Enables Organizations to Focus on Serving the Market Efficiently



Overview

ROI Overview

The I in ROI: Investment (Cost)

Calculating cost the Agile way• Agile techniques

Rethinking who your customer is

The R in ROI: Return (Value)• Increasing Return by reducing waste• Maximizing value• Reducing cycle time

Summary



Return on Investment

Return

Investment

ROI =

Software

Value



Features are Like Scratch Tickets

Predicting return is hard

Cost is easy to measure



Measuring Cost



Traditional Planning

Requirements

Plan

Release Date

Cost

Based on pro-rating the fully-loaded cost of all resources in the plan



Agile Planning

Stories

Backlog

Release Date

Cost = IterationsX VelocityX Cost per point

Assumes Cross Functional Team



Agile Planning Components

User Stories

Story Points

Cross-functional team

Backlog

Iteration length

Velocity



Requirements

3.4 Customer Identification• 3.4.1 A web “cookie” shall be used to uniquely identify visitors• 3.4.2 Each customer shall be associated with a cookie• 3.4.3 Cookies shall be stored in an RDBMS

3.5 Sale presentation• 3.5.1 Each item for sale shall have a button marked “buy” next to

the item• 3.5.2 Selecting the “buy” action shall trigger an order placement

action

3.6 Fulfillment• 3.6.1 By default, all orders shall use the on-file default shipping

information• 3.6.2 If available, all orders will use the customer’s default

payment method• 3.6.3 It shall be possible for the customer to cancel any order for

up to 4 hours after they place that order.



User Stories

“As a user I want to order what I am browsing with a single click.”

As a <user role> I want to <achieve some goal>



Story Points

The relative level of effort of a User Story

Takes into consideration all aspects of implementation: development, test, end-user documentation

Simple to calculate the cost per story point



Scrum MasterScrum Master

Cross FunctionalCross Functional

All needed skillsAll needed skills

Self-organizingSelf-organizing



Backlog Based Prioritization

Business Value

Issue Work Item Type Points

432 User wants layout pleasing to the eye Story 2

420 User wants example templates to choose from Story 3

419 Admin wants zero installation Story 5

612 Manager wants dashboard view Story 5

599 Admin wants LDAP integration Story 5

831 Password reset isn’t working Defect 2

692 User wants automatic todo list generation Story 2

432 User wants easy task entry Story 1

119 User wants subscription-based e-mail updates Story 5

332 Marketing wants fancy splash screen Story 3

516 Admin wants 1-click license update Story 2

533 User wants app to be ready in 3 seconds or less Story 5

619 App crashes on Chrome Defect 5

$$$

$



20pts 2 weeks

40pts 4 weeks

60pts 6 weeks

80pts 8 weeks

100pts 10 weeks

120pts 12 weeks

140pts 14 weeks

160pts 16 weeks

Agile Cadence

Backlog is broken into “iterations”

Iterations have a consistent length, such as 2 weeks

The number of “points” per iteration is the “velocity”

Velocity: 20pts

Velocity: 20pts

Iteration length:

2 weeks

Iteration length:

2 weeks

Backlog



Cost Per Story Point for a Team

$814,307.99 Annual Cost

22 ptsIteration Velocity

26Iterations per year

Annual Velocity 572 pts

= $1,423.62 per point2 weeksIteration length



$31K

$62K

$93K

$124K

Simple Cost Calculation

$155K

$186K

$217K

$248K

Backlog



Re-Framing ROI



Cost and Efficiency vs ROI

Efficiency of individual process steps can be measured

‘Return’ becomes “% of requirements implemented”

Cost becomes a proxy for ROI

Increasing Return requires• a customer and business focus• methods for gauging business value



Who is “The Customer?”

Market/CustomersMarket/Customers

Software Development








Business UnitBusiness Unit





Your offeringYour offering



Increasing Revenueby Reducing Waste



Cost of Delay of a Feature

“Market”emerges

No more value

You decideto do it

The user can use it



Cost of Delay of a Feature

You decideto do it

The user can use it

DeliveryDelay



The Cost of Delay



Cost of Delivery Delay



Specify Design Code IntegrateWrite tests

DocPlan Test> 60% of delivered features not worth the cost of development

Cancelled-or-

“Shelved”

• Waste• Lower morale• Missed opportunities• Distrust

• Waste• Lower morale• Missed opportunities• Distrust

• All cost, no value received• Cost savings all lost• Efficiency gains all lost

• All cost, no value received• Cost savings all lost• Efficiency gains all lost



Additional Lost Revenue

Decision delay

Missing first to market advantages



Maximizing Value



Measuring Relative Value

Frequency of use by the end user

Value to the customer

Percentage of customers that have a specific need



Methods for Estimating Value

Luke Hohmann’s Innovation Games• “Buy a Feature” and other games

Use “Planning Poker” for value with key business stakeholders

Assign percentage of revenue to stories given the expected revenue in a product plan or contract

A combination of the above



Backlog Based Prioritization

Business Value

Issue Work Item Type Points

432 User wants layout pleasing to the eye Story 2

420 User wants example templates to choose from Story 3

419 Admin wants zero installation Story 5

612 Manager wants dashboard view Story 5

599 Admin wants LDAP integration Story 5

831 Password reset isn’t working Defect 2

692 User wants automatic todo list generation Story 2

432 User wants easy task entry Story 1

119 User wants subscription-based e-mail updates Story 5

332 Marketing wants fancy splash screen Story 3

516 Admin wants 1-click license update Story 2

533 User wants app to be ready in 3 seconds or less Story 5

619 App crashes on Chrome Defect 5

$$$

$



Categorizing Value

High Low

Cost

Low Avoid

DoHigh Split

?

Value



Splitting Stories-or-

Panning for Gold



$5Mper lane

$11M per lane10 Lanes:

$50M

10 Lanes: $110MMoney for another

investment: $60M



Splitting Work Along Technical Lines

Back end,infrastructure

Middle layer

Front end

Surveyor wants to create a questionSurveyor wants to create a question



Splitting Work By Value

Back end,infrastructure

Middle layer

Front end

Surveyor wants to create a multiple choice question

Surveyor wants to add a true /false question

Surveyor wants to add a true /false question

Surveyor wants to add a freeform question

Surveyor wants to add a freeform question



Jan Mar May JulFeb Apr Jun Aug Sep

Shorter Cycle Times vs Value

$$$

$$

$$$$

$$$

$$$$

$$

1 month iterations

Facebook

Photo SMS

Second LifeRSS feeds

FacebookSecond LifeRSS feeds

FacebookRSS feedsPhoto SMS

Facebook FacebookRSS feeds

Specify Design Code IntegrateWrite tests

DocPlan Test

Specify



Bringing it All Together



$$$$$$

ResultsResultsTodoTodo

Bank AccountBank Account

ShelvedShelved

CancelledCancelled

UnusedUnused

Customer Value

Customer Value

Tangible Value

Tangible ValueRevenueRevenue

new

old

StrategyStrategyProduct

MgmtProduct

Mgmt


PeoplePeople KnowledgeKnowledge



Chief Product Owner

Continuous Flow

IntInt

IntIntIntInt

Customers

Master Backlog

Master Backlog

Agile TeamsAgile Teams

Short Cycle TimeShort Cycle Time

User StoriesUser Stories

Agile WorkFlowAgile WorkFlow



Product Management

Continuous Flow

IntInt

IntIntIntInt

Customers$$



Key Take-Aways

Maximizing Return on Investment is the ultimate goal

Maximizing ROI is another way of saying “maximizing market efficiency”

The cost of delay generally reduces the gains of minimizing the cost and maximizing the efficiency of development

Reducing cycle time and increasing velocity are better proxies than minimizing cost and maximizing efficiency

Agile has many techniques for reducing cycle time and increasing velocity

Blending of “the business” and “development” is key

Agile enables organizations to focus on serving the market efficiently



Q & A Time…

1-800-383-8170 or+1-781-861-8700

[email protected]

www.synerzip.com

Hemant [email protected]

469.322.0349

Agile Software Product Development Partner



Synerzip in a Nut-shell

1. Software product development partner for small/mid-sized technology companies

Exclusive focus on small/mid-sized technology companies By definition, all Synerzip work is the IP of its respective clients Deep experience in full SDLC – design, dev, QA/testing, deployment Technology and industry domain agnostic

2. Dedicated team of high caliber software professionals Seamlessly extends client’s local team, offering full transparency NOT just “staff augmentation”, but provide full mgmt support

3. Actually reduces risk of development/delivery Experienced team - uses appropriate level of engineering discipline Practices Agile development – responsive, yet disciplined

4. Reduces cost – dual-shore team, 50% cost advantage

5. Offers long term flexibility – allows (facilitates) taking offshore team captive – aka “BOT” option



Synerzip’s Clients



Q & A Time…

1-800-383-8170 or+1-781-861-8700

[email protected]

www.synerzip.com

Hemant [email protected]

469.322.0349

Agile Software Product Development Partner

accelerating agile across the enterprise © 2011 accurev, inc. all rights reserved -1- accelerating...

Documents

agile slide

agile way agile techniques

agile blog

enterprise accurev proprietary

accurev damon

topic of agile development

agile enables organizations

measuring cost slide