agile contracting - killing bureaucracy

Agile ContractingLL.M. Juha Ilola

Agile Saturday X / Agile Estonia15 Feb 2014

Saturday, February 15, 14

© Copyright Reaktor 2014

legal guy @ Reaktor

previously @ major law firm, Sulake

doing legal IT stuff since 2001



Agenda

Killing Bureaucracy

Waterfall Contracts

Agile Contracts



Killing Bureaucracy

Photo Credit: http://www.flickr.com/photos/x_jamesmorris/


http://www.flickr.com/photos/x_jamesmorris/

http://www.flickr.com/photos/x_jamesmorris/


people really do hate bureaucracy.



bureaucracy=

“excessively complicated administrative procedure”.

Source: Oxford Pocket Dictionary via Google



lawyers, procurement, other bureaucrats

excessive, unnecessary administrative complexity.



administrative complexity

- increased initial transaction costs- increased cost of change

- increased non-value-adding work(e.g., unnecessary features, excessive documentation)



bureaucracy=

not only waste by itself, but also a catalyst for waste in

the system.



to eliminate waste, you need to kill bureaucracy.



unfortunately, laws prevent you from killing bureaucrats

like me.



two examples of legal ways to kill bureaucracy



1foot-in-the-door approach:

start small; immediately deliver exceptional results;

kill bureaucracy via internal pressure from the biz guys.



2kill-the-silos approach:

make bureaucrats understand agile / the way

value-adding work is actually done.



from waterfall to agile contract



a zero-sum game approach to collaborative contracts

creates non-optimal contracts, bureaucracy and

waste.



a collaborative contract should be optimized for

successful outcome, not for the (imaginary) interests of

one party.



a beautiful contract provides the the simplest possible solution

for its purpose.



Waterfall Contracts



waterfall contract

=

fixed price + fixed scope



“the Supplier will deliver to the Customer the

software described in Annex 1 for EUR [price] by

[deadline].”



assumptions in the contract dictate what will be done, not the real

(discovered) needs.



Fixed price encourages the

Supplier to put in minimum effort for

the agreed price.



Change Managementthe Supplier will agree to

change only if there is enough money on the

table.

contract is renegotiated throughout the project

(Change Orders).



the contract gives the customer illusion of control, but in fact

the Supplier operates as a black box and

has no incentives for transparency.



if one of the most common causes for IT failures is budget overflow, is price in

“fixed price contracts” really fixed?



Agile Contracts



risks of a software project are best addressed by using agile methods.

not with contract.

agile contract should make it possible to capitalize on the ability of agile

methods to provide the customer with best value for a given budget.



Empiric

Specified



Backlog

Specified in detail

Recognized, required functionalities

Release 1

Fuzzy ideas

Priority



the object of an agile contract should be the performance of service

(as opposed to delivery of specified results).



team members subject to approval of the

customer.

the customer has the right require the change of a team

member at any time, for any reason.



contents of the services (i.e. backlog)

are agreed in accordance with the

agile method.

no separate change management is

necessary.



charged on time & material basis on the

basis of realized hours / days.

set max budget?

payment not tied to approval of results.



Reaktor’s satisfaction guarantee:

if the customer feels that Reaktor has not performed with satisfactory level, they

may notify Reaktor and receive automatic discount

- no questions asked.



indefinite term contract with

2 - 4 weeks’ notice period.

customer’s exit made possible by

assignment of all rights or unlimited license to results.



doge is doge even if you call it cat. Regardless of what you call it, it is not

agile if you do it with waterfall contract.



Thanks!


agile contracting - killing bureaucracy

Business

bureaucracy copyright

google copyright reaktor

fixed scope copyright

fixed price contracts

agile estonia

beautiful contract

ability of agile methods

collaborative contracts