Using Agile Approach with Fixed Budget Projects

Using Agile Approach with Fixed Budget Projects April 15, 2009 www.synerzip.com

The Challenge Business Benefit of Agile Approach Mgmt Need For Fixed/Known $ Budget Confidential

Our Experience • 15 Client projects delivered in Fixed-budget Agile • Numerous discussions with Agile practitioners • Research into published work of industry experts Confidential

Software development partner for small/mid-sized technology companies Focus: small/mid-sized technology companies Deep experience in product development, testing, & deployment Handles full software development life cycle Technology and industry domain agnostic Actually reduces risk of development/delivery Experienced software management team Brings in appropriate level of engineering discipline Practices Agile development – responsive, yet disciplined Reduces cost – dual-shore team, 50% cost advantage Offers long term flexibility – allows (facilitates) taking offshore team captive Synerzip in a Nut-shell Confidential

Our Clients - Examples Confidential

Discussion Topics For Today • Highlight characteristics of projects that are good candidates for fixed-budget Agile delivery • Share empirical data from over a dozen fixed-budget Agile projects • Discuss the common DOs and DONTs • Recommend alternative approaches for effectively using Agile in fixed budget situations Confidential Confidential

Key Characteristics • How baked are the requirements • Level of trust between the dev team and the product owner • Timing of (fixed) budget estimate commitment • Maturity and caliber of team Confidential

1. Requirements Baked? • Is the vision and the idea that drives the product evolving from hazy to well defined ? • Is the scope of the market that the product is trying to address becoming more and more accurately defined ? • Is the revenue model thought through as an integral part of the idea ? • Have any real end users started using the product? Is it a startup building out a product idea from scratch or an extension to an existing product? • Is it an existing technology being applied to a new domain or a new technology being applied to an existing domain? • Is it a case of a simple re-write where you are porting an existing product to a new database or a different operating system? New/Innovative Known/”ReWrite” Confidential Confidential

2. Level of Mutual Trust • Mutual trust is a two-way street • Client/product owner apprehensive about • Receiving good quality software • Not getting “ripped-off” (willing to pay only fair/competitive market price) • Don’t want dev team spinning wheels with “$ meter running” • Vendor/dev team apprehensive about • Continued client commitment and involvement • Likelihood of collecting the payment and not being unfairly penalized for over-runs • Are the two sides seeing each other as competing or collaborating? If there are developers on both sides are the experience levels matching? Do they have professional respect for each other? No Trust Complete Trust Confidential

3. Timing of the estimate • Early estimates are inaccurate because • Customer has not yet thought through the requirements • Developers have not yet thought through the design. • Estimates after “iteration zero” are more accurate. • Estimates go on improving as iterations progress. Hence do re-plan and re estimate Upfront After iteration 0 or 1 Confidential Confidential

Do Re-Estimate and Re-plan Confidential Confidential

Fixed Bid with waterfall vs DSDM Confidential Confidential

4. Maturity & Caliber of Team • Domain knowledge- is the customer and established player in the domain? Does the development team have domain experience? • Technical Expertise – Is the customer aware of technical challenges? Does the development team have the technical expertise to address the technical challenges? • Experience level – Are the developers and the product managers well experienced? Inexperienced/Junior Highly seasoned Confidential Confidential

Discussion Topics For Today Highlight characteristics of projects that are good candidates for fixed-budget Agile delivery Share empirical data from over a dozen fixed-budget Agile projects Discuss the common DOs and DONTs Recommend alternative approaches for effectively using Agile in fixed budget situations Confidential Confidential

Fixed Budget Projects at Synerzip Confidential Confidential

When Fixed Budget Agile Works? Confidential Confidential

Common DOs • Wait for at least one iteration before you submit the bid • Keep re prioritizing and re-estimating after each iteration • Listen to the end users’ pain points • Question the product-market definition and the revenue model if its not clear to you. • Add a time buffer, requirements buffer and/or price buffer • Above all, stick with sound design and coding practices. Move some stories out but don’t reduce the story points by compromising quality Confidential Confidential

Common DONTs • Don’t go for a fixed budget if there is lack of maturity in terms of technical or domain knowledge. • Don’t commit to a price until you have at least one iteration completed. • Don’t work in a fixed price for a startup who are still unclear about their product/market or business model. • Don’t sign up if a project has no flexibility on price, requirements, time or resources • Above all, don’t compromise on quality of software delivered or coding standards to fit within the budget Confidential Confidential

Alternative approaches Confidential Confidential

4 Story Points Based Agile Confidential Confidential

Approaches Used Confidential

Recommended Approaches Confidential Confidential

Questions? Agile Software Product Development Partner www.synerzip.com Hemant Elhence, hemant@synerzip.com 469.322.0349 Call us for a free consultation Confidential

Using Agile Approach with Fixed Budget Projects