In agile development Time-and-Materials model is the most
suitable and efficient for both customers and vendors. Taking into account of
unstable market conditions and bringing the comfort to both the parties we need
to come up with some typical approaches and tailoring of the agile values.
Whether we like it or not, fixed-price price projects with
Agile are a reality. Each contract will have its own set of problems and will
need a unique solution. In the end, how easy or hard it is to go for a
fixed-price price with Agile will mostly depend on how well the customer
understands agile principles. Usually small scale projects are suitable for
fixed price model.
Below are three approaches suggested to carry out fixed
price projects by with agile concepts by tailoring some of the agile concepts.
These three approaches needs to be used in different scenarios with its
individual execution method.
First Approach: Knowing each other’s (customer and vendors) domain well
First Approach: Knowing each other’s (customer and vendors) domain well
There will be different scenarios while doing the contract
with customer. Sometimes requirements will be very clear. Client will have
clear goals, no more confusion to development team, everything is feasible.
With this scenario we can execute the FP project with agile method by using
more important agile values.
Situation:
1.
Should have good trust level in between customer
and vendor
2.
Requirements are clear with approach and
approved by customer
3.
Technically all the features are feasible
4.
Delivery confidence is high
Tailoring:
1.
Follow “Individuals and interactions over
processes and tools” As Is
2.
Need to alter second value “Working software
over comprehensive documentation”, here we must need customer approved task
plan, approach and milestones
3.
The third value “Customer collaboration over
contract negotiation” has no impacts and do not have importance in this
scenario as we already have the contracts and requirements in place. So here we do not required much customer
collaboration and negotiations.
4.
The fourth and final agile principle value is “Responding
to change over following a plan”. This is the core value of agile principles.
Here we must need to avoid any change which will lead to scope change and
extends the timeline. Smaller changes can be accepted which can be easily done
without extending the timeline and scope.
Execution Instructions:
1.
Identify the requirement and list each module
and tasks.
2.
Prepare the approach document for each task and
get it sign-off from customer technical team
3.
Calculate the efforts and plan the team
accordingly with respect to contract cost and profitability
4.
Take the priority items on top and plan two
weeks duration sprint
Second Approach: Begin
with Time & Material and then move to FP later
This approach can be considered in following situation:
Situation:
1.
When requirements are not clear
2.
Low trust level is between the vendor and
customer
3.
Project need to start in quick time and under
time pressure
4.
Unknown technology to be used
Tailoring:
1.
As said in approach, start with time and
material and for couple of days. Once you reach at first approach situation
then start with first approach process
2.
Follow “Individuals and interactions over
processes and tools” As Is
3.
Need to alter second value “Working software
over comprehensive documentation”, here we must need customer approved task plan,
approach and milestones
4.
The third value “Customer collaboration over
contract negotiation” This is now very important in this situation and need to
be used very effectively
5.
The fourth and final agile principle value is “Responding
to change over following a plan”. In this situation the change requests (CR)
can be entertained till team is delivering it with time and material. But once
you reach at first approach level and changed your contract type to fixed then
do not entertain the CR.
Execution Instructions:
1.
When project is in time and material stage let
customer decide the task, priority and its timeline. Team can only give the
efforts for planned task.
2.
Co-ordinate with customer effectively to deliver
the expected result
3.
Plan the sprint and execute it. Initially let it
be 2-week sprint duration and later you can increase it as per the requirement
clarity comfort
4.
Deliver the planned work, demonstrate it to
customer and take approval on it from customer
Third Approach: Capital
cost and Incentives
This approach is little different compared to Fixed price
model. In this approach both customer and vendor sits together and decide one
cost for the project. Later if project gets completed on time without any
hurdles the incentive may be offered in the form of giving additional
engagements or projects with high rates. Additional cash can be one of option
for incentives.
Situation:
1.
When customer and vendor are new to each other
2.
Team have identified some risks but customer has
promised to clear those during development
3.
Sure about technical feasibility but confused
for some feature on its implementation
duration
Tailoring:
1.
“Individuals
and interactions over processes and tools”. Both part of the sentence are
important in this value
2.
“Working
software over comprehensive documentation”, here we need working software as
well as its documentation
3.
The third value “Customer collaboration over
contract negotiation” Customer collaboration as well as contract negotiation
may happen
4.
The fourth and final agile principle value is “Responding
to change over following a plan”. Small changes can be accepted. But for
massive changes both the parties need to sit together and need to revise the
cost
Execution Instructions:
1.
List the priority items and prepare the sprint
plan. The sprint duration should be smaller in the beginning
2.
Proactively use management technique to keep
customer informed on all front
3.
Be transparent with customer for all the
happenings in the project
4.
Deliver the project on time and raise ticket for
incentives
5.
Raise warnings and alerts if there is additional
work request, change request or any kind of risk in the project
