Agile acquisition and fixed price

I have been quite busy lately and not been very active with this blog. However, discussion about agile acquisition has become more acute because there are few failed purchases in public discussion. I mean AKE and TEO, who’s purchasing procedures have been questioned by Valtiontalouden tarkastusvirasto. See more (in Finnish)

General public and politicians typically react to problems by requiring more front-end design and rigor to the procedures. This makes the situation worse, because it increases unnecessary costs and bureaucracy.

At first we need to understand that hiring a designer is different than buying something that can be accurately defined before the purchase. When you buy design work minimizing the cost is not the only and not even the most important consideration. There are huge quality differences in the various solutions offered by the vendors. Comparing them is not straightforward and easy. One of them could propose a COTS solution, another something based on SOA and 3rd one a fully tailored solution. Obviously, it is not possible to define exact requirements without any idea of the implementation.

Actually defining the exact requirements is exactly what the development project is supposed to do. If I knew exactly what I want I would not need the designer. The designer is hired for contributing while we work together to create the forthcoming software. Because software development is a common endeavor with the buyer and the vendor, asking a fixed price is somehow skewed. I, as a buyer would probably get the maximum price with all of the risks included in the prise. If the competitive pressure keeps the cost too low, my vendor can very easily compromise the quality.

It is also useful for me that my organization has an interest to lower the costs by removing unnecessary features. Prioritization is rarely happening in fixed price projects. But I still have a budget, idea of return of investment. To keep the costs in bay I need to collaborate with the vendor to spend the money wisely. Monthly deliveries of done increments of functionality are a safe bet. If the vendor can not deliver, I have to stop the project (and have that allowed in the contract) and try something else.

Agile acquisition

I have added a comment to Agile Finland’s forum: Neuvottelumenettely needs promotion

The Finnish law of public acquisition does not require that we do competitive bidding using comprehensive requirement specification. Public buyers does not, however, know the allowed negotiation procedure (Neuvontamenettely) that is more suitable for purchasing software development services. So, agile community should do promotion to improve the situation.

Read more details in the discussion chain. I have corrected the word neuvontamenettely to neuvottelumenettely.

Agile adoption strategy

In information security area, it is common to talk about strategy. I have used the following paper that condenses what is important: Information security strategy. The case of agile adoption is similar though the details are different. In both cases we need some funding to make deep changes in the way we work every day. To even start we need decisions about who does and what and why just that.

Large bureaucratic organizations love their process guides and still more they want to spend in developing tools for the forthcoming needs. It is not a coincidence that we have so many agile tool vendors. In the following I adapt the previous paper to agile adoption.

A strategic approach that works.

1. Implement baseline practices.

Typical organizations have a dysfunctional practices or a few of them. Starting with something that gives immediate and visual results is something that is needed to justify spending. Starting with Scrum-type retrospectives is a good choice because it gives us subjective measures of how successful we are when we continue. I like to call retrospectives Japanese quality circles to emphasize that agile adoption is a quality improvement initiative

2. Analyze your value stream

Now it is time to start what the consultants and coaches are so eager to sell you. Analysis will give you ideas of improvement. At least you must check the impediments of your agile adoption. If you don’t have support of your customer or your upper management, it might be very difficult to succeed. I like Admed Sidky’s agile adoption framework which gives you the order in which you should implement the agile practices.

3. Prepare business case for the improvement(s)

Now you must justify the adoption of the individual practices. Note, of course that they depend on each other. Creating a business case for each adoption step also gives you a view in which order your organization should go ahead. Of course you must consider risks as well.

4. Initiate your improvement program

Now you are on your way with real money and as always with people and organizations you can’t predict what happens. So you must use empirical process control to steer your way. You need to establish the part of organization that facilitates transparency, inspections and adaptations. Becoming public is a necessary part of this program. People, all of them, are an essential part of this. They make the adoption successful, not the things ivory towers can deliver.

5. Manage and deliver the program

If your agile adoption goes as normal, more and more of your problems will surface. Some of them can be handled by the teams, but some others need corporate level development projects. Of course, your program has multiple deliveries.

6 Review progress

In continuous improvement initiatives like this you must have your Deming cycle installed so that you can really facilitate your way to success.

This is it this time – a draft that can be extended. Comments are allowed in this blog. Because I do not visit very often, it may take time before I publish them.

Agile and traditional requirements in Systeemityölehti

Our article about agile and traditional requirements is published in the latest printed Systeemityölehti 2/2009. Its content can be partially found in Tieturis discussion forum.. In Finnish, sorry 🙂

Then something that I did or did not say in this discussion. The word “requirement” is harmful because business decisions about content and technical decisions about its implementation depend on each other. So, the business decisions can’t be done in a vacuum before any technical issues. This means that in a software engineering project there is no phases of requirement development, design and so on. From lean we find that we should postpone decisions to last possible moment, because we have then more information and we can assume that we make better decisions with better information. We should even study carefully multiple options before we commit to any of them. And that is not waste.

It is also important that we use scientific method in our decision making. For example we test the architectural choices before we continue.

The role of specifications is also different. We start with minimal specifications and use face-to-face communications to make sure that that the parties of the development understand each other. Specifications are not the maintenance documents of the forthcoming software because they change quite much during the development.

A month gone

I started this blog more than one month ago. I have written almost nothing about lean and agile software development. I mean here, because I do that almost every day at work.. The main reason for starting a new domain was to get rid of spam. It means that I change my email-addresses. It was a surprise that I take part in so many mailing lists. Most of my email was actually not spam but mails that I hope to have time to read. Updating an email-address in Software Engineering World, ECOOP and so on was quite easy. Then I have bought a book or something 10 years ago and they still hope that I return. Finding all of them in my gigabyte of email might not be feasible. I don’t even try because I can find them again if needed. The same applies to registrations of products that I have bought. My one-time registrations are collecting spam to free anonymous mailboxes. No problems.I suppose that this all is done after summer.

Agile or Death in Tampere

I had a talk with the title “agile or death”  in Tampere yesterday. We arranged that with Pitky.The idea for the title came from the car industry where the Americans have almost lost the came. Hummer survives still in Baghdad (news in Aamulehti), but its really Prius that leads the car industry. So, I wondered if the bureaucratic ICT companies can survive without becoming more lean and more agile.We had a good discussion, which is quite common in these kinds of happenings. One hint from the audience is worth of repeating. If you have 2 multinational sites, having a proxy person in the other site helps you a lot. For example,  you have sites in Finland and India. Having a guy from India in Finland makes the communication to India much better. Knowing the people in the other site and speaking the same language is really that important.

Pentti

Anti-spam and lean software

The idea of starting this kind of a blog is several years old. I have several home pages in ISP domains. My old email-addresses have become known to spammers. As an example I can tell that I have a very cryptic email-address that was put on my default homepage. It has got 5000 spam messages during the last 4 years. I know that because I do not use that address at all. So, all messages are spam. Now, I have my own domain and I will not publish my email-address in any machine-readable format. I can also delete and create email-addresses if the spam becomes a problem. So rule for avoiding spam: never publish your email-address in web. The invented the name LeanDeveloper quite lately to express that this is a personal homepage but it has has something to do with the business I do. You can find more official me from www.tieturi.fi/agile. Lean sofware development is something that I have always believed even though I did not know the name. On the other hand I have never believed that huge upfront investments on bureaucracy will eventually get paid.

Pentti Virtanen

Ph.D. , Software Engineering Specialist