Many people seem to realize that the standard (waterfall way) of software development doesn't deliver the requested results. Agile is the way to go. But how to make sure that you will get what you want? What contract to prepare? Seeing the lack of ready templates, Agile contracting still seem to be a real challenge.

2. Picture source: Flickr.com

4. • Clients believe user, functional and system
requirements are fully known and
documented in a way that enables
efficient development
• And that’s why many features developed
are never used
• Projects finish out of budget
• And mostly too late

5. Which implies “waterfall” development
assuming:
1. You have completed a thorough,
efficient design phase, and
2. Requirements won’t change during
the development process

7. • and over processes
and tools
• over comprehensive
documentation
• over
• over following a plan
Source: Agilemanifesto.org

8. Scope Budget
Quality

10. • Time & Material
– Protects the supplier (no risk)
– No protection for the customer (full risk)
• Capped Time & Material
– Fixed agreed budget
– Share savings
– Often variable scope projects
– Supplier expenses paid upfront
– Customer’s risk limited
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11. • Incremental delivery
– Customer can stop project at any “delivery
moment”, “Money for nothing”
– 20% (or more) of remaining budget for provider
• Cost targeted
– Both parties agree on a realistic final price,
although this is rather difficult
– Savings will be shared
– Over budget both parties pay a penalty
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12. The proof of the pudding

13. Client
Call Center
Health facility
Sell insurance
Contracting
Appointment
Visit
Invoicing

14. • Workshops with end-users
• High level estimation for 10 releases
• Agreed fixed budget with cap, cost targeted
• Every release new contract
• Iterations upfront agreed
• Acceptation criteria “known”upfront
• Satisfaction evaluation (with payment
impact) per iteration/release
• Changes as appendix
• New work, additional budget

15. Picture source: stock.xchng

16. • Framework agreement
• Agreement per release
• Fixed budget (per release as well)
• Fixed date
• Flexible approach/scope
Planning Realization Evaluation
iteration
2 week iterations
Agreement
about the
planning
Demo showing
the iteration
result
SKOK provided a
mark for the
iteration
Release
definition
(contract)
Release
Acceptation
protocol
Iteration
agreement

19. • Software Development: How the Traditional Contract Model Increases
the Risk of Failure, Susan Atkinson and Gabrielle Benefield, 28 May
2013, InfoQ, http://www.infoq.com/articles/contract-model-failure
• An overview of Agile Contracts, Kane Mar, http://scrumology.com/an-
overview-of-agile-contracts/
• Why Traditional “Fixed Bid” Software Projects Usually Fail, Paul
Dittmann, 15 December 2009,
http://pathfindersoftware.com/2009/12/fixed-bid-projects-fail/
• Money for nothing and change for free,
http://jeffsutherland.com/Agile2008MoneyforNothing.pdf
• Money for nothing, https://sites.google.com/a/scrumplop.org/published-
patterns/value-stream-pattern-language/product-backlog/money-for-
nothing
• Change for free, https://sites.google.com/a/scrumplop.org/published-
patterns/value-stream-pattern-language/product-backlog/change-for-
free
• Flexible contract template, http://flexiblecontracts.com/
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20. Contact details:
@ peter.horsten@goyello.com
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 http://blog.goyello.com
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