Welcome!

.NET Authors: Lori MacVittie, Yeshim Deniz, Ivan Antsipau, Liz McMillan, Michael Bushong

Related Topics: .NET, Java, SOA & WOA, Web 2.0

.NET: Blog Feed Post

So, You Want to Outsource an Agile Project?

Any contract for agile project outsourcing also needs to answer these points

Irrespective of what the Agile Manifesto says (“Customer Collaboration over Contract Negotiation”) we do require a signed contract for ANY medium to large software outsourcing engagements – and that includes agile projects.

Why? Because when there is a commercial arrangement between two parties for delivery of any service where a significant amount of financial transaction is involved, there needs to be a clear agreement on:

  1. What is the service that is going to be delivered and what will be the charges for those services?
  2. What happens when things go wrong?
  3. Do's and Don’ts of how the interaction will happen

So, any contract for agile project outsourcing also needs to answer these points. But, how will an agile contract be different from a traditional software outsourcing contract?

This post is based on…
Major part of what follows comes from the whitepaper Agile Contract Premier by Tom Arbogast, Craig Larman, and Bas Vodde. I recommend that you read it.

I have also used some ideas from the following posts:

Let us see what these practitioners have recommended.

Is it possible to have Fixed-Price, Fixed-Scope (FPFS) agile contract?

Yes, it is possible but it should be avoided.

  • Requirement specification that is signed off is almost never what is actually needed
  • In an effort to deliver something within the constraints of price and scope, suppliers will often degrade the quality of their work – reduced code quality, do less testing etc.
  • Price include large risk contingency – this premium is usually hidden in the effort estimate

As a result, the customer may not get what they want and supplier may lose out because of changing requirement.

How can the supplier make such project work?

  • Use people with experience of the domain and the technology to estimate the effort
  • Clearly lay out the acceptance definition or the definition of “done”
  • Ensure that new requirements only displace existing requirements if they are of equal effort
  • Decide how additional requirement will be charged

FPFS contracts are common where there is low level of trust between both parties. This may be a starting point in the engagement and it the project is successful more flexible contracts can follow.

What are the options available for Variable-Price, Variable-Scope contracts?

Such contract normally starts with a Master Services Agreement (MSA) which is more like a rate card. The rate may be for people deployed, cost of each iteration, function point or story point delivered etc.

Since we are talking about variable-scope, there will not be any detailed definition of scope. However, there may be an overall cap to the total price of the contract.

Some form of an order may be released for executing the next iteration or next couple of iterations which will have a clearer definition of scope or backlog.

To cover the risk the contract may be terminated after completion of any iteration – agreed termination charges may have to be paid.

Can you have a completely transparent payment model?

Yes, if you follow Toyota. It is called the target cost contract. They follow this five step process:

  1. In collaboration between customer and supplier, identify, analyze, and estimate all possible project requirements.
  2. In collaboration, estimate the cost of change or scope increase during the project.
  3. From these two elements, establish the target cost.
  4. Calculate target profit, based on target cost (for example, 15% of target cost).
  5. Share all details and results with customer.

The idea is to have a trusting relationship where pain and gain can be shared by having a mechanism to adjust the actual cost based on the changing scope.

How do you protect against things going bad?

This is clearly the domain of the contract lawyers. They are supposed to ensure that contracts are drafted in such a way that suitable clauses are in place favoring their clients.

It is essential that non-lawyers involved in negotiating the contract understand the lawyers point of view.

However, one of the key premises of agile methodology is that the project risk is reduced through iterations and early delivery. So, it is strongly recommended that lawyers working on such contracts study and understand how agile method reduces risk.

This can help in significantly simplifying the contract.

Successful projects happen not because of the contract but because of many other things including collaboration, transparency, and trust. There are many natural roadblocks in the path of a successful project delivery – the contract should take care not to add any more roadblocks.

After all under normal circumstances everyone’s number one priority is to deliver a successful project. (There are situations where some people may want the project to fail.)

More Stories By Udayan Banerjee

Udayan Banerjee is CTO at NIIT Technologies Ltd, an IT industry veteran with more than 30 years' experience. He blogs at http://setandbma.wordpress.com.
The blog focuses on emerging technologies like cloud computing, mobile computing, social media aka web 2.0 etc. It also contains stuff about agile methodology and trends in architecture. It is a world view seen through the lens of a software service provider based out of Bangalore and serving clients across the world. The focus is mostly on...

  • Keep the hype out and project a realistic picture
  • Uncover trends not very apparent
  • Draw conclusion from real life experience
  • Point out fallacy & discrepancy when I see them
  • Talk about trends which I find interesting
Google

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@ThingsExpo Stories
Software AG helps organizations transform into Digital Enterprises, so they can differentiate from competitors and better engage customers, partners and employees. Using the Software AG Suite, companies can close the gap between business and IT to create digital systems of differentiation that drive front-line agility. We offer four on-ramps to the Digital Enterprise: alignment through collaborative process analysis; transformation through portfolio management; agility through process automation and integration; and visibility through intelligent business operations and big data.
There will be 50 billion Internet connected devices by 2020. Today, every manufacturer has a propriety protocol and an app. How do we securely integrate these "things" into our lives and businesses in a way that we can easily control and manage? Even better, how do we integrate these "things" so that they control and manage each other so our lives become more convenient or our businesses become more profitable and/or safe? We have heard that the best interface is no interface. In his session at Internet of @ThingsExpo, Chris Matthieu, Co-Founder & CTO at Octoblu, Inc., will discuss how these devices generate enough data to learn our behaviors and simplify/improve our lives. What if we could connect everything to everything? I'm not only talking about connecting things to things but also systems, cloud services, and people. Add in a little machine learning and artificial intelligence and now we have something interesting...
Last week, while in San Francisco, I used the Uber app and service four times. All four experiences were great, although one of the drivers stopped for 30 seconds and then left as I was walking up to the car. He must have realized I was a blogger. None the less, the next car was just a minute away and I suffered no pain. In this article, my colleague, Ved Sen, Global Head, Advisory Services Social, Mobile and Sensors at Cognizant shares his experiences and insights.
We are reaching the end of the beginning with WebRTC and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) irreversibly encoded. In his session at Internet of @ThingsExpo, Peter Dunkley, Technical Director at Acision, will look at how this identity problem can be solved and discuss ways to use existing web identities for real-time communication.
Can call centers hang up the phones for good? Intuitive Solutions did. WebRTC enabled this contact center provider to eliminate antiquated telephony and desktop phone infrastructure with a pure web-based solution, allowing them to expand beyond brick-and-mortar confines to a home-based agent model. It also ensured scalability and better service for customers, including MUY! Companies, one of the country's largest franchise restaurant companies with 232 Pizza Hut locations. This is one example of WebRTC adoption today, but the potential is limitless when powered by IoT. Attendees will learn real-world benefits of WebRTC and explore future possibilities, as WebRTC and IoT intersect to improve customer service.
From telemedicine to smart cars, digital homes and industrial monitoring, the explosive growth of IoT has created exciting new business opportunities for real time calls and messaging. In his session at Internet of @ThingsExpo, Ivelin Ivanov, CEO and Co-Founder of Telestax, will share some of the new revenue sources that IoT created for Restcomm – the open source telephony platform from Telestax. Ivelin Ivanov is a technology entrepreneur who founded Mobicents, an Open Source VoIP Platform, to help create, deploy, and manage applications integrating voice, video and data. He is the co-founder of TeleStax, an Open Source Cloud Communications company that helps the shift from legacy IN/SS7 telco networks to IP-based cloud comms. An early investor in multiple start-ups, he still finds time to code for his companies and contribute to open source projects.
The Internet of Things (IoT) promises to create new business models as significant as those that were inspired by the Internet and the smartphone 20 and 10 years ago. What business, social and practical implications will this phenomenon bring? That's the subject of "Monetizing the Internet of Things: Perspectives from the Front Lines," an e-book released today and available free of charge from Aria Systems, the leading innovator in recurring revenue management.
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges.
There’s Big Data, then there’s really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. In her session at 6th Big Data Expo®, Hannah Smalltree, Director at Treasure Data, to discuss how IoT, Big Data and deployments are processing massive data volumes from wearables, utilities and other machines.
All major researchers estimate there will be tens of billions devices – computers, smartphones, tablets, and sensors – connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be!
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at Internet of @ThingsExpo, Erik Lagerway, Co-founder of Hookflash, will walk through the shifting landscape of traditional telephone and voice services to the modern P2P RTC era of OTT cloud assisted services.
While great strides have been made relative to the video aspects of remote collaboration, audio technology has basically stagnated. Typically all audio is mixed to a single monaural stream and emanates from a single point, such as a speakerphone or a speaker associated with a video monitor. This leads to confusion and lack of understanding among participants especially regarding who is actually speaking. Spatial teleconferencing introduces the concept of acoustic spatial separation between conference participants in three dimensional space. This has been shown to significantly improve comprehension and conference efficiency.
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, will discuss single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example to explain some of these concepts including when to use different storage models.
SYS-CON Events announced today that Gridstore™, the leader in software-defined storage (SDS) purpose-built for Windows Servers and Hyper-V, will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Gridstore™ is the leader in software-defined storage purpose built for virtualization that is designed to accelerate applications in virtualized environments. Using its patented Server-Side Virtual Controller™ Technology (SVCT) to eliminate the I/O blender effect and accelerate applications Gridstore delivers vmOptimized™ Storage that self-optimizes to each application or VM across both virtual and physical environments. Leveraging a grid architecture, Gridstore delivers the first end-to-end storage QoS to ensure the most important App or VM performance is never compromised. The storage grid, that uses Gridstore’s performance optimized nodes or capacity optimized nodes, starts with as few a...
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace. These technological reforms have not only changed computers and smartphones, but are also changing the data processing model for all information devices. In particular, in the area known as M2M (Machine-To-Machine), there are great expectations that information with a new type of value can be produced using a variety of devices and sensors saving/sharing data via the network and through large-scale cloud-type data processing. This consortium believes that attaching a huge number of devic...
Innodisk is a service-driven provider of industrial embedded flash and DRAM storage products and technologies, with a focus on the enterprise, industrial, aerospace, and defense industries. Innodisk is dedicated to serving their customers and business partners. Quality is vitally important when it comes to industrial embedded flash and DRAM storage products. That’s why Innodisk manufactures all of their products in their own purpose-built memory production facility. In fact, they designed and built their production center to maximize manufacturing efficiency and guarantee the highest quality of our products.
All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. Over the summer Gartner released its much anticipated annual Hype Cycle report and the big news is that Internet of Things has now replaced Big Data as the most hyped technology. Indeed, we're hearing more and more about this fascinating new technological paradigm. Every other IT news item seems to be about IoT and its implications on the future of digital business.
Can call centers hang up the phones for good? Intuitive Solutions did. WebRTC enabled this contact center provider to eliminate antiquated telephony and desktop phone infrastructure with a pure web-based solution, allowing them to expand beyond brick-and-mortar confines to a home-based agent model. Download Slide Deck: ▸ Here
BSQUARE is a global leader of embedded software solutions. We enable smart connected systems at the device level and beyond that millions use every day and provide actionable data solutions for the growing Internet of Things (IoT) market. We empower our world-class customers with our products, services and solutions to achieve innovation and success. For more information, visit www.bsquare.com.
With the iCloud scandal seemingly in its past, Apple announced new iPhones, updates to iPad and MacBook as well as news on OSX Yosemite. Although consumers will have to wait to get their hands on some of that new stuff, what they can get is the latest release of iOS 8 that Apple made available for most in-market iPhones and iPads. Originally announced at WWDC (Apple’s annual developers conference) in June, iOS 8 seems to spearhead Apple’s newfound focus upon greater integration of their products into everyday tasks, cross-platform mobility and self-monitoring. Before you update your device, here is a look at some of the new features and things you may want to consider from a mobile security perspective.