Group items tagged

Venture-capital financing model This can be used with any of the above contract forms. In this model, the sponsor gives a round of financing for a certain amount of work, and the contracted company must produce results in order to get more funding. The sponsor can cut their losses at any time if they are not getting the results they need. They can presumably alter the terms of the contract after each work period. The result of a work period need not be working software; it could be a paper study, or a requirements document, or anything the sponsor selects. The venture-capital finance model works well with agile providers, since the agile provider is used to delivering useful, working software early and regularly. I find it an odd irony that the venture capital financiers running start-ups that I have encountered don’t take advantage of their own model to the extent agile teams do. The venture financiers let the evaluation markers occur too far apart in time. If they attached funding to monthly releases, that would oblige the start-up team to think through what it really can accomplish each month. The monthly progress would give the financiers a better sense of the start-up company’s real progress.

Venture-capital financing model This can be used with any of the above contract forms. In this model, the sponsor gives a round of financing for a certain amount of work, and the contracted company must produce results in order to get more funding. The sponsor can cut their losses at any time if they are not getting the results they need. They can presumably alter the terms of the contract after each work period. The result of a work period need not be working software; it could be a paper study, or a requirements document, or anything the sponsor selects. The venture-capital finance model works well with agile providers, since the agile provider is used to delivering useful, working software early and regularly. I find it an odd irony that the venture capital financiers running start-ups that I have encountered don’t take advantage of their own model to the extent agile teams do. The venture financiers let the evaluation markers occur too far apart in time. If they attached funding to monthly releases, that would oblige the start-up team to think through what it really can accomplish each month. The monthly progress would give the financiers a better sense of the start-up company’s real progress.

Bob Martin’s idea Bob Martin of Object Mentor posted an interesting variant to get around this problem: a base fee per story point, plus a lower-than-usual (close-to or below cost) fee per hour. This biases the contracted company’s to deliver early, but gives them some protection in case work proceeds slower than expected. Bob Martin described it this way:”[A]gree to pay a certain amount for each point completed, plus a certain amount for each hour worked. For example, let’s say you’ve got a project of 1000 points. Let’s also say that a team of four has established an estimated velocity of 50 points per week. This looks like about an 80 man-week job. At $100/hour this would be a $320,000 job. So lets reduce the hourly rate to $30/hour, and ask the customer for $224 per point. This sets up a very interesting dynamic. If the job really does take 80 man-weeks, then it will cost the same. If it takes 100 man-weeks then it will cost $344,000. If it takes 70 man-weeks it will cost $308,000. Notice that this is a small difference for a significant amount of time. Notice also that you, as developer feel strong motivation to be done early, since that increases your true hourly rate.” I have not seen that model in action myself, but several people have written in recommending it.

*Please note that I'm specifically talking about productivity. Velocity is a great tool for estimating and planning and I'm not trying to change that. It's just not a good measure of productivity.

rather than asking your business experts to measure business value after delivery (difficult!), have them estimate it beforehand. Every story (or feature--keep reading) gets an estimate before it's scheduled. At the end of each iteration, add up the value estimates for the stories you completed in that iteration. This is your "value velocity."

And rather than reflecting the hours programmers work, as cost velocity does, value velocity actually reflects productivity. Remember, productivity equals output/time. Value estimates are a much better indication of output than cost estimates are.

One of the developers had checked in some code that failed the regression tests. The application, on which the company had spent considerable time, money and effort, was now in an uncertain state. It wasn't behaving as expected. In the past, this type of bug usually wasn't discovered for months. Usually, it wasn't discovered until the System Integration Testing cycle got underway. For this project, that wasn't scheduled for another 6 months.

In the past, this bug would have lingered in the code for 6 months before anyone even realized it was a problem

. The light had gone off only 6 minutes after the code had been committed. Notice: not 6 months...but 6 minutes!

How to make a LOT more money using agile

More frequent releases

expectations must be set for releases to be smaller but still have significant marketable value.  It also means managing scope for smaller releases so the value can actually be delivered to meet the expectations.  If we make the assumption these two pre-requisites can be handled, then we can also assume faster releases are possible.  Yes, I know, releasing software is expensive, requires other groups, etc.  For now, let’s assume all of those costs are negligible compared to the potential results and see where we end up.

The Project Manager works with the Product Owner to insure that cost is always a consideration when evaluating the Product Backlog.

"Super Scrum Master"

Tracking costs, especially for production

Try to get the one person to move to where the rest of the team is.

Having one remote is a cost that must be borne by the full team. For the right person, it’s easily worth it. But sometimes, the person who is remote has not special skills, knowledge or experience to justify the added hassle.

continue to use the physical task board–it is simply too beneficial to the collocated team members to give it up in favor of a product backlog tool, especially if team members are already used to it and like it.

Institute an agile transition team, and have the agile PMO play a significant role on that team. If you are starting on the journey, establishing an agile transition team can be a critical factor in your success. The agile transition team plans and implements the strategy for the organization’s agile transition (using a backlog, iterations, planning meetings, retrospectives and, in general, responding to change) This group monitors and communicates results throughout the organization, and is responsible for removing organizational level impediments. The PMO representative can act as ScrumMaster for the agile transition team. Members should be leaders representing different departments and functions that are impacted by the agile transition. For example, having leaders from development, QA, product development and the PMO is an excellent practice.

Establish a “Meta Scrum” that is tasked with mapping projects and features to corporate strategy. As part of optimizing the whole, it is important for there to be a big picture view across products and features. In general, product managers are tasked with defining, prioritizing and communicating the vision and features for their products. When you have a program that encompasses multiple products with multiple product owners and project teams, keeping everything in line with the corporate vision can sometimes be overlooked.   Unlike the Scrum of Scrums--which is tactical, i.e. focused on execution--the Meta Scrum is focused on the strategic planning and decisions guiding the program or programs as a whole. Establishing a Meta Scrum with the PMO representative acting as ScrumMaster to plan and facilitate meetings (as well as reporting and tracking decisions and action items) can add significant value in having a program able to rapidly respond to change while staying true to the corporate strategy and objectives.

I like using story points to establish the velocity of individual teams. From a program point of view, however, story points are difficult to use across multiple teams. The nut there is that one team’s story point is not equivalent to another team’s story point. To crack that nut, I use agileEVM to “normalize” to standard project management metrics like the Cost Performance Index and the Schedule Performance Index, as well as the Estimate At Complete in integrated dollars. These metrics can be aggregated across teams to establish progress against the plan for the entire program.

We measure progress in business-valued terms such as time-to-value, cost/benefit ratio and customer satisfaction.

There is no "score" to this assessment.  It is administered anonymously with results reported in aggregate.  This is a diagnostic tool to help us all reflect on our processes and identify ways to improve.  It cannot measure "improvement" from a previous assessment, only relative importance of potential improvements to our current situation.  

inally, this is not a competition.  The results will be most useful in helping you reflect on your current circumstances and establish priorities within your teams on areas of potential growth.