Андрій Просов "Fixed Price Agile Projects: Challenges for Project Manager" Kharkiv PMDay 2017 autumn
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The document discusses the challenges of managing fixed price agile projects, emphasizing the misalignment between client expectations and team realities. It highlights risks involved under fixed price contracts, suggests strategies for successful project management, and points out the importance of clear communication and scope definition. Ultimately, it concludes that while fixed price agile projects are fraught with challenges, they can be successfully executed with proper management and adaptability.
Андрій Просов "Fixed Price Agile Projects: Challenges for Project Manager" Kharkiv PMDay 2017 autumn
- 1. Fixed Price Agile Projects: Challenges for a Project Manager Andrey Prosov Kharkiv PM Day, Sep-23 2017
- 2. About me • Senior Project Manager in Insoft Global • 10+ experience in R&D and Project Management • PhD • Certified Scrum Master • ISTQB Certification https://www.linkedin.com/in/andrey-prosov-b458b743/ prosov@gmail.com
- 3. Agenda • Fixed price vs Agile mindset • Reasons for Fixed Price Agile Projects • Client expectations vs Team feelings • Challenges for a Project Manager • How to address a Fixed Price Agile Project? • Conclusions
- 5. Fixed Price Contract • The PMBOK® Guide, Fifth Edition (PMI, 2013), defines Fixed Price Contract as “a type of fixed price contract where the buyer pays the seller a set amount (as defined by the contract), regardless of the seller's costs.” • Expectations that in addition to the fixed price, the project will also: •complete a fixed scope, and •do so within a fixed schedule.
- 6. Agile Manifesto processes and tools Individuals and interactions over following a plan Responding to change over www.agilemanifesto.org comprehensive documentation Working software over contract negotiation Customer collaboration over
- 8. Fixed Price Agile Projects Mindset • The good -- Most Agile projects are fixed price per iteration, by nature. You have a fixed team (Scrum team) to deliver some feature (sprint backlog) within a fixed time (sprint). • The bad -- Usually when people say "fixed price," they mean fixing all parameters, i.e., price, time, and scope. This can create huge confusion and conflicts later unless specified. • The ugly -- The contract is signed with fixed price, scope, and time, with Agile in mind. The team is asked to deliver what is committed to the customer as per the contract. The team overworks and delivers the product, but by compromising on quality.
- 10. When you may face Fixed Price Agile Project • New client – a low level of trust • Limited budget of client • Tender with State owned company • Client wants Agile and wants to reduce his risks • Fixed Price Agile Is a Sales Technique • IT company just needs this contract “Agile software development fits nicely with fixed price contracts” Jurgen Appelo
- 11. Changing requirements is a fact of life
- 12. Key wrong assumptions in fixing the scope • The more detail we include in the scope definition up front, the better we understand each other • Well-defined scope will prevent changes • A fixed scope is needed to better estimate price and time “Assumptions are made and most assumptions are wrong.” Albert Einstein
- 13. Client expectations •Fixed-price contracts are the highest risk to the supplier and the lowest risk to the client •But if a project fails, will a customer happy?
- 14. Team feelings OR
- 15. How Project Manager sees Fixed Price Agile Project
- 16. Challenges Of Project Management Under Fixed price Agile Contracts • Correct estimation of fixed-price Agile projects • Misalignment between classical functional requirements and User Stories • Difficulty in handling change requests typical for agile projects with fixed budget • Differences between document-oriented and communication- oriented practices • Complexity of embedding specific agile projects into traditional (waterfall) customer environments • Tracking implemented scope and spent budget
- 17. Usual Challenges Of Project Management • People are not perfect • Communication causes gaps and conflicts • Processes are not perfect • Processes not implemented properly
- 18. Unexpected issues • Client or his team members may skip the (daily) meetings • Product Owner is busy with other projects • A client may not provide approval for written specifications for a long time • Change of Architect in the middle of a project
- 19. How to address a Fixed Price Agile Project?
- 20. How to address a Fixed Price Agile Project? • Define your scope • Educate your project team and client • Develop a work breakdown structure (WBS) • Use a project schedule • Estimate with an actual project team • Manage to scope • Manage change requests • Hold regular internal project reviews • Obtain acceptance
- 21. Define Project Scope • Work with your client to develop the project scope, objectives, and deliverables • Ensure that your scope of work, basis of estimate, or equivalent contract document defines clearly • Do not to leave a subject to interpretation • Gather User stories • Definition of Done • The scope of testing and acceptance criteria • The pursuit of perfection is expensive; don’t let your fixed price lead to enhanced definitions of quality, “since it’s free.”
- 22. Educate your project team and client • Do not be arrogant if your Client has less knowledge about Agile/Scrum • Do not to teach a Client • Make a demo how your team works in Fixed Price Agile project conditions • Project Charter • Educate your Product Owner • Time to review/approve deliverables • Change Management Process
- 23. Develop a work breakdown structure (WBS) • Be focused on the work required to complete the deliverables • Be honest with a Client if something goes wrong as per WBS • See as the individual components as the totality of the work • Represent an increasingly detailed definition of the project work • Planned in advance next activities (access to Infrastructure, approved design documents, etc)
- 24. Use a project schedule • Estimate the durations for each of the activities identified in the WBS and sequencing the activities in a logical order • The level of detail is driven by the size, complexity, and risk of the project • The level of details should be balanced
- 25. Estimate With Actual Project Team •Experts and Real team •Estimations and Commitments
- 26. Manage to scope • Be sure that there are only necessary activities in your plan • Work is performed within the scope of work per the contract requirements • Change order approved by the client in a contract modification
- 27. Hold regular internal project reviews – Manage Communications • Regular reviews • Dayi sync up meetings • Meeting minutes MUST have been created and published • Involve Client into Retrospectives and ask him for feedback
- 28. Change Request or not a Change Request
- 29. Manage Change Requests • The initial requirements do not contain sufficient detail or clarity • Requirements change due to new information about the needs of the project (better ideas occur as work progresses) • “Change requests” vs “Exchange requests” • Do not make medium and big changes without charging a client • Make simple change without charging a client • It’s better to expand terms than increase a team • Any change in scope has to be documented in a change order, and funded as provided for in the overall contract.
- 30. Obtain Acceptance • Acceptance of your deliverables • Clearly define the criteria if the client has not • The scope of testing must be undoubtedly defined and acceptance criteria specified • Be very clear on your responsibilities after delivery.
- 31. Additional Lessons • Project Charter • RACI Matrix • Developers may work directly with Client functional personnel on a daily basis • Face-to-Face communication (working on Client’s site, trips) • Slip from Scrum approach to Kanban (a sense of sprints (rhyme) is lost)
- 32. Conclusions • Fixed price Agile projects exist • When the price is fixed, change management is your only tool for staying out of the red. • Risk or and Opportunity • Agile projects for a fixed price? Yes, you can!
- 33. Sources • https://project-management-knowledge.com/definitions/f/fixed-price-contract/ • Fewell, J. (2011). Fixed price agile projects: making the impossible possible. Paper presented at PMI® Global Congress 2011—North America, Dallas, TX. Newtown Square, PA: Project Management Institute. • Jurgen Appelo https://dzone.com/articles/fixed-price-contracts-agile-pr • Martin Fowler https://martinfowler.com/bliki/FixedPrice.html • https://www.pmi.org/learning/library/firm-fixed-price-agile-projects-6231 • https://www.pmi.org/learning/library/challenges-fixed-price-contracts-9640 • https://www.cleveroad.com/blog/time-and-material-vs-fixed-price--hot-discussion-of- the-best-pricing-model • https://www.infoq.com/articles/project-manager-role • http://blog.trifork.com/2013/08/22/lessons-learned-how-to-do-scrum-in-a-fixed-price- project/