Using Agile Approach with
Fixed Budget Projects
April 15, 2009
www.synerzip.com
The Challenge
Business Benefit
of Agile
Approach
Confidential
Mgmt Need For
Fixed/Known $
Budget
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Our Experience
Synerzip Project
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Confidential
Neofirma
Gimmal Workshare
Gimmal PRM
Broadlane
FD2S
Maximus NY
Maximus Indiana
Fellowship Technologies
FedEx Kinkos CRDB
Datacert Oracle Migration
SevaYatra
Award Solutions
Arc One
Fundraiser
CAPS
• 15 Client projects delivered in
Fixed-budget Agile
• Numerous discussions with
Agile practitioners
• Research into published work
of industry experts
www.synerzip.com
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Synerzip in a Nut-shell
1. Software development partner for small/mid-sized
technology companies
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Focus: small/mid-sized technology companies
Deep experience in product development, testing, & deployment
Handles full software development life cycle
Technology and industry domain agnostic
2. Actually reduces risk of development/delivery
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Experienced software management team
Brings in appropriate level of engineering discipline
Practices Agile development – responsive, yet disciplined
3. Reduces cost – dual-shore team, 50% cost advantage
4. Offers long term flexibility – allows (facilitates) taking
offshore team captive
Confidential
www.synerzip.com
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Our Clients - Examples
Confidential
www.synerzip.com
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Discussion Topics For Today
• Highlight characteristics of projects that are good
candidates for fixed-budget Agile delivery
• Share empirical data from over a dozen fixedbudget Agile projects
• Discuss the common DOs and DONTs
• Recommend alternative approaches for effectively
using Agile in fixed budget situations
Confidential
www.synerzip.com
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Key Characteristics
1. How baked are the requirements
2. Level of trust between the dev team and
the product owner
3. Timing of (fixed) budget estimate
commitment
4. Maturity and caliber of team
Confidential
www.synerzip.com
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1. Requirements Baked?
• Is the vision and the idea that drives the product evolving from hazy to
well defined ?
• Is the scope of the market that the product is trying to address
becoming more and more accurately defined ?
• Is the revenue model thought through as an integral part of the idea ?
• Have any real end users started using the product? Is it a startup
building out a product idea from scratch or an extension to an existing
product?
• Is it an existing technology being applied to a new domain or a new
technology being applied to an existing domain?
• Is it a case of a simple re-write where you are porting an existing
product to a new database or a different operating system?
New/Innovative
Confidential
Known/”ReWrite”
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2. Level of Mutual Trust
• Mutual trust is a two-way street
• Client/product owner apprehensive about
– Receiving good quality software
– Not getting “ripped-off” (willing to pay only fair/competitive market
price)
– Don’t want dev team spinning wheels with “$ meter running”
• Vendor/dev team apprehensive about
– Continued client commitment and involvement
– Likelihood of collecting the payment and not being unfairly
penalized for over-runs
• Are the two sides seeing each other as competing or collaborating? If
there are developers on both sides are the experience levels
matching? Do they have professional respect for each other?
No Trust
Confidential
Complete Trust
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3. Timing of the estimate
• Early estimates are inaccurate because
– Customer has not yet thought through the requirements
– Developers have not yet thought through the design.
• Estimates after “iteration zero” are more accurate.
• Estimates go on improving as iterations progress.
Hence do re-plan and re estimate
Upfront
Confidential
After iteration 0 or 1
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Do Re-Estimate and Re-plan
Confidential
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Fixed Bid with waterfall vs DSDM
Fixed bid with Agile Model
Fixed bid with Waterfall Model
OverestimateCustomer’s loss
OverestimateCustomer’s loss
Requirements
Requirements
tim
Es
e
at
Improved
Accuracy and
lower risk due to
agile
ti
Es
m
e
at
Converging requirements
Converging requirements
Estimation after
iteration zero
Estimation before
project kick off
Time
UnderestimateDeveloper’s loss
ate
Diverging requirements
ate
tim
Es
Improved
Accuracy and
lower risk due to
agile
Estimation after
iteration zero
Time
Confidential
UnderestimateDeveloper’s loss
Diverging requirements
m
Esti
Time
Requirements
Requirements
Estimation before
project kick off
Iteration Zero
Iteration Zero
Time
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4. Maturity & Caliber of Team
• Domain knowledge- is the customer and
established player in the domain? Does the
development team have domain experience?
• Technical Expertise – Is the customer aware of
technical challenges? Does the development team
have the technical expertise to address the
technical challenges?
• Experience level – Are the developers and the
product managers well experienced?
Inexperienced/
Junior
Confidential
Highly seasoned
www.synerzip.com
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Discussion Topics For Today
• Highlight characteristics of projects that are good
candidates for fixed-budget Agile delivery
• Share empirical data from over a dozen fixedbudget Agile projects
• Discuss the common DOs and DONTs
• Recommend alternative approaches for effectively
using Agile in fixed budget situations
Confidential
www.synerzip.com
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Fixed Budget Projects at Synerzip
Key Characteristics
Synerzip Project
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Baked
Mutual Trust
Requiremts? Level
Timing of
Estimate
Team Maturity
& Caliber
Project
Successful*?
Documentum add-on product
Vendor portal for hospitals
Oil & gas well monitoring tool
Sharepoint add-on product
Kiosk display using Flash
NY State health care svc app
IN State health care svc app
Reporting module for SaaS
Retail service center mgmt app
Database porting MS to Oracle
Voluntourism platform
Cell tower data analyses app
BI/reporting for comm distributor
Charity campaign mgmt app
Common college app platform
*Project considered successful, if both the client and the vendor (Synerzip) are happy with the results
Confidential
www.synerzip.com
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When Fixed Budget Agile Works?
Confidential
www.synerzip.com
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Discussion Topics For Today
• Highlight characteristics of projects that are good
candidates for fixed-budget Agile delivery
• Share empirical data from over a dozen fixedbudget Agile projects
• Discuss the common DOs and DONTs
• Recommend alternative approaches for effectively
using Agile in fixed budget situations
Confidential
www.synerzip.com
17
Common DOs
• Wait for at least one iteration before you submit the
bid
• Keep re prioritizing and re-estimating after each
iteration
• Listen to the end users’ pain points
• Question the product-market definition and the
revenue model if its not clear to you.
• Add a time buffer, requirements buffer and/or price
buffer
• Above all, stick with sound design and coding
practices. Move some stories out but don’t reduce
the story points by compromising quality
Confidential
www.synerzip.com
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Common DONTs
• Don’t go for a fixed budget if there is lack of
maturity in terms of technical or domain knowledge.
• Don’t commit to a price until you have at least one
iteration completed.
• Don’t work in a fixed price for a startup who are still
unclear about their product/market or business
model.
• Don’t sign up if a project has no flexibility on price,
requirements, time or resources
• Above all, don’t compromise on quality of software
delivered or coding standards to fit within the
budget
Confidential
www.synerzip.com
19
Discussion Topics For Today
• Highlight characteristics of projects that are good
candidates for fixed-budget Agile delivery
• Share empirical data from over a dozen fixedbudget Agile projects
• Discuss the common DOs and DONTs
• Recommend alternative approaches for effectively
using Agile in fixed budget situations
Confidential
www.synerzip.com
20
Alternative approaches
Confidential
www.synerzip.com
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4
Story Points Based Agile
Confidential
www.synerzip.com
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Approaches Used
Key Characteristics
Synerzip
Project
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Baked
Mutual Trust
Requiremts? Level
Timing of
Estimate
Team Maturity
& Caliber
Project
Successful*? Approach Used
2. Agile/DSDM
1. RUP
2. Agile/DSDM
2. Agile/DSDM
1. RUP
3. Incremental Agile
3. Incremental Agile
2. Agile/DSDM
1. RUP
1. RUP
4. Story Point Based Agile
1. RUP
2. Agile/DSDM
2. Agile/DSDM
1. RUP
Documentum add-on product
Vendor portal for hospitals
Oil & gas well monitoring tool
Sharepoint add-on product
Kiosk display using Flash
NY State health care svc app
IN State health care svc app
Reporting module for SaaS
Retail service center mgmt app
Database porting MS to Oracle
Voluntourism platform
Cell tower data analyses app
BI/reporting for comm distributor
Charity campaign mgmt app
Common college app platform
*Project considered successful, if both the client and the vendor (Synerzip) are happy with the results
Confidential
www.synerzip.com
23
Recommended Approaches
Key Characteristics
Baked
Mutual Trust
Requiremts? Level
Timing of
Estimate
Team Maturity
& Caliber
Recommended
Approach
1. RUP
2. Agile/DSDM
3. Incremental Agile
4. Story Point Based Agile
Confidential
www.synerzip.com
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Questions?
Agile Software Product Development Partner
www.synerzip.com
Hemant Elhence, hemant@synerzip.com
469.322.0349
Call us for a free consultation
Confidential
www.synerzip.com
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