Agile contracts and collaboration

One of the most common questions I encounter is how buying and selling software development can be made in a different, more agile, way. At least in Sweden, the purchasing of a software development effort is usually really waterfall-ish, requiring a lot of specification work up front, many times ending up in fixed-price, fixed content contracts with severe penalties for missing a deadline. 

Agile contracts have been on the horizon for quite some time, but few cases have been presented so far. During Scrum Gathering 2008 in Stockholm, I had the opportunity to host an Open Spaces session with participants from various countries. These are my (brief) notes from this session, somewhat depicting the current state of agile contracts.

Session notes Agile Contracts & Collaboration

Trust is a central issue. If trust between the supplier and purchaser can be achieved and upheld through means of an agile contract, a lot of headway can be made. To ensure trust, the risk must be shared and the supplier can no longer keep the software hostage until the end of the contract, but rather be prepared to give up a complete DONE release every sprint.

It has a lot to do with managing expectations. To be able to share the risk, we must have good, agile ways of dealing with risk up front. There were discussions and a few examples on how to closely work with the customer initially to set up the road map (“sprint map?” :-) ) and build trust. Some charge for this collaboration, others don’t.

To move this forward, we have to find and present success stories where buyer and supplier both come forward and talk about a successful agile collaboration. It was a common thought that many organizations are waiting for “someone else” to come forward and share a success story before risking the leap oneself.

In such stories, the improved customer value and margin could be natural comparison metrics, as well as the aggregate business value. Metrics and comparisons are vital.

The legal issues became one of the big topics. A formal standard contract for agile collaboration would be a big step forward. How can Scrum Alliance work towards this goal, as well as paving the way through political/industry lobbying? A Certified Scrum Purchasing Manager was proposed, tongue in cheek, but also with a serious undertone. We need to find and infiltrate The Secret School of Purchasing Managers. Anyone had any luck so far? : -) At least, everyone could agree on the need for top management to understand and embrace these issues – which also would have impact on the economics and how we define project/product success.