Skip to main content

Phased Development

A Phased Development contract is similar to how venture capitalists work with start-ups. It keeps stakeholders in the loop while delegating most decisions to the product team.

Phased development is essentially a longer-term perspective on Time and Materials with Variable Scope and Cost Ceiling, especially if each phase is kept relatively short, e.g. three months or so.

Desired Benefit

Enable decision-making within the project while maintaining control at the governance level over the costs.

Structure

Fund quarterly releases and approve additional funds after each successful release.

Scope Changes

Not explicitly defined by the model. Releases are in effect time-boxed. The knowledge that there will be another release next quarter makes it easier to accept postponing a feature to achieve the time box.

Risk

Customer’s risk is limited to one quarter’s worth of development costs.

Relationship

Cooperative. Both the customer and the supplier have an incentive that each release be successful so that additional funding will be approved.

Tips

Venture capitalists often work on this basis. A Release Train in SAFe could be handled this way. Phased Development represents a long-term view of Time and Materials with Variable Scope and Cost Ceiling. The budget is set and reviews on a quarterly basis. The Product Owner requests new budget from the governance level on a rolling basis, as the project goals are achieved.

I have worked quite happily under this model. We simply specified the Release goal, hourly rate and cost ceiling in the commercial contract. The customer provided the Product Owner. Everything else was determined in the sprint contracts.

This can be risky for the supplier, if the continuation doesn’t get approved how much notice or compensation do you get? See Section 7.9, Money for Nothing, Changes for Free for a scenario with a softer landing.



You can get the whole book now, or you can read it a chapter at a time as I publish it here under the label ten contracts. To download the e-book or pre-order the physical book visit https://saat-network.ch/ten

Comments

Popular posts from this blog

Sample Definition of Done

Why does Scrum have a Definition of Done? Simple, everyone involved in the project needs to know and understand what Done means. Furthermore, Done should be really done, as in, 'there is nothing stopping us from earning value with this function, except maybe the go-ahead from the Product Owner. Consider the alternative:
Project Manager: Is this function done?
Developer: Yes
Project Manager: So we can ship it?
Developer: Well, No. It needs to be tested, and I need to write some documentation, but the code works, really. I tested it... (pause) ...on my machine. What's wrong with this exchange? To the developer and to the project manager, "done" means something rather different. To the developer in this case, done means: "I don't have to work on this piece of code any more (unless the tester tells me something is wrong)." The project leader is looking for a statement that the code is ready to ship.

At its most basic level, a definition of Done creates a sh…

Scaling Scrum: SAFe, DAD, or LeSS?

Participants in last week's Scrum MasterClass wanted to evaluate approaches to scaling Scrum and Agile for their large enterprise. So I set out to review the available frameworks. Which one is best for your situation?

Recently a number of approaches have started gaining attention, including the Scaled Agile Framework ("SAFe") by Dean Leffingwell, Disciplined Agile Development (DAD), by Scott Ambler, and Large Scale Scrum (LeSS), by Craig Larman and Bas Vodde. (Follow the links for white papers or overviews of each approach).

How to compare these approaches? My starting point is Scrum in the team. Scrum has proven very effective at helping teams perform, even though it does not directly address the issues surrounding larger organizations and teams. An approach to scaling Scrum should not be inconsistent with Scrum itself.

Scrum implements a small number of principles and constraints: Inspect and Adapt. An interdisciplinary Team solves the problem. Deliver something of va…

Explaining Story Points to Management

During the February Scrum Breakfast in Zurich, the question arised, "How do I explain Story Points to Management?" A good question, and in all honesty, developers can be an even more critical audience than managers.

Traditional estimates attempt to answer the question, "how long will it take to develop X?" I could ask you a similar question, "How long does it take to get the nearest train station?

The answer, measured in time, depends on two things, the distance and the speed. Depending on whether I plan to go by car, by foot, by bicycle or (my personal favorite for short distances) trottinette, the answer can vary dramatically. So it is with software development. The productivity of a developer can vary dramatically, both as a function of innate ability and whether the task at hand plays to his strong points, so the time to produce a piece of software can vary dramatically. But the complexity of the problem doesn't depend on the person solving it, just …