A Minute of Our Time or What We Need to Unlearn About Software Contracting
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Transcript of A Minute of Our Time or What We Need to Unlearn About Software Contracting
A Minute of Our Timeor
What we need to unlearn about software contracting
Antti Kirjavainen (@anttiki)
Photo by ToniVC, CC-lisensed (non-commercial, sharealike, attribution)
BSOD by Martin Deutsch
SOFTWARE CONTRACTINGMajor contributor to this is the way we do
FAIL #1
FAIL #2
FAIL #2
FAIL #3
THE DYSFUNCTIONAL DYNAMICS
Needs
Contractor Customer
Risk Mitigation
Contractor• Doing work that customer
does not want to pay for• Employing people who do not
produce income
Customer• Get fair contribution in
exchange of payment
The Man-Hour
• De-facto industry standard• Smallest unit of work • Value can be evaluated• Billable or not billable
Contractor
billable man-hours
ratio of billable and unbillable man-hours on an individual basis
unbillable man-hours
Customer
definition of valuable (=billable) man-hours
billed man-hours
price of man-hours
Alert
Actual Dynamics
billable man-hours definition of valuable (=billable) man-hours
ratio of billable and unbillable man-hours on an individual basis
unbillable man-hours
billed man-hoursprice of man-hour
Actual Dynamics
billable man-hours
definition of valuable (=billable) man-hours
Do only work everyone agrees onexperiments
analysis paralysis
missed opportunities
motivation
Handcuffs by Mark Zwolanek
Actual Dynamics
billable man-hours
billed man-hours
Competition, conflict
motivation trust
Actual Dynamics
price of man-hour
Let’s compete with unit
price!
quality of work
work units (=people) are
the same favor cheaper
labor
Actual Dynamics
unbillable man-hours
opportunities to improve
Ability to attract and satisfy customers
Possibility to correct failure
situations
growing competences
developing business model(s)
Actual Dynamics
billable man-hours definition of valuable (=billable) man-hours
ratio of billable and unbillable man-hours on an individual basis
unbillable man-hours
billed man-hoursprice of man-hour
Valuable contributions to the customer?
Impacts of focusing on billable man-hours
• De-motivation of people• Losing trust• Losing competitiveness• Losing focus on
producing valuable contributions to the customer
• Missed opportunities• Losing trust• Getting low quality work• Losing focus on
getting valuable contributions in exchange for pay
WAYS TO MAKE IT BETTER
Option 1. #NoContracting ?!
Option 2. First Build Trust
1. Build trust relationship with the customer2. Start contracting for the customer3. ???4. Profit
Option 2. First Build Trust
1. Build trust relationship with the customer2. Start contracting for the customer3. ???4. Profit
How to be (or appear to be?!) trustworthy
before working together?
Option 3. What is the smallest potentially valuable unit of
work?
Actual Dynamics
billable man-hours
definition of valuable (=billable) man-hours
Do only work everyone agrees onexperiments
analysis paralysis
missed opportunities
motivation
Handcuffs by Mark Zwolanek
Option 3. TeamSmallest Value-Producing Unit
Option 3. TeamAnd smallest potentially valuable units of
work Outcome Time
Option 3. Smallest potentially valuable units of work
Outcome Time
Sprint
Outcome Time
Sprint
Potentially shippable product
increment
Option 3. Smallest potentially valuable units of work
Option 3. Smallest potentially valuable units of work
Outcome Time
SprintMinimal Marketable
Feature (MMF)
Potentially shippable product
increment
Handcuffs by Mark Zwolanek
Option 4. What should we offer to the customer?
Actual Dynamics
price of man-hour
Let’s compete with unit
price!
quality of work
work units (=people) are
the same favor cheaper
labor
Option 4. How to focus on valuable contributions for
customers?
What is your unique value proposition?
Option 4b. Compensation tied to actual valuable contribution for
customer?
Profit Sharing
• Works best for developing commercial products and services
• Customer and contractor partner up• Parties agree on profit sharing
”No Cure No Pay” by Tom & Kai Gilb
• Fixed Price• Payment only if Value Definition is met• Validated e.g. by trial use • Value Definition done with EVO method• Allows definition of desired impact of the software
• http://www.gilb.com/dl38
What is your unique value proposition?
We Need New SW Contracting Business Models!
CONCLUSIONS
Photo by ToniVC, CC-lisensed (non-commercial, sharealike, attribution)
BSOD by Martin Deutsch, CC-lisensed (non-commercial, sharealike, attribution)
SOFTWARE CONTRACTINGMajor contributor to this is the way we do
The Man-Hour
• De-facto industry standard• Smallest unit of work • Value can be evaluated• Billable or not billable
Impacts of focusing on billable man-hours
• De-motivation of people• Losing trust• Losing competitiveness• Losing focus on
producing valuable contributions to the customer
• Missed opportunities• Losing trust• Getting low quality work• Losing focus on
getting valuable contributions in exchange for pay
Smallest potentially valuable units of work
Outcome Time
SprintMinimal Marketable
Feature (MMF)
Potentially shippable product
increment
Compensation tied to actual valuable contribution for
customer?
What is your unique value proposition?
We Need New SW Contracting Business Models!
THANK YOU!
Antti KirjavainenTwitter: @anttikiEmail: [email protected]: http://www.slideshare.net/anttikirjavainen
