Category Archives: Agile

3 things I learned from “The Art of Business Value”

art of businessI am trying something new with this blog post – providing a mix of book review and a summary of what I learned about a book I really like. Waiting for Mark Schwartz to release his latest book “War and Peace and IT” I thought I re-read his earlier works. And as I was reading “The Art of Business Value” again I noticed that I am reading it with fresh eyes and that I appreciate this book even more than a few years ago.

Spoiler alert – the answer the book provides is a bit of a cop out: “…Business value is what the business values, and that is that.” But reducing this book to the final response to the question does not do it justice. The book artfully explores different angles of business value and why they are challenging when it comes to driving Agile delivery on the basis of this: ROI, NPV, Shareholder Value.

This is must read for all product owners to understand why there is not one answer to the question of business value and why Mark’s final response is unsatisfying yet completely appropriate. The book is also small enough that you don’t have to feel bad to recommend the book to the product owners you work with. I have recommended my favorite book of all time “Goedel, Escher, Bach” to many people fully knowing that only very few people would work their way through this fascinating but challenging book. “The Art of Business Value” is a book you can recommend without such thoughts on your conscience.

What I found even more useful in Mark’s book is that he explores the space around business value and three key learnings stand out for me:

  1. That the language of Agile can lead to a new command and control paradigm – this time by the product owner or Agile coach as Only Person you can listen to (OPYCLT)
  2. That the product owner as interface to the business requires a special kind of organisation and having X-teams are a better approach
  3. That the bureaucracy and governance we encounter is codified business value of the past

Let’s explore each of these a little further:

Agile as a new command and control paradigm

This one hits close to home. For a while I have been complaining about the Agile coaches out there who evangelise their methods without being able to explain why calling something a “PBI” is better than “User Story” or why we will only provide documentation in code. Mark adds another interesting dimension to this, if the product owner is the Only Person You Can Listen To for the team then how is this different to the project manager assigning work. Mark argues in a similar vein that the prescription of technical practices is a similar command and control rule – I recently spoke to an organisation that does not do automated testing and rather does production monitoring in full knowledge that they can respond quickly enough if something breaks. So I think we need to all be vigilant to not let Agile drift into just another command and control world this time run by the agilists instead of the project managers.

Product Owner vs. X-Team

In traditional Agile thinking the product owner represents the business and he presents the business problems to be solved to the Agile team which go off and solve them. Mark compares this with a loosely coupled system where the details of implementation is up to the team as long as they fulfil the contract that the product owner has made with the business. I am with Mark that this too simplified. We have plenty of experience that shows that the product owner needs help to manage the backlog and to work with the rest of the business. Mark introduces a new term “X-Team” from another book as guiding principles that teams need to work internally and externally. It is amazing how much more productive teams can be when they have rich context. For one of my Agile teams we arranged recordings of customer calls and visits to call centers so that the team got a better understanding of the business problem rather than relying on the product owner. The levels of innovation immediately increased when we started doing this.

The value of bureaucracy

This one is probably the one that requires the most consideration and came out of nowhere for me in re-reading the book. I think I had dismissed this point last time I read it. Mark argues that the processes you encounter were at some stage codified business value in many cases. And that we would be at risk of losing tacit knowledge of the value if we just throw it all out. Rather we should understand what the underlying value was and whether or not it is still applicable. You can then decide whether there is an alternative way to create that value or whether you continue with the established process. A good example is transparency as a value which might require you to do certain things that might not on first view provide value of itself like additional documentation or reviews.

There you go – I really enjoyed the second time I read his book and hope you will too.

The Anti-Transformation Transformation of Agile and DevOps

Organisational transformations have been part of organisational life for many years. There are reorganisations, big IT transformations and nowadays Agile, Cloud, Digital or DevOps transformations. These transformations used to follow a familiar pattern: an organisation is going through a major transformation and invests significant amounts of money over a 3-5 year horizon into the transformation. At the end of the transformation when the “end-state” was achieved, the level of investment got reduced and focus shifted to stabilisation and cost reduction. Over time the requirements changed more than the current level of investment allowed us to adapt for. Technical debt and the gap between needs and system functionality increased until this reached a level that required significant reinvestment or a new transformation to the next trend.

The cycle repeated every few years. While far from ideal it seemed to work okay, it was good business for technology companies and consultancies, it provided a level of comfort for organisations as they executed their 3-5 year roadmaps of transformation. The duration was not really a problem as the environment changed slowly enough for organisations to catch-up with each cycle. The level of change in the environment has increased and competitors are increasingly coming from digital startups that move very quickly. This means that the traditional transformation cycle is too slow to react. We cannot afford 3-5 year cycles any longer and rather need to create an organisational capability to continuously adapt to the environment. If you do one more transformation in your organisation it needs to be the anti-transformation transformation. The idea of this transformation is to transform not with a specific technical capability in mind but rather to transform to an ever improving, a learning organisation and to build the organisational capability that allows you to drive this ongoing process in a sustainable pace and process.

anti-transformationThere are obviously a few things different with this transformation and the most obvious yet confusing thing is that there is no end-state. There is no end-state technology architecture, there is no end-state organisational structure and there is no end-state delivery methodology. But if there is no end-state how do we know when we are done? This is the bad news, we will never be done. We have to create capabilities that make it easier and easier to adapt incrementally and we need mechanisms to guide each improvement even in the absence of an end-state.

Having this discussion with my clients makes me feel like a GP who is telling the patient that is coming to the office that there is no pill that I can give to reduce his blood pressure and shortness of breath, but rather that the patient needs to eat healthier and do more sports. It is not going to be easy and each day will present a new challenge. Furthermore as his consultant I cannot do this work for him, I can only guide and support, but the patient has to do a lot of the work himself. The exact same is true for organisations neither Cloud, Robotic Process Automation, AI or any other technology will magically solve the problems. We need our organisations to change to a healthier lifestyle to remain fit and survive.

Enough of the analogy, but I hope you get the point. So what can we do to guide the anti-transformation transformation? First of all our view of technology architecture needs to change, as highlighted in this blog post there are 3 architectures we are dealing with and each one of them needs to be adaptable: our business systems architecture, our IT tools architecture and our QA and data architecture. We also need to have a guiding system to show us where our technical debt is and where systems are highly coupled – these need to reduce to remain adaptable. Last but not least we need to find ways that allow us to continue to evolve organisational structure and methodology in a way that does not disrupt the business – it is not about moving from the Spotify model to SAFe or vice versa, but rather its about running small experiments with your own contextual methodology or org structure to be able to evolve and continuously improve. If you are still in the beginnings of the anti-transformation then you might want to adopt one of the more common methodology frameworks to get yourself started, but if in 2-3 years you are either still doing the same things or feel the need to adopt another model then you have a problem. Neither of those two extremes should be correct, you should feel like you are working with a methodology and org structure that is truly your own and that has been optimized for your context over time.

One last thing to note – larger disruptions in business or technology will still cause more challenging needs for change and require you to increase investment, but it should not require another transformation. It should rather require a larger incremental change that is easier to manage because we decoupled our architectures and methods.

The transformation is dead, long live the anti-transformation transformation.

Don’t waste a perfectly fine Transformation for your Agile and DevOps Change efforts

Over last couple of months I have been speaking to project teams and organisations that are undergoing some major technology transformations and which have set out on this course in traditional more or less waterfall approaches. Changing course during such a transformation is risky and any changes are usually more of a smaller nature as the risk appetite is low when so much money is on the line. I understand, while I personally think that Agile is less risky in any case, the organisational maturity with Agile and the required change energy are probably preventive of making a change in-flight.

But here is the thing, once you get to the end of the current transformation your whole delivery process is tuned for the big change that you are currently undergoing. If you use the same governance approach and delivery method for the smaller changes that come after the transformation you will be really inefficient. You will wish you had used the transformation to not only set you up with a new technology but also with a delivery mechanism that supports you effectively after the transformation is over when change is smaller and more frequent.

This is where a bit of planning ahead can go a long way. If you realise the above you can use the time while your transformation is still under way to prepare yourself for post-transformation agile delivery. You can build DevOps practices into your ways of working, because they support waterfall delivery as well as Agile delivery. All the automation and process improvements will make the transformation effort less risky and the cultural shift can start to take momentum through changed behaviour. If you have a staged go-live over multiple releases you can start to embed Agile into your production support and maintenance processes so that your organisation starts to learn about Agile methods of working.

In my book “DevOps for the Modern Enterprise” I talk about transaction costs in IT and this is another case where this concept is helpful to explain the situation. If your transaction cost for a release (all the efforts for regression testing, deployments, release planning, go-live support etc.) is 100 units for your transformation which is a large development effort of 10000 units. Then using the same processes will still cost you close to 100 units for smaller changes post transformation (let’s say 1000 units). This will make delivery of small changes really inefficient and might start to bundle them up again into larger less frequent releases. What you should do is to take a close hard look at all the transaction costs and invest during the transformation to reduce them so that you get yourself ready for the time after. Otherwise the post-transformation blues is going to come quickly and you will soon see yourself in the next transformation cycle to improve the delivery process.

Transformation go to waste

Another reason to invest during the transformation is that once there is less work to be done on the functional side there is probably also less money around to make the required investment in changing the way you work and the automation and tooling that is required to support it. It is much easier to justify the bit of extra investment while the transformation is still under way and use the attention of the leadership team and the change energy already in the company during transformation to set yourself up for success post transformation. Don’t let a perfectly fine transformation go to waste for your Agile change effort.

From Factory to Labs – is that the better metaphor?

As you probably know this blog was partly inspired by my frustration with managers and leadership who compared IT delivery with factories. This year at Agile Australia I was very positively surprised that the topic of the factory metaphor came up in a few talks. I am really glad we finally talk about the problems that stem from management using manufacturing thinking for IT delivery. Given I have spoken about this before I don’t want revisit the reasons here and rather spend a bit of time on an alternative model that was put forward at the conference by Dom Price from Atlassian – it’s not a factory it’s a lab.

Look at this slide from the talk for a summary of why the Labs model is more appropriate.

2017-06-23 14.20.51

There is a lot I like about the Labs metaphor that could inspire better management – the inherent uncertainty around IT delivery, the data driven nature supported by the scientific method, building in failure as a normal occurrence for which we try to minimise the impact instead of assuming we could prevent it. That being said, I feel the Labs model might be taking it perhaps a step too far as there is a level of predictability that is required by management and by business stakeholders. A delivery roadmap highlighting features to be delivered is often underpinning the business case. I might be too far away from scientific labs and the right examples might exist, but it is my impression that those roadmaps are less common in labs than we would want in IT. My experience with labs has been that timelines are full of unknowns, more than we would accept in IT delivery.

At this point there are three mental models that I am aware of, the factory, the design studio and the lab. I believe the first one is the dangerous one to use as inspiration for management principles, for the last two I am hopeful that combined it might make for the right inspiration for management going forward. I have to think a bit more about this on the back of Agile Australia. Stay tuned as I will be coming back to this topic.

6 Questions to Test whether You are Working with your System Integrator in a DevOps way

anger-1226157_1280If you have been following my blog, you will know that I am disappointed on how little the cultural relationship between companies and their systems integrators is being discussed in blogs, articles and conference talks. As I am working for an SI I find this surprising. Most large organisations work with Sis, so why are we not talking about it? If we are serious about DevOps we should also have a DevOps culture with our SIs, shouldn’t we?

When I speak to CIOs and have a discussion about DevOps and how to improve going forward, I often get a comment at some stage – “Mirco you seem to get this. Why is it then that not all projects with your company leverage the principles you talk about?”.

A good question, and one that a few years ago I didn’t have an answer to and hence made me a bit unsure on how to answer. I have spent a lot of time analyzing in the years since. And the truth is, that often the relationship does not allow us to work in the way most of us would like to work.

The other week I had a workshop with lawyers from both my company and lawyers from a firm that represents our clients to discuss the best way to structure contracts. Finally we all seem to understand that there is a lot of room for improvement. We need to do more of this so that we can create constructs that work for all parties. I am looking forward to continue working them – and how often do you hear someone say that about lawyers 😉

Coming back from yet another conference where this topic was suspiciously absent, I thought I write down this checklist for you to test whether you have the right engagement culture with your system integrator that enables working to the benefit of both organisations:

  • Are you using average daily rate (ADR) as indicator of productivity, value for money, etc.?
    +1 if you said No. You can read more here as to why ADR is a really bad measure all things being equal.
  • Do have a mechanism in place that allows your SI to share benefits with you when they improve through automation or other practices?
    +1 if you said Yes. You cant really expect the SI to invest in new practices if there is no upside for them. And yes there is the “morally right thing to do” argument, but let’s be fair, we all have economic targets and not discussing this with your SI to find a mutually agreeable answer is just making it a bit a too easy for yourself I think.
  • Do you give your SI the “wiggle room” to improve and experiment and do you manage the process together?
    +1 if you said Yes. You want to know how much time the SI spends on improving things, on experimenting with new tools or practices. If they have just enough budget from you to do exactly what you ask them to do, then start asking for this innovation budget and manage it with them.
  • Do you celebrate or at least acknowledge failure of experiments?
    +1 if you said Yes. If you have innovation budget, are you okay when the SI comes back and one of the improvements didn’t work? Or are you just accepting successful experiments? I think you see which answer aligns with a DevOps culture.
  • Do you know what success looks like for your SI?
    +1 if you said Yes. Understanding what the goals are that your SI needs to achieve is important. Not just financially but also for the people that work for the SI. Career progression and other aspects of HR should be aligned to make the relationship successful.
  • Do you deal with your SI directly?
    +1 if you said Yes. If there is another party like your procurement team or an external party involved then it’s likely that messages get misunderstood. And there is no guarantee the procurement teams know the best practices for DevOps vendor management. Are you discussing any potential hindrance in the contracting space directly with your SI counterpart?

A lot is being said about moving from vendor relationship to partnerships in the DevOps world. I hope this little self-test helped you find a few things you can work on with your systems integrator. I am living on the other side and often have to be creative to do the right thing for my customers. It is encouraging to me to see that many companies are at least aware of these challenges. If we can have open discussions about the items above, we will accelerate the adoption of DevOps together. I promise on the side of the SIs you will find partners that want to go the way with you. Find the right partner, be open about the aspects I described above and identify a common strategy going forward. I am looking forward to this journey together. Let’s go!

How to Structure Agile Contracts with System Integrators

As you know I work for a Systems Integrator and spend a lot of my time responding to proposals for projects. I am also spending time as consultant with CIOs and IT leadership to help them define strategies and guide DevOps/Agile transformations. An important part is to define successful partnerships.  When you look around it is quite difficult to find guidance on how to structure the relationships between vendor and company better. In this post I want to provide three things to look out for when engaging a systems integrator or other IT delivery partner. Engagements should consider these elements to come to a mutually beneficial commercial construct.

Focus on Dayrates is dangerous

We all know that more automation is better, why is it then that many companies evaluate the ‘productivity’ of a vendor by their dayrates. Normally organisations are roughly organised in a pyramide shape (but the model will work for other structures as well).

It is quite easy to do the math when it comes to more automation. If we automate activities they are usually either low skilled or at least highly repeatable activities which are usually performed by people with lower costs to the company. If we automate more tasks that means our ‘pyramid’ becomes smaller at the bottom. What does this do to the average dayrate? Well of course it brings it up. The overall cost goes down but the average dayrate goes up.

pyramid

You should therefore look for contracts that work on overall cost not dayrates. A drive for lower dayrates incentives manual activities rather than automation. Besides dayrates it is also beneficial to incentivise automation even further by sharing the upside of automation (e.g. gain sharing on savings from automation, so that the vendor makes automation investments by themselves)

Deliverables are overvalued

To this date many organisations structure contracts around deliverables. This is not in line with modern delivery. In Agile or iterative projects we are potentially never fully done with a deliverable and certainly shouldn’t encourage payments for things like design documents. We should focus on the functionality that is going live (and is documented) and should structure the release schedule so that frequent releases coincide with regular payments for the vendor. There are many ways to ‘measure’ functionality that goes live like story points, value points, function points etc. Each of them better than deliverable based payments.

Here is an example payment schedule:

  • We have 300 story points to be delivered in 3 iterations and 1 release to production. 1000$ total price
  • 10%/40%/30%/20% Payment schedule (First payment at kick-off, second one as stories are done in iterations, third one is once stories are releases to production, last payment after a short period of warranty)
  • 10% = 100$ on Signing contract
  • Iteration 1 (50 pts done): 50/300 *0.4 * 1000 = 66$
  • Iteration 2 (100 pts done): 100/300 * 0.4 * 1000 = 133$
  • Iteration 3 (150 pts done): 150/300 * 0.4 * 1000 = 201$
  • Hardening & Go-live: 30% = 300$
  • Warranty complete: 20% = 200$

BlackBox development is a thing of the past

In the past it was a quality of a vendor to take care of things for you in more or less a “blackbox” model. That means you trusted them to use their methodology, their tools and their premises to deliver a solution for you. Nowadays understanding your systems and your business well is an important factor for remaining relevant in the market. Therefore you should ask your vendor to work closely with people in your company so that you can keep key intellectual property in house and bring the best from both parties together, your business knowledge and the knowledge of your application architecture with the delivery capabilities of the systems integrator. A strong partner will be able to help you deliver beyond your internal capability and should be able to do so in a transparent fashion. It will also reduce your risk of nasty surprises. And last but not least in Agile one of the most important things for the delivery team is to work closely with business. That is just not possible if vendor and company are not working together closely and transparently. A contract should reflect the commitment from both sides to work together as it relates to making people, technology and premises available to each other.

One caveat to this guidance is that for applications that are due for retirement you can opt for a more traditional contractual model, but for systems critical to your business you should be strategic about choosing your delivery partner in line with the above.

I already posted some related posts in the past, feel free to read further on:

https://notafactoryanymore.com/2014/10/27/devops-and-outsourcing-are-we-ready-for-this-a-view-from-both-sides/

https://notafactoryanymore.com/2015/01/30/working-with-sis-in-a-devopsagile-delivery-model/

https://notafactoryanymore.com/2015/02/26/agile-reporting-at-the-enterprise-level-part-2-measuring-productivity/

Agile Governance – A short overview

I recently ran a seminar on Agile governance, so what does this even mean? Agile governance requires you to find the right balance between the complete chaos of no governance at all and the smothering of all Agile benefits in overbearing governance. In this article I want to provide an overview on Agile governance across a few levels: Transformation, Program, Project and team level. There is a lot more to be said than I can put into this post, so expect me to come back to this over time.

Agile Transformation governance

To borrow from Lord of the Rings “One does not simply transform an organisation to Agile”. At the transformation level it is important to provide support for teams as they encounter challenges for adopting Agile. Some problems can proactively be addressed like training, coaching and enable good engineering/DevOps practices. Others will be uncovered as you start down the adoption path. Those blockers can be identified from the retrospectives at the team level as well as by speaking to Iteration managers and coaches. These blockers should be prioritised and provide the transformation backlog to address at organisational level. I find the below transformation governance structure very helpful as a starting point:

agile governance

 

Agile governance at the program/project level

I have shared my view on how to manage at the program level before here. Just one additional word of warning: Do not try to compare teams against each other for performance measurements, even under the guise of gamification this really can only lead you to bad development patterns. There are teams where this works and where their leaderships does not use the information for the wrong reasons, but the risks are higher than the benefits. Defining the success criteria for each team individually is a much better way to deal with this.

Agile governance at the team level

At the team level the SCRUM methodology provides a set of useful governance elements which you should leverage, adopt and adapt:

  • Sprint Reviews
  • Sprint Planning
  • Retrospectives
  • Team based estimations

Additionally you can use Agile maturity models and Agile metrics for teams to evaluate themselves and their progress in maturing their Agile practices.  Good coaches can help teams in this evaluation without being judgmental.

A comment on measuring individual productivity:
How do you measure the productivity of team members in your Agile teams? The short answer is YOU DON’T. I have talked about productivity in this post and if you don’t believe me perhaps Dilbert can help you understand how poisonous this idea is for your teams:

dilbert2

 

I am looking forward to hear from the community what you use to govern your Agile adoption across the different levels.