All agile development begins with the sales process. Internally, adopting agile approaches require the support of top management and project managers. External clients have to be sold on the agile approach and convinced to sign a contract that allow for agile development. Sales teams have to be able to convince external clients that the agile approach is the best for their project. Paul Klipp has been selling the agile process internally and to outside clients since 2004 with considerable success. In this presentation, he'll discuss how to sell the benefits of agile development to internal stakeholders and to outside clients and will provide an overview of different approaches to agile contracts.

1. Selling Agile
How to sell the idea of
agile development to
your managers, sales
team, and clients

3. Programmers

5. Testers

7. Scrum Masters

9. Project Managers

11. Sales People

12. Agenda
Managers
Sales Teams
Clients
Agile Contracts

13. Agenda
Managers
Today
Sales Teams In the next hour we will talk about
how to sell agile practices to:
Clients
Agile Contracts In Addition
If we have time, we’ll review types:

14. Project Managers

17. Dissa9sfac9on Driver for Change
Understand the It Involves hours Most projects go
PM’s life of meetings over budget

18. What can agile offer a project
manager?
Fast and accurate The opportunity to spend
reporting! their days doing more !
More structure!
value-adding activities"
Shared responsibility Better relationships with Less time spent
for success! co-workers and clients! in CYA activities!

19. The 50,000 foot view

20. The 50,000 foot view
The primary role is facilitation
Less up front planning, more ongoing planning
Less reports, lots more talking
Fewer long meetings, more short meetings
Less CYA, more collaborative problem-solving

21. Building self‐directed teams

22. Building self‐directed teams
Choose the right Help them to Give them space And you get:
people understand the and <me a mo<vated
business team that
problem produces be=er
quality, faster

23. Mapping PM phases to Agile phases
Define the Features/ Itera9ve Adapt to Reflect and
Product Release Plan Development Change Learn
Agile
Envision Speculate Explore Adapt Close
Agile Tools
Burndown
Vision Release Plan/ Itera9ve Retrospec9ve
Chart, BVCs,
Statement Backlog Planning
Kanban Board
PMI/PMBOK
Ini9a9ng Planning Execute Control Close

24. Planning
Release Planning
Iteration Planning
Story Cards
Estimates
Priorities

25. Agile Documenta9on
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26. Daily tracking
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27. Es9ma9ng Comple9on Date
Points and
In most cases, a project
manger couldn’t have full velocity
confidence in a delivery
date. Agile processes
provide tools for es<ma<on
that a customer can Incremental
understand.
releases

28. How to start?
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30. Sales People

31. Key points to stress
1 The benefits of agile are easy to understand
2 Happy clients lead to repeat business and referrals
3 Experienced buyers know the cost of poor quality and
inexperienced buyers fear it. Quality is an easy sell.
4 You can use the experience as a differen<a<ng factor

32. The life of a soYware salesperson
Selling the intangible is just selling promises
Salespeople may have stats on past projects,
but the key selling points are oSen difficult
to describe
There is a strong tempta<on to oversell,
leading to client dissa<sfac<on and low
return business and no referral business

33. Selling Agile
Processes to Clients
Selling Agile Processes to Clients

34. Key Points to Stress
1 High quality process leads to far lower maintenance costs
2 The client remains in control of the project
3 The client has an enormous degree of flexibility
4 Agile processes produce lower cost software
5 Considerable insight into the process

35. In the buyer’s shoes

36. In the buyer’s shoes

37. Why does soYware suck?
On average, professional coders make 100‐150
errors in every 1000 lines of code
‐ Carnegie Mellon study
The best way to reduce errors and lower cost is
to write less code
‐ Boehm, 1988

39. Chaos Report ‐ 2000

40. Chaos Report ‐ 2000
64% of all requested
features are a waste
of money and
introduce bugs

41. How itera9ve development improves quality
Doing high risk and high priority features means
that those features are tested much more.

42. Agile fixed Quality
If the triple constraints are <me/cost,
features/scope, and quality then:

43. Agile fixed Quality
If the triple constraints are <me/cost,
features/scope, and quality then:
Sc
e
op
Tim
e
Quality

44. Agile fixed Quality
If the triple constraints are <me/cost,
features/scope, and quality then:
Sc
Sc
– Fixed 9me and scope
e
op
op
Tim
project must let
e
e
quality slip because
there is always risk
Quality

45. Agile fixed Quality
If the triple constraints are <me/cost,
features/scope, and quality then:
Sc
Sc
– Fixed 9me and scope
e
op
op
Tim
project must let
e
e
quality slip because
there is always risk
– Agile processes fix
quality at the expense
of either 9me or Quality
scope

46. Benefits of
Timeboxed
Itera9ons

47. Stop when you
like
Release early
if you want
Benefits of to
Timeboxed
Change
Itera9ons vendors easily
Control scope

48. Sell the Experience
The customer is the master of Put responsibility in the hands of
business value those most able to deliver
1. Stories
The planning game 2. Es<mates
3. Acceptance test
Development Answer ques<ons
Demo Review, reflect, feedback

49. Clients can't tell good service
from bad on first contact.

50. Clients can't tell good service
from bad on first contact.
Selling to Clients

51. They have to assume that you know what you're talking about and they
do. They are not expec<ng you to prove that you know how to build
soSware,
They are expec9ng you to
understand and value them.

52. In a high‐risk service business
Your biggest compe<tor isn't another company
like you

54. It’s the client’s fear that none of you are any good.

55. Therefore, don't cri9cize the
compe99on, or the client may
give up on all of you and find a
different way to sa9sfy his need.

57. Your prospect is overwhelmed with op9ons and details

58. Befuddled by facts in a sea of op<ons, your
prospects are forced to look at irrelevant
details to form their opinions.
Pick one unique message and drive it home.

60. Pick one that makes you stand out and hammer it home

61. The client doesn't want the best possible choice.
The comple<on can be be=er, but if you are a li=le
less scary, you win.
Focus on elimina<ng the prospect's fears, not on
selling your superiority.

63. Tell the straight truth without embellishment

64. The sale starts when the contract is signed

65. The sale starts when the contract is signed
It's a common misconcep9on that when the contract is signed, you have won.
The client chose you and now it's just a 9t for tat service rela9onship.
The client didn't chose you and doesn't trust you yet.
Your new client just did you a huge favor by taking a giant risk and giving you a
chance to earn his trust.

66. Gra9tude, gra9tude, gra9tude.
You can't show it enough.

67. Your clients
have very few points of contact.
ini<al sales call recep<onist contract le=er planning mee<ngs status reports
Make every point of contact into a marke<ng
exercise. Make every one be=er, and then make
them be=er again.

68. Agile Contracts
Main types of agile contracts:
• Fixed Price
• Time and Materials
• Op<onal Scope
• Sa<sfac<on Guaranteed
• DSDM
• Pay Per Use
• Co‐sourcing

69. Agile Contracts
Why have a contract?
• Control tendency toward self‐interest
• I prefer incen<ves to controls
★ Incen<ves are less expensive
★ and they build trust

70. Agile Contracts
Give the risk Scope ‐ Client
to the party
best able to
manage it
Technology ‐ Vendor

71. Fixed Price Contract
• Vendor takes all the risk • Customer packs in features
• Tendency to bid low, with high (see Chaos report)
cost of change • Favors the most desperate or
• No incen<ve to control scope op<mis<c supplier
• Required costly big up‐front • High failure rates due to
design underbidding vendors
• Creates incen<ves to let quality • Vendor pads bid for risk
slip • If all goes well ‐ client overpays
• Requires a lot of expensive • If it goes badly, quality suffers
controls
• Customer has no incen<ve to
accept work

72. Time and Materials Contract

73. Time and Materials Contract
No incentive
to be efficient

74. Time and Materials Contract
Buyer bears No incentive
al of the risk to be efficient

75. Time and Materials Contract
No incentive
Buyer bears No incentive for supplier
al of the risk to be efficient to control
scope

76. Op9onal Scope Contract
• Risk is limited to one itera<on
• Customer pays at each itera<on
• Work can stop at any <me
• Customer receives value early
• Visibility builds trust
• Velocity is a reliable measure
• Scope remains flexible
• Most important features are done first
• Client can change vendors

77. Target Cost Contract

78. Target Cost Contract
Fixed cost

79. Target Cost Contract
Shared costs of
Fixed cost exceeding target

80. Target Cost Contract
Shared Shared costs of
Fixed cost responsibility exceeding target
for scope

81. Target Cost Contract
Shared Strong incen<ves to
Shared costs of
Fixed cost responsibility exceeding target collaborate toward
for scope shared goal

82. Sa9sfac9on Guaranteed Contract
• Low cost <me and materials bid
• Plus a bonus if the customer is sa<sfied
• Best for small projects
• Good for building trust
• Risk that buyer won’t admit to being sa<sfied
• Bigger clients are more likely to pay bonus

83. DSDM Contract
• MoSCoW ‐ feature priori<za<on scale
• Must have ‐ contractually obligated
• Should have ‐ necessary to make client happy
• Could have ‐ if there’s <me and budget
• Won’t have ‐ can be used to re‐evaluate scope
• Requires Big Upfront Design, but can be flexible later
• Fixed Price
• Client might not get Coulds and Shoulds

84. Pay‐per‐use/Pofit Sharing Contract
• Vendor is paid only when soSware yields value
• High upfront vendor cost
• Creates a long‐term rela<onship
• Aligns priori<es and objec<ves
• Requires a LOT of trust

85. Co‐sourcing Contract
• Client and vendor develop together
• Vendor passes skills to client
• Builds trust
• Vendor must have a good reputa<on

86. My favorite Contract
• Upper and lower cost limits and target cost
• Time and materials to es<mate
• Discount (eg. 20%) for work over es<mate
• No cost for exceeding limit
★ eg. If target cost is $10k and range is $5‐15k
★ If total work is $10k, great
★ If total work is $5k, we get a $2.5k bonus
★ If total work is $15k, we earn $14k
• This makes accountants happy by limi<ng their risk limits while
crea<ng incen<ves to manage scope and efficiency without
sacrificing quality.

87. That’s it!
Questions?