Selling Customers on SCRUM (sales agreements)
> -----Original Message-----Don,
> From: firstname.lastname@example.org
> From: dweiss@...
> Subject: Selling Customers on SCRUM (sales agreements)
> I have been studying Agile Development processes for a short
> time now and am
> particularly interested in Scrum. I am convinced that our
> company would
> greatly benefit by shifting to Scrum from a more traditional,
> process used now. I think I could get management buy-in to
> try it but for
> one stumbling block -- as part of my pitch, I need to be able
> to educate our
> sales team on how to sell customers on an Agile development
> approach to
> software, and how to structure future sales agreements. Most of our
> customers want stable, fixed bids up front before they will
> proceed with
> development, and our partners want to know cost and profit information
> before they will commit resources. Fixed bids have not been
> very kind to
> us, as the customer rarely knows exactly what they want at
> the onset (which
> is why I think Scrum would be such a good fit!) Does anyone have any
> information that would help?
> Thanks in advance :).
> - Don Weiss
There are a number of strategies to use here. They range from:
- Tell the customer nothing, and use agile methods internally
- Tell the customer everything, and let the customer drive.
Let's look at each in turn. I warn you that your sales folks aren't going
to want to upset the status-quo, so you'll need management support for these
ideas. I can tell you that I have used several of these ideas, and they can
work quite well.
1. Tell the customer nothing, and use agile methods internally.
Agile methods provide a better way to estimate and control a project. Even
when the customer doesn't know you are using them, they lead to better
results because your internal estimation and control will be better.
What do you do now when you bid a project? Do you spend a couple of weeks
or a month analyzing and estimating it so you can bid it? What if, instead,
you ran a couple of one week agile iterations, developing part of the
project. What if you measured how much you were able to get done in that
period. What if you used *that* to help you estimate the total project.
You'd probably wind up with a better estimate with which to calculate the
build. Especially if you used the concept of story points and velocity from
2. Tell the customer that you will be making incremental deliveries and
share the risk.
I've personally used this strategy, and it works quite well. You tell the
customer that you are going to deliver working software to him every N
weeks. You will expect his feedback from those sessions, and will
incorporate it in the subsequent release. This gives the customer a certain
amount of control.
As for price, you negotiate a fixed bid for the project as in (1) above, but
then you convert that into a low time & materials rate, and a suite of
milestone payments. This is a share-the-risk approach. The customer gets
to have a certain amount of control during the process, in return he shares
the risk. If you get done quicker than expected, then your cash flow if
greater than expected. If you get done slower than expected, then the
customer has to pay the low T&M rate longer.
3. Let the customer drive. Tell him you are going to deliver working
software to him every thirty days, or every two weeks, or even every week.
I've used this approach with success too. The customer pays straight time
and materials, but has complete control over what gets developed and when.
4. Let the customer drive and pay for points. I've used this one too, and
it worked pretty well. We break the project up into stories as in Extreme
Programming. We estimate those stories with story points. We use very
short iterations (one or two weeks) and let the customer drive them. The
customer pays a fee based upon story points.
Say we negotiate $1000/story point. If we get 20 points done in an
iteration, then we bill the customer for $20,000.
In each of these story driven cases you need to have acceptance tests,
written or approved by the customer, otherwise you'll get into quibbling
over whether the stories were finished or not.
Robert C. Martin |
President & Founder |
Object Mentor Inc. | unclebob @ objectmentor dot com
PO Box 5757 | Tel: (800) 338-6716 x15
565 Lakeview Pkwy | Fax: (847) 573-1658
Suite 135 |
Vernon Hills, IL, | www.objectmentor.com