Holding Managed Services Vendors Accountable in an Agile Environment

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1 White Paper Holding Managed Services Vendors Accountable in an Agile Environment By Robert Gassaway and Gerry Robinson

2 Abstract Managed services clients can hold vendors accountable to software output in an enhancements only managed services contract where Agile methodology is the methodology of choice. The key is to use velocity increases as the commitment service level agreement (SLA).

3 Managing the Agile Shift As companies continue to seek greater efficiencies from their application portfolio and reduce costs associated with development and maintenance, more and more organizations are considering the use of Managed Services providers for application development. This trend, coupled with a shift toward the Agile development model for development teams, has created a challenge for the client. The dilemma is how to hold the vendor accountable for sustainable and consistent output of software when Agile is so fluid and development work is so variable. This white paper explores a method to hold vendors accountable for measureable software output in an Agile environment. Measuring Software Output: Application Support Lifecycle The application support lifecycle contains many facets. However, you can break down those facets into six core areas: Monitoring Service Desk for Response Triage Repairing Tuning or Proactive Improvement Enhancements When considering supporting an application via a managed services engagement, understanding these core areas is important, because managed services is best applied in routine and measurable work. The six core areas analyzed further don t always perfectly fit this definition. Let s look at them again in detail in Table 1: Area Routine Measurable Comments Monitoring Yes, hours monitored is routine. Yes, alert trends provide a measure. Some options exist for device and applications under contract. Service Desk for Response Yes, hours staffed is routine. Yes, ticket count trends provide a measure. Additional pricing models include ticket based pricing and user based pricing. Triage Yes, hours staffed is routine. Yes, ticket count trends provide a measure. Repairing Yes, through average effort per impact severity ticket type. Yes, resolution time and average effort. Tuning or Proactive Improvement No, as proactive opportunities are often discovered and acted upon with available bandwidth. Yes and no, can be measured with time invested. However, a measurement might be how much improvement was gained from the action. Enhancements No, as enhancements are feature requests generated from users or regulatory changes that cannot be foreseen or estimated before being known. Yes, but difficult as a function point system must be in place to measure. Some measure via releases, however, releases vary in size which means it is a marginal measure for output. Table 1: Application support lifecycle six core areas 3

4 Holding Managed Services Vendors Accountable in an Agile Environment Of the six areas detailed in the application lifecycle, five would be considered application management and one area (Enhancements) would be considered application development. Enhancements are not routine and are difficult to predict and measure. Those characteristics hit precisely at the issue that organizations are having in holding managed services vendors accountable to output of software within the engagement model. Enhancements Monitor against disrupting the subjective assessment system. In fact, they encourage the relative dynamic. Now the issue becomes clear. To measure output of software with reliability you need a function points system. However, a function points system is bad for Agile. What is the solution? The solution is to leverage measured aspects of an Agile development team that relate to output. One such measure is velocity. Velocity is a metric that predicts how much work an Agile software development team can successfully complete within a two-week sprint or a similar time-boxed period 1. Tune Repair Application Support Life Cycle Triage Service Desk Since velocity is a measure of story points delivered during an iteration, velocity can be used to predict the amount of work to be completed over future iterations. To calculate, simply add the number of story points completed over the sprint period. This is velocity. The way to hold a vendor accountable to output is to have them commit to velocity increases measured per scrum team over a period of time. One example would be to have them commit to a five percent increase in Velocity per team by the fourth quarter of contract year one. Then do the same for year two. Figure 1: Application support lifecycle However, the challenge gets more difficult when the organization is using the Agile methodology. Why? The simple answer is that function points and Agile methodology don t blend well. Function points is a unit of measurement used in a system of assessing software in pre-determined units. This system is agreed upon between client and vendor and needs to be precise. It ultimately establishes an objective and standardized unit of measurement. The problem with Agile is that it doesn t use function points. It uses story points. Story points and function points are different in that story points are subjective. This is desired, as scrum teams gain a relative sense of size when working together. All of the experts and Agile textbooks advise An organization can experience real output value with this mechanism without disrupting the story point estimation process or the enhanced productivity of maturing Agile teams. By increasing velocity commitments, the client receives more software at higher quality for the same price, thus realizing true value. Conclusion: Applying an Enhancements Only Managed Services Solution Managed services is an engagement model that works best with routine and measurable scope. However, it can be applied when a good vendor finds creative ways to be held accountable, thus promising value and increasing client satisfaction. 1 Agile-velocity,

5 At Ciber, we regularly propose this model for clients that have Agile in their environment. One such client used Agile only in the development phase of its Systems Development Lifecycle (SDLC). The remaining phases were managed with a Waterfall methodology. Providing a way for them to create a vendor accountability metric has given the client an opportunity to have outcome-based managed services work successfully for them in a hybrid SDLC environment. 5

6 Holding Managed Services Vendors Accountable in an Agile Environment About Ciber, Inc. Ciber is a global IT consulting company with offices in North America, Europe and Asia/Pacific. Client focused and results driven, Ciber partners with organizations to develop technology strategies and solutions that deliver tangible business value. Founded in 1974, the company trades on the New York Stock Exchange (NYSE: CBR). For more information, visit 6

7 About the Authors Robert Gassaway Senior Director, Application Development & Management Gerry Robinson Solutions Director, Managed Services Robert Gassaway is Ciber s Senior Director of Operations for the Application Development and Maintenance Practice. He also manages the operations of the Tampa Global Solution Center (GSC). Gassaway has 24 years of IT industry experience, managing, supporting and selling technology solutions. Prior to joining Ciber, he held management positions with Cognizant Technology Solutions and EDS, where he started his career in the Systems Engineer Development Program. Gerry Robinson s experience spans more than 15 years in the information technology industry helping business to scope, develop and implement large-scale information technology engagements. As a managed services solutions expert, Robinson applies his unique skills in scoping complex IT projects. In 2009, he designed the industry s first web-based automated statement of work and planning system to accelerate the planning of fixed-price IT projects. Outside of work, Robinson sharpens his skills by writing IT books and teaching Information Technology at a local accredited college. 7

8 Ciber Inc 6363 South Fiddler s Green Circle Suite 1400 Greenwood Village Colorado USA Tel. (800) info@ciber.com