Transcript PowerPoint Template

IBM Software Group
Economics of Agile Development
Sue McKinney
Vice President,
IBM Software Group
Development Transformation
[email protected]
Ted Rivera
Senior Agile Transformation Architect
[email protected]
Agenda…
1
Abstract
2
The Move to Agile
3
Costs and Benefits of Agile
4
How Agile Helps Increase Income
5
Conclusions
Abstract…
Many companies are using Agile.
Why?
Is the investment worth the
transition?
Are the risks warranted?
IBM Challenges
The Move to Agile…IBM Perspective
“A well proven data point within IBM is
that 80% of our business comes from
returning/existing customers.”
- An IBM Adage
The Move to Agile @ IBM...The Prior State
Critical situations
Quality issues
Late shipments
Remedy: What about Agile?
The Move to Agile…Industry Wide
Agile
improves
productivity
Stakeholder
satisfaction
improved
Data
suggests
Agile is
better
Increases
product
quality
mitigates
cost
issues
February 2008 Agile Adoption Survey posted at http://www.ambysoft.com/surveys/agileFebruary2008.html
But… we have
“complications”
A Global Team of IBM Software Group Developers
Southbury
Pittsburgh
Poughkeepsie New York City
Princeton
Somers
Canada
Toronto,Ottawa
Montreal, Victoria
Andover
Bedford, MA
Bedford, NH
Lexington
Westborough
Westford
Cambridge
Hursley
Edinburgh
London / Staines Warwick
York
Milton Keynes
Cork
Dublin
Galway
Rochester, MN
Boulder
Denver
Lenexa, KA
Tucson
Phoenix
Austin
Dallas
Fairfax
Raleigh
Charlotte
Lexington, KY
Atlanta
Boca Raton
Tampa
Sao Paulo
Total
11,000
3,500
100
3,900
6,600
25,100
Delft
Stockholm
Krakow
Warsaw
Boeblingen
Paris
Pornichet
Beaverton
Kirkland
Seattle
Foster City
San Francisco
SVL/San Jose
Almaden
Agoura Hills
Irving
El Segundo
Costa Mesa
Las Vegas
US
Canada
Latin America
EMEA
AP
China
Beijing
Shanghai
Haifa
Rehovot
Cairo
Rome
Yamato
Taiwan
India
Bangalore
Pune
Hyderabad
Gurgaon
Malaysia
Perth
Gold Coast
Sydney
Canberra
Laying the Foundation for Measurement
Must demonstrating financial
benefits:
 Productivity of the Team
 Quality of the Offering
 Stakeholder Satisfaction
 Cost of Development
Business Value
The Move to Agile…Measuring Methods
Benefit/
Cost
Ratio
Return on
Investment
Benefit
B/CR = Cost
Benefit - Cost
ROI =
Cost
How much
money is gained
x 100%
Value in dollars
and cents
The Move to Agile…Evidence Based Management
When deciding
look at the
right data
at the right depth
But what do
you do when
there is little
sound data
available?
- Jeffrey Pfeffer and Robert I. Sutton
The Move to Agile…Measuring
There is a
synergy between
economics
and Agile
such as…
The ability to replan a project along the way
Close connections with those invested in your project
We gave it a try.
The Move to Agile…IBM Case Study
IBM Dev Mgr with 600 engineers using Agile.
Teams are beginning to see :
•
•
•
•
•
More Stable Code
Able to Start System Testing earlier
Earlier Time to Market
Higher Quality Deliveries
Teams More Focused and Engaged
Was the Investment Worth It?
Costs and Benefits of Agile…
Costs and Benefits…Theory vs. Practice
Breakdown
Breakdown
Cost
Profit
Staged
Releases
Single
Release
Investment
Time
Agile projects reach break-even earlier than traditional
waterfall projects for applications of the same size.
Interpretation of Denne and Huang’s work by Mary and Tom Poppendieck http://www.rallydev.com/documents/Rally_Agile_Customers_Toolkit.pdf
Costs and Benefits…IBM Case Study
Improved
Field
Quality
An IBM Project
Case Study
Reduction
in
Problems
Automation
is Key
Full-year sales
goal reached
on first day
See Data
Costs and Benefits…Savings and Revenue
Another IBM Project Case Study – Small IBM Product
Actual
Expected
32 field defects
168 field
defects
57 trouble tickets
1056 trouble
tickets
Savings = $2.576 mil
Overall Revenue
Targets Far Exceeded
Increased Revenues.
What else?
Costs and Benefits…Cycle Time
Time Boxed Iterations:
Improves estimation
accuracy
by reducing estimation
miscalculations
lowers risk projects slip
release dates
Measurement: With Agile, worst case is 2-4
weeks of wasted work instead of an entire release
Costs and Benefits…Team Adoption
Analysis of “to what degree” a recent IBM software team practiced Agile
EARLY….
LATE….
Less Time Lost
going down wrong path
Costs and Benefits…Training
Benefit
Cost:
Learning curve
Learning
Gain
Target
Costs and Benefits…Lean
Less Waste:
Features not
desired or needed
NOT developed
Close connection between customer and the project
team leads to better cash
flow.
Costs and Benefits…Lean
One Size Does Not Fit All
Costs and Benefits…Quality
Fewer Defects:
The result should be higher
quality, resulting in fewer
defects, that will increase the
overall production rate of the
whole system.
Data from a mid-size IBM project:
“Development is more productive now since Agile
and that savings can be estimated at 25% ”
- IBM Development Manager
Costs and Benefits…Quality
Technical Debt:
Less time
regression testing
Defect Backlogs as Indicators of Agility
Real IBM Projects:
Costs and Benefits…Moral Hazards
Is it wise to
eliminate or
relocate the
System Test
Group?
Costs and Benefits…IBM Perspective
Feedback from IBM Development Mgr over the past 2 releases (pre-and post Agile)
KLOC
(total volume
of software
delivered)
Used DEF
(Deployment
Evaluation
Framework)
Employee
Satisfaction Poll
(pride of
craftsmanship)
How did this IBM
team
measure their
Agile progress?
Defect
Trends
(tracking
arrival rates
over time)
Costs and Benefits…IBM Perspective
Feedback from IBM Development Manager:
Bullpen
Vision
Use Cases
Automated Unit Tests
Scrum meeting
Iterative
Non Solo
Reflections
0
2
4
6
8
10
Costs and Benefits…What to Look At
How do you show
your adoption of Agile
was worthwhile?
Look at things such as:
• Volume of Software
• Quality of Software
• Job Satisfaction
See Data
How Agile
Increases Income
How Agile Increases Income
Capacity Improvements in brands from 2004
Tivoli products*
AIM HC/product
Tivoli HC/product
Products & HC/Product
AIM products*
2003
2004
2005
2006
2007
Source: SWG Finance HC, and CH and Tivoli product data
How Agile Increases Income
E2 Activities have improved SWG Capacity (HC per GAed prod.)
Capacity
SWG Average
80
Hc / Product GA
75
75
74
70
68
65
64
60
58
55
50
2003
2004
2005
2006
2007
Source: SWG Finance, HC, (J. Birdsall) and CH for all brand products GAed
How Agile Increases Income
E2 Activities have steadily increased SWG Productivity
Revenue by headcount
Effectiveness $$ per HC
Comment: Will look at $$/HC for different product categories (mature, emerging, growth)
$K / HC
900
700
SWG Average
500
2003
2004
2005
2006
2007
Source: SWG Finance, Rev, HC, (J. Birdsall)
How Agile Increases Income
So why does this happen?
Features and functions used in a typical system
Often or always
Used: 20%
Sometimes
16%
Often
13%
Rarely
19%
Never
45%
Always
7%
Rarely or never
used: 64%
Standish Group Study Reported at XP2002 by Jim Johnson, Chairman
User Centered Decisions
have more economic impact
than
Implementation Decisions
Agile
How Agile Helps Increase Income…
Defects found early when cheaper to fix
Classic
Defects found late when expensive to fix
How Agile Helps Increase Income…
Agile not only
saves money,
but drives
revenue as
well
Backlog:
Release
Release
Release
(Prioritized List of
Features/Work Items)
• You have proven to me that Agile is worth doing.
Instead of the scaling slides, how about talking
about how you did it and when you saw the benefits
arrive? In other words, how long did you wait and
how much did it cost? In general terms.
XP Technical Practices: What Scales?
Original 12 Practices
Small Releases
Refactoring
Testing / Test-driven Development
Pair Programming
Sustainable Pace / 40-hour Week
Team Code Ownership
Coding Standards/Conventions
Simple Design
Metaphor (e.g., chalkboard app)
Planning Game
Continuous Integration / Build
On-site Customer
Additional Practices
Story Cards
Prototype UIs and UI navigation
Stand-Up Meetings
Workspace Environment
Iteration Completeness
Architectural Spike
Automation
XP Technical Practices: What Scales?
Original 12 Practices
Small Releases
Refactoring
Testing / Test-driven Development
Pair Programming
Sustainable Pace / 40-hour Week
Team Code Ownership
Coding Standards/Conventions
Simple Design
Metaphor (e.g., chalkboard app)
Planning Game
Continuous Integration / Build
On-site Customer
Additional Practices
Story Cards
Prototype UIs and UI navigation
Stand-Up Meetings
Workspace Environment
Iteration Completeness
Architectural Spike
Automation
Lean Principles (1): What Scales?
1.
•
•
•
Eliminate Waste
Extra Features
Churn
Crossing Boundaries
2.
•
•
•
Build Quality In
Mistake-Proof Code with Test-Driven Development
Stop Building Legacy Code
The Big Bang is Obsolete
3.
•
•
•
Create Knowledge
Use the Scientific Method
Standards Exist to Be Challenged and Improved
Predictable Performance is Driven by Feedback
Mary and Tom Poppendieck, Implementing Lean Software Development (Upper Saddle River, NJ : Addison-Wesley, 2007)
Lean Principles (1): What Scales?
1.
•
•
•
Eliminate Waste
Extra Features
Churn
Crossing Boundaries
2.
•
•
•
Build Quality In
Mistake-Proof Code with Test-Driven Development
Stop Building Legacy Code
The Big Bang is Obsolete
3.
•
•
•
Create Knowledge
Use the Scientific Method
Standards Exist to Be Challenged and Improved
Predictable Performance is Driven by Feedback
Mary and Tom Poppendieck, Implementing Lean Software Development (Upper Saddle River, NJ : Addison-Wesley, 2007)
Lean Principles (2): What Scales?
4.
•
•
•
Defer Commitment
Break Dependencies
Maintain Options
Schedule Irreversible Decisions at the Last Possible
Moment
5. Deliver Fast
• Rapid Delivery, High Quality, and Low Cost Are Fully
Compatible
• Queuing Theory Applies to Development, Not Just Servers
• Limit Work to Capacity
Mary and Tom Poppendieck, Implementing Lean Software Development (Upper Saddle River, NJ : Addison-Wesley, 2007)
Lean Principles (2): What Scales?
4.
•
•
•
Defer Commitment
Break Dependencies
Maintain Options
Schedule Irreversible Decisions at the Last Possible Moment
5. Deliver Fast
• Rapid Delivery, High Quality, and Low Cost Are Fully
Compatible
• Queuing Theory Applies to Development, Not Just Servers
• Limit Work to Capacity
Mary and Tom Poppendieck, Implementing Lean Software Development (Upper Saddle River, NJ : Addison-Wesley, 2007)
Lean Principles (3): What Scales?
6. Respect People
• Teams Thrive on Pride, Commitment, Trust, and Applause
• Provide Effective Leadership
• Respect Partners
7. Optimize the Whole
• Focus on the Entire Value Stream
• Deliver a Complete Product
• Measure UP
Mary and Tom Poppendieck, Implementing Lean Software Development (Upper Saddle River, NJ : Addison-Wesley, 2007)
Lean Principles (3): What Scales?
6. Respect People
• Teams Thrive on Pride, Commitment, Trust, and Applause
• Provide Effective Leadership
• Respect Partners
7. Optimize the Whole
• Focus on the Entire Value Stream
• Deliver a Complete Product
• Measure UP
Mary and Tom Poppendieck, Implementing Lean Software Development (Upper Saddle River, NJ : Addison-Wesley, 2007)
Lean Tools: What Scales?
1. Eliminate Waste
• Seeing Waste
• Value Stream Mapping
2. Amplify Learning
• Feedback
• Iterations
• Synchronization
• Set-based Development
3. Decide as Late as Possible
• Options Thinking
• The Last Responsible
Moment
• Making Decisions
4. Deliver as Fast as Possible
• Pull Systems
• Queuing Theory
• Cost of Delay
5. Empower the Team
• Self-Determination
• Motivation
• Leadership
• Expertise
6. Build Integrity In
• Perceived Integrity
• Conceptual Integrity
• Refactoring
• Testing
7. See the Whole
• Measurements
• Contracts
Mary and Tom Poppendieck, Lean Software Development (Upper Saddle River, NJ : Addison-Wesley, 2003)
Lean Tools: What Scales?
1. Eliminate Waste
• Seeing Waste
• Value Stream Mapping
2. Amplify Learning
• Feedback
• Iterations
• Synchronization
• Set-based Development
3. Decide as Late as Possible
• Options Thinking
• The Last Responsible
Moment
• Making Decisions
4. Deliver as Fast as Possible
• Pull Systems
• Queuing Theory
• Cost of Delay
5. Empower the Team
• Self-Determination
• Motivation
• Leadership
• Expertise
6. Build Integrity In
• Perceived Integrity
• Conceptual Integrity
• Refactoring
• Testing
7. See the Whole
• Measurements
• Contracts
Mary and Tom Poppendieck, Lean Software Development (Upper Saddle River, NJ : Addison-Wesley, 2003)
Conclusions
>1,100
registered at
Agile @ IBM
> 5,000
people
trained in
Agile
>220
Commercial
Software
Projects
Numerous
Business
Implications
Where is IBM
relative to Agile?
Agile Economy: Cost and Benefits ….
Breakeven earlier
• Improved estimates in iterations
(better cost estimates)
• Less time going down wrong path
(shorter time to delivery)
• Features not needed not developed
• Less time regression testing
• Bugs found earlier when easier to fix
• Saves money and drives revenue
•
Compelling evidence
that Agile has potential
for a positive return on investment
Conclusions
Humility is warranted. We say “potential” benefits
because success depends on:
How well and how long teams adopt Agile
Management decisions and support
...And we view our findings as preliminary.
Critical: Make software technical decisions in a business context.
Everyone asks: “Can I prove that this will help our key stakeholders?”
Sue McKinney
[email protected]
Ted Rivera
[email protected]