November 2018 you? Define 4 A Journey More than - PowerPoint PPT Presentation

November 2018

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you?

Define

4 • A Journey • More than Scrum 3 • Not just one team • IT and Business • Culture Change 2 1 6

A justification for a proposed project on the basis of its expected commercial benefit. $

Why

project

Describe the issue or Determine the key 1 2 opportunity factors of the project Obtain and create 3 4 Model your estimates project estimates

Common Benefits of Agile Accelerate Improve Create Drive Time to Product Happier Project Market Quality Employees Performance

1 2 Time to 3 Market Reduce TTM and start generating revenue sooner 3 1 2 Agile (6 Months) Waterfall 1. http://qsma.com/the-agile-impact/

1 2 Time to 3 Market Reduce TTM and start generating revenue sooner 3 1 2 Agile (6 Months) Waterfall 1. http://qsma.com/the-agile-impact/

Product Quality Ongoing costs to support software can be significant, reduction of defects lowers those costs 1. CA Technologies: https://www.ca.com/content/dam/ca/us/files/white-paper/the- impact-of-agile-quantified.pdf

Costly Defects $150M 3 $145M 2 $440M 1 1. https://en.wikipedia.org/wiki/Knight_Capital_Group 2. https://en.wikipedia.org/wiki/Mariner_1 3. https://en.wikipedia.org/wiki/Lockheed_Martin_F-22_Raptor

Project Success Rates: Agile vs. Waterfall 1 Series1 Series2 Series3 2 26% 53% 21% Project Performance Agile projects are 1 42% 50% 8% significantly more likely to be successful 1. https://vitalitychicago.com/blog/agile-projects-are-more-successful-traditional-projects/ 2. http://www.ambysoft.com/surveys/success2018.html 3. https://www.pwc.com/gx/en/actuarial-insurance-services/assets/agile-project-delivery-confidence.pdf 4. https://www.degruyter.com/downloadpdf/j/fman.2017.9.issue-1/fman-2017-0021/fman-2017-0021.pdf

Happier Employees Turnover is Winning is fun. Happy employees Employees love Agile; expensive. So is stick around. Success feels adoption can reduce disengagement. good. churn 1. https://www.americanprogress.org/wp-content/uploads/2012/11/CostofTurnover.pdf 2. https://www.gallup.com/workplace/238085/state-american-workplace-report-2017.aspx 3. Journal of Applied Psychology96(6):1305-16 · July 2011

Assumptions 1/5th of the resources used for development are retained for ongoing 1 maintenance 1/10th of the number of defects found during development are found during 2 production 3 We are assuming 5-year projects 4 The sponsor company is responsible for a 3% annual COLA 5 No development is capitalized; all is Opex No materials, travel, tax, or other expenses outside of development,labor 6 and maintenance are considered 7 Agile projects have 80% the Time to Market that Waterfall projects do 8 Annual team turnover is 1.5x as likely for Waterfall projects 9 We are using a 12% discount rate 10 A project team contains 7 resources 11 We are assuming 2-team projects 12 Avg team member cost is $148,000

COLA 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 103% 103% Month 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Gross Revenue Total revenues $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 83,333 $ 83,333 $ 116,667 $ 116,667 Labor Opex Number of resources in build 21 21 21 21 21 21 21 21 21 21 - - - - Resource monthly pay $ 12,333 $ 12,333 $ 12,333 $ 12,333 $ 12,333 $ 12,333 $ 12,333 $ 12,333 $ 12,333 $ 12,333 $ 12,333 $ 12,333 $ 12,703 $ 12,703 Expected monthly turnover 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0.08 0 0 0 0 Monthly turnover costs per resource $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ - $ - $ - $ - COLA 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 103% 103% Monthly turnover expense $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ - $ - $ - $ - Monthly build defects Month 9 1 9 2 9 3 9 4 9 5 9 6 9 7 9 8 9 9 9 $ - 10 $ - 11 $ - 12 $ - 13 14 Cost per build defect $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ - $ - $ - $ - Gross Revenue Total labor costs $ 263,217 $ 263,217 $ 263,217 $ 263,217 $ 263,217 $ 263,217 $ 263,217 $ 263,217 $ 263,217 $ 263,217 $ - $ - $ - $ - Total revenues $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 116,667 $ 116,667 Maintenance Opex Software licencing fees Labor Opex $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 Number of resources in build 21 21 21 21 21 21 21 21 21 21 21 21 - - Number of resources in production - - - - - - - - - - 1.40 1.40 1.40 1.40 Resource monthly pay $ 12,333 $ 12,333 $ 12,333 $ 12,333 $ 12,333 $ 12,333 $ 12,333 $ 12,333 $ 12,333 $ 12,333 $ 12,333 $ 12,333 $ 12,703 $ 12,703 Monthly turnover expense $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 164 $ 164 $ 169 $ 169 Expected monthly turnover 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0 0 Monthly production defects - - - - - - - - - - 1 1 1 1 Monthly turnover costs per resource $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ - $ - Cost per production defect $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 Total maintenance expense Monthly turnover expense $ 1,200 $ $ 3,700 1,200 $ $ 3,700 1,200 $ $ 3,700 1,200 $ $ 3,700 1,200 $ $ 3,700 1,200 $ $ 3,700 1,200 $ $ 3,700 1,200 $ $ 3,700 1,200 $ $ 3,700 1,200 $ $ 21,092 3,700 $ $ 21,092 3,700 $ $ 3,700 22,313 $ $ 22,313 - $ - Monthly build defects 25 25 25 25 25 25 25 25 25 25 25 25 $ - $ - Cost per build defect $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ - $ - Total Opex $ (264,417) $ (264,417) $ (264,417) $ (264,417) $ (264,417) $ (264,417) $ (264,417) $ (264,417) $ (264,417) $ (264,417) $ (21,092) $ (21,092) $ (22,313) $ (22,313) Total labor costs $ 267,700 $ 267,700 $ 267,700 $ 267,700 $ 267,700 $ 267,700 $ 267,700 $ 267,700 $ 267,700 $ 267,700 $ 267,700 $ 267,700 $ - $ - Capex Maintenance Opex Infrastructure spending - - - - - - - - - - - - - - Software licencing fees $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 New development expense (software) - - - - - - - - - - - - - - Number of resources in production - - - - - - - - - - - - 1.40 1.40 New development expense (processes) - - - - - - - - - - - - - - Monthly turnover expense $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 254 $ 254 Total capex - - - - - - - - - - - - - - Monthly production defects - - - - - - - - - - - - 3 3 Cost per production defect $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 Cash Flow $ (264,417) $ (264,417) $ (264,417) $ (264,417) $ (264,417) $ (264,417) $ (264,417) $ (264,417) $ (264,417) $ (264,417) $ 62,242 $ 62,242 $ 94,354 $ 94,354 Total maintenance expense $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 27,272 $ 27,272 Total Opex $ (268,900) $ (268,900) $ (268,900) $ (268,900) $ (268,900) $ (268,900) $ (268,900) $ (268,900) $ (268,900) $ (268,900) $ (268,900) $ (268,900) $ (27,272) $ (27,272) Capex Infrastructure spending - - - - - - - - - - - - - - New development expense (software) - - - - - - - - - - - - - - New development expense (processes) - - - - - - - - - - - - - - Total capex - - - - - - - - - - - - - - Cash Flow $ (268,900) $ (268,900) $ (268,900) $ (268,900) $ (268,900) $ (268,900) $ (268,900) $ (268,900) $ (268,900) $ (268,900) $ (268,900) $ (268,900) $ 89,394 $ 89,394

What’s next?

Will Davis Joe Poblocki Email: Email: Will.Davis@slalom.com Joe.Poblocki@slalom.com Linkedin: Linkedin: https://www.linkedin.com/in/willhdavis/ https://www.linkedin.com/in/joseph-poblocki/

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