Agile in Fixed Price Fixed Scope projects - Hybrid Contracts

It is well known that the traditional methods are not yielding to a better success rate of a project and thus there is a tendency to lean on Agile Methodologies. At the same time, clients feel secure with Fixed Price and Fixed Scope project as their financial outlay is limited and there is no ambiguity. What they miss however in this process is the value delivery. The traditional project management methodologies focus on the Scope, Time and Resources where all three are constraints. Ideally the focus should be on the Value and Quality delivered, given the constraints there by guaranteeing a better success rate of the project.

The software vendors are doing business and they work to earn profits. As such, with Fixed Price projects, the vendors tend to limit their efforts to deliver the agreed scope. With the pace at which changes are happening around any business, freezing scope for a project early on is nearly impossible as software delivered to such scope frozen early on is often less usable. With change is the key driver in optimizing the value delivery, clients and vendors have conflicting views on the change.

Agile methodology has evolved over these years and offers a solution to the problem of optimized value delivery. However, clients still feel that Agile approach does not secure their interests in terms of a definite price and time. Of course, their concern is genuine as they cannot afford to sign a project contract where the cost and time are elastic. While the basic premise of Agile is to embrace the changes, to succeed, it depends on a very high level of trust between the vendors and the clients, where both should work for a common goal and the contract should be profitable to both.

Having said that the Fixed Price (FP) Fixed Scope (FS) contracts offer very limited opportunity for vendors to practice Agile methodology. Making either FP or FS elastic will give some room for practicing Agile methodology. Let us explore how this can be accomplished in the contracts. Both the above contracting models requires a high level of trust between both the vendors and the clients.

Fixed Price Elastic Scope (FPES) contract: In this model, while the price is fixed, the scope can be variable. This model can practice a hybrid Agile approach, the scope is broken down to features and the development happens feature by feature. Depending the time taken to implement a feature, more features are added or removed. For instance, if a feature estimated to take 30 days is implemented in 20 days, one or more new features can be added to fill the time saved. Similarly if the implementation takes 45 days, then one or more features will be removed.

To bring in incentive for both vendors and clients, a discount factor can be agreed upon, which is applied while adding or removing features. For instance, in a case where the vendor has saved 10 days for a feature, the client instead of adding a feature that needs 10 days to fill the gap, will only add a feature with 5 days of effort, where the discount factor would be 50%. The same discount factor is applied on the converse (where implementation exceeds the planned effort).

Elastic Price Fixed Scope (EPFS) contract: In this model, the Scope is fixed, but the pricing is variable. The idea behind this approach to is arrive at a base rate and a profit factor. While the base rate and the profit factor, along with the generic terms and conditions are covered in the Master Services Agreement, the actual project scope can be covered in multiple Statement of Works (SoW). Requirement elicitation and scoping can be the first SoW. This way, the project can be split into smaller working software modules and the work items can be scoped in stages / phases. This approach will help the clients in handling changes with ease.

Here again, an approach like 60:40:20 can be adopted to prioritize the work items. This approach requires the work items to be grouped into Must have features, Good to have features and Fixes. Every SoW can comprise of 60% of Must Haves, 40% of Good to haves and 20% of fixes emerged out of previous deliveries.

The incentives for both vendors and clients can be based on categorization of the work items as New feature, Clarification, Fixes. New features are the scope items as elaborated during elicitation. Clarifications are such items that emerge out of elicited requirements during the design or build phase. Fixes are incorrect implementations by the vendors, basically design and build defects. Costs for each SoW can be computed by applying the profit factor on the base rate. For instance, the New features will be charged at base rate + profit, clarifications will be charged at base rate and fixes will be charged at base rate - profit.

With the above, we are not concluding that Agile cannot be practiced in an FPFS project. There are still ways and means that a hybrid agile approach can be thought of and practiced so that value delivery is the primary focus for all the parties. Do share your thoughts in the form of comments on the subject, and I will cover those in my next blog.

Colocation - Key Considerations for Selection of Service Provider

Increasing number of organizations are shifting towards Colocating the data centers as they see the inherent benefits like efficiency, security and other shared managed services. Colocation is offered as a service based on the standards, policies, procedures, people and the data centre infrastructure. The user experience depends on the quality of each of these components that form part of the service. The type of provider also drives the end-user experience because you get what you pay for. Given the significant benefits of colocation, CIOs cannot just ignore this as an option, but need to look for reliable facilities that upholds the needs of the organization.

The benefits of going for colocation service include effective use of capital and having higher quality facilities through power redundancy, cooling, and scalability/growth. Choosing a colocation provider is a strategic business decision that evolves from thoughtful consideration certain key parameters. More over, the partnership with the colocation service provider need a multi-year commitment from both. Listed below are some of the key considerations that help the CIOs to make a well thought out decision on choosing the right provider. The list below however is in no order of priority.

Customer & Partner Considerations
Many tend to focus on the organization's IT needs and base the decision to colocate and the choice of the service provider on such internal design parameters. However, the CIOs also have to consider the strategies of their customers and partners . For instance, in case of highly interconnected and collaborative partner systems, the DR sites need to have connectivity with the DR sites of the partner systems as well. If the service goes down customers will easily become frustrated with the company, especially if they are in a new market and are not long-time clients.

Power and capacity planning
The power supply is a key component of the shared services that the colocation service provider offers. Needless to say that it is a vital that the data center is supported with a scalable and reliable power supply in order to keep up the infrastructure components. The supplier should focus on the future needs of the customers and perform proactive capacity planning so that they are prepared to support the scalability needs of the organizaiton.

Resiliency
Designing and building a reliable and resilient data center would call for heavy investment and smaller organizations would find it difficult to justify the RoI for such investments. However, colocation service offers this benefit as the provider would however will be sharing the cost with multiple service consumers. However careful evaluation of the design and architecture elements that will contribute towards ensuring reliability and resiliency of the service is essential in making a decision on the choice of service provider. A carefull review of the SLA of any colocation provider is also very important to ensure that the service provider assures commits for the current future investments to support this need.

Security and technical advancement
With colocation, the organization is leaving its servers, equipments and the more precious data assets in the custody of the service provider, which usually is outside the physical security boundary of the organization. Thus, physical security to the premises and the assets hosted there in is an important component of the colocation service and needs a careful consideration and evaluation. A comprehensive security, beyond the guard, ensuring data protection at all times is what is required. Additional factors of security involving evolving technologies like biometric, card readers, keypad or electronic locks as well as surveilance cameras should form part of the security investments.

Network connectivity and proximity
Like reliability and resiliency, network performance is a key customer service issue, not just a technology issue. An ineffective interconnect setup or limited network system can lead to disruptions in the business operations. It would also matter much to ascertain the network latency associated with connectivity with partner systems. In most cases, if there is a need to have heavy amount of data or information exchanged with a particular partner system, it would be beneficial to have the data center closer to that of the partner's so that the latency between such centers could be as much lower, leading to faster and efficient communication. Network performance issues can have a tangible financial impact to the bottom line. It is usual that the colocation providers offer diverse options for internet access and a careful selection of a primary and redundant internet service providers is essential. 

Technology & support
The colocation service provider should be implementing standard facility design elements and integrating proven technologies so that better power and cooling capacities is achieved. The provider should also have the demonstrated expertise in facilitating flexible deployment of higher density solutions in an on-demand model. Despite the colocation arrangement, the IT heads of the organization are still responsible in addressing the business needs and as such a careful evaluation of the standards and practices that the provider follows in keeping up with the technology and trends is very much essential.

While most providers offer on-site 24/7 technical support, the skill sets in the offer could vary. Again the organization may demand a specialized skill, which the service provider might not be able to support. As such, it is important to compare the skills needed vis-a-vis the skills on the offer and make appropriate decisions. Similarly, the maintenance windows of the service provider for certain support services could be different from that the organization would want. Thus this is another component that needs careful consideration.

Flexible commercial terms
While the key benefit of outsourcing is the shift from the capital investment to operational expenditure, CIOs might endup spending way higher unless a carefull evaluation of the commercials attached to each of the specific service or component that forms part of the colocation service. Ideal cloud service provider would let the customer to pick and choose the components and also offer multiple and flexible billing options to choose. A careful choice is required to ensure to optimize the value realization out of the colocation engagement.

Locational Constraints
Despite having on-site technical support, there would be emergencies needing experts to visit the data center to physically visit the location and work on solutions. As such, the geographical location of the data center(s) does matter to the organization and needs careful consideration. Similarly, local issues like frequent political unrests, frequency of natural disasters in the region, proximity to the airport, etc need to be considered. For instance if the data center is located in a flood prone area, there is a high risk of the data center services getting affected.

Regulatory Compliance
Various countries and states have legislations that could have an impact on the data or other assets that is being housed at the colocated data center.  For instance, UK and US have privacy and security legislations that have an impact on the way the information is stored, processed or disseminated. It is also beneficial to have an insider’s view and legal opinions where needed.  A provider located in a flood plain or an area prone to hurricanes creates unnecessary risk for the business.

Auditability
Given that most businesses are technology driven, the regulatory and legal needs warrant that the audit of systems and facilities and thus calling for appropriate arrangement with the provider to support this need. The  provider may be requested to share copy(ies) of a SAS 70, SOC 2 or such other audit report, which represents a third-party validation of internal process and controls.

Costs
Cost is also an equally important aspect to consider. However, many times, it may not make sense in just considering the cost and instead it should be considered in line with the tangible and intangible value that could be realized out of colocation. For instance, better network performance would benefit as there could be faster and increased acceptance of the systems by the customers and partners resulting in expanding the market. Similarly, better security services might protect the organization from potential liabilities that may arise in future on account of security breaches. Thus the lowest cost isn’t necessarily the best for the business. Lack of support, insufficient product lines or unreliable data center facilities can end up being very costly later on. 

Green IT
The power consumption of a data center is way higher than a regular office premise. Colocation by itself would contribute towards optimizing the energy consumption as it would be a consolidated specially built facility shared amongst many. However, it is worth exploring the measures that the provider has in place towards conserving energy. and such other green practices in place.

While the above considerations are generic, certain other considerations might be vital for some organizations depending on their business nature and priorities. This list can be further updated based on the feedback and comments from the readers.

Software Quality Attributes: Trade-off anaysis

We all know that the Software Quality is not just about meeting the Functional Requirements, but also about the extent of the software meeting a combination of quality attributes. Building a quality software will requires much attention to be paid to identifying and prioritizing the quality attributes and design &  build the software to adhere those. Again, going by the saying "you cannot manage what you cannot measure", it is also important to design the software with the ability to collect metrics around these quality attributes, so that the degree to which the end product satisfies the specific quality attribute can be measured and monitored.

It has always remained as a challenge for the software architects or designers in coming up with the right mix of the quality attributes with appropriate priority. This is further complicated as these attributes are highly interlinked as a higher priority on one would result in an adverse impact on another. Here is a sample matrix showing the inter-dependencies of some of the software quality metrics.

	Avail- ability	Effici- ency	Flexi- bility	Inte- grity	Inter-oper-ability	Main-tain-ability	Port-ability	Reli-ability	Reus-ability	Rob-ust-ness	Test-ability
Avail-ability								+		+
Effici- ency			-		-	-	-	-		-	-
Flexi- bility		-		-		+	+	+		+
Integrity		-			-				-		-
Inter-oper-ability		-	+	-			+
Maintai-nabilit	+	-	+					+			+
Port-ability		-	+		+	-			+		+
Reli- ability	+	-	+			+				+	+
Reus-ability		-	+	-				-			+
Robust-ness	+	-						+
Test-ability	+	-	+			+		+

While the '+' sign indicates positive impact, the '-' sign indicates negative impact. This is only an likely indication of the dependencies and in reality, this could be different. The important takeaway however is that there is a need for planning and prioritizing the quality attributes for every software being designed or built and the prioritization has to be accomplished keeping mind the inter-dependencies amongst the quality attributes. This would mean that there should be some trade-off made and the business and IT should be in agreement with these trade off decisions.

SEI's Architecture Trade-off Analysis Method (ATAM) provides a structured method to evaluate the trade off points. . The ATAM not only reveals how well an architecture satisfies particular quality goals (such as performance or modifiability), but it also provides insight into how those quality attributes interact with each other—how they trade off against each other. Such design decisions are critical; they have the most far-reaching consequences and are the most difficult to change after a system has been implemented.

A prerequisite of an evaluation is to have a statement of quality attribute requirements and a specification of the architecture with a clear articulation of the architectural design decisions. However, it is not uncommon for quality attribute requirement specifications and architecture renderings to be vague and ambiguous. Therefore, two of the major goals of ATAM are to

• elicit and refine a precise statement of the architecture’s driving quality attribute requirements 
• elicit and refine a precise statement of the architectural design decisions

Sensitivity points use the language of the attribute characterizations. So, when performing an ATAM, the attribute characterizations are used as a vehicle for suggesting questions and analyses that guide  towards potential sensitivity points. For example, the priority of a specific quality attribute might be a sensitivity point if it is a key property for achieving an important latency goal (a response) of the system. It is not uncommon for an architect to answer an elicitation question by saying: “we haven’t made that decision yet”. However, it is important to flag key decisions that have been made as well as key decisions that have not yet been made.

All sensitivity points and tradeoff points are candidate risks. By the end of the ATAM, all sensitivity points and tradeoff points should be categorized as either a risk or a non-risk. The risks/non-risks, sensitivity points, and tradeoffs are gathered together in three separate lists.