About half way through the financial year, funding was suddenly available for a corporate project. Unfortunately, the normal process time for procurement and legal to engage a vendor was 3-6 months. How could it reduce its lead time to support the outcome in a timely way?
Much of the time finance typically spent in procuring vendors was bound up in defining what would go into the contract – the detailed specifications of the deliverables – and then engaging with the legal department to finalise the contractual arrangements of the vendor before signing.
ZXM understood that:
ZXm recognise that a new procurement and contractual framework was needed, one that would:
ZXM recognised that the organisation used agile to deliver and support many of its IT products and felt their familiarity with Scrum could be leveraged.
A new contractual framework was written around Scrum’s events, artefacts and roles. This detailed how the organisation and the vendor would collaborate to deliver the outcome without needing to be explicit as to the detail of the requirements.
ZXM brought project management, procurement and legal together with the business area and IT leadership in a Daily Scrum to assess progress toward defining the contract and impediments that were slowing things down.
We set goals each week, planned them and then reviewed the outcome at the end of the Sprint. This gave the team the following benefits:
The contract specified the wider scope and vision of the project, and used the Product Backlog as the backbone of the project with explicit statements that this would evolve over time. Sprint Planning and Sprint Goals formed the mechanism to produce a Statement of Work each Sprint. This was signed-off by the organisation’s Product Owner as representing value and the Development Team would then start delivering.
This turned each Sprint into a small contract with the focus on an outcome and Goal within a fixed timeframe (2-weeks). Throughout the Sprint, the vendor was expected to refine the items in the Product Backlog so that they were ready to be delivered in the following Sprint.
The Definition of Done provided a contracted level of quality from the vendor, outlining what documentation was needed each Sprint, what kinds of testing was required, architectural standards to adhere to, non-functional requirements including accessibility and usability, and what level of defects were acceptable. Annexes to the contract provided specific detail regarding defect definition
In terms of responding to the tender, a cost per Sprint was requested with an outline of the people, their skills and capability, brought to the Development Team. People responding to the tender were asked to use specification by example as the basis for their costing and time forecasts. That is, vendors were asked to compare the outcomes the organisation sought to previous projects the vendor had delivered in the past.
The initial forecast of 3 months to engage a vendor was reduced to 3 weeks. This left over 5 months for the vendor to deliver the outcome.
Scrum as a contract supported delivery as intended – providing a robust, lightweight, and repeatable framework that reinforced the need for continuous improvement, iterative planning and risk management, transparency and collaboration.
Delivered the intended outcome in 3 weeks, not 3 months.
Less time spent waiting for others to approve and sign-off and lowering the overhead of requirements specification for the contract.
The lower overhead of the contract, and its reduced specificity, enabled the contract to be used more widely.
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