a minute of our time or what we need to unlearn about software contracting
TRANSCRIPT
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A Minute of Our Timeor
What we need to unlearn about software contracting
Antti Kirjavainen (@anttiki)
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Photo by ToniVC, CC-lisensed (non-commercial, sharealike, attribution)
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BSOD by Martin Deutsch
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SOFTWARE CONTRACTINGMajor contributor to this is the way we do
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FAIL #1
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FAIL #2
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FAIL #2
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FAIL #3
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THE DYSFUNCTIONAL DYNAMICS
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Needs
Contractor Customer
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Risk Mitigation
Contractor• Doing work that customer
does not want to pay for• Employing people who do not
produce income
Customer• Get fair contribution in
exchange of payment
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The Man-Hour
• De-facto industry standard• Smallest unit of work • Value can be evaluated• Billable or not billable
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Contractor
billable man-hours
ratio of billable and unbillable man-hours on an individual basis
unbillable man-hours
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Customer
definition of valuable (=billable) man-hours
billed man-hours
price of man-hours
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Alert
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Actual Dynamics
billable man-hours definition of valuable (=billable) man-hours
ratio of billable and unbillable man-hours on an individual basis
unbillable man-hours
billed man-hoursprice of man-hour
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Actual Dynamics
billable man-hours
definition of valuable (=billable) man-hours
Do only work everyone agrees onexperiments
analysis paralysis
missed opportunities
motivation
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Handcuffs by Mark Zwolanek
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Actual Dynamics
billable man-hours
billed man-hours
Competition, conflict
motivation trust
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Actual Dynamics
price of man-hour
Let’s compete with unit
price!
quality of work
work units (=people) are
the same favor cheaper
labor
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Actual Dynamics
unbillable man-hours
opportunities to improve
Ability to attract and satisfy customers
Possibility to correct failure
situations
growing competences
developing business model(s)
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Actual Dynamics
billable man-hours definition of valuable (=billable) man-hours
ratio of billable and unbillable man-hours on an individual basis
unbillable man-hours
billed man-hoursprice of man-hour
Valuable contributions to the customer?
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Impacts of focusing on billable man-hours
• De-motivation of people• Losing trust• Losing competitiveness• Losing focus on
producing valuable contributions to the customer
• Missed opportunities• Losing trust• Getting low quality work• Losing focus on
getting valuable contributions in exchange for pay
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WAYS TO MAKE IT BETTER
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Option 1. #NoContracting ?!
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Option 2. First Build Trust
1. Build trust relationship with the customer2. Start contracting for the customer3. ???4. Profit
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Option 2. First Build Trust
1. Build trust relationship with the customer2. Start contracting for the customer3. ???4. Profit
How to be (or appear to be?!) trustworthy
before working together?
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Option 3. What is the smallest potentially valuable unit of
work?
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Actual Dynamics
billable man-hours
definition of valuable (=billable) man-hours
Do only work everyone agrees onexperiments
analysis paralysis
missed opportunities
motivation
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Handcuffs by Mark Zwolanek
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Option 3. TeamSmallest Value-Producing Unit
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Option 3. TeamAnd smallest potentially valuable units of
work Outcome Time
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Option 3. Smallest potentially valuable units of work
Outcome Time
Sprint
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Outcome Time
Sprint
Potentially shippable product
increment
Option 3. Smallest potentially valuable units of work
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Option 3. Smallest potentially valuable units of work
Outcome Time
SprintMinimal Marketable
Feature (MMF)
Potentially shippable product
increment
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Handcuffs by Mark Zwolanek
![Page 39: A Minute of Our Time or What We Need to Unlearn About Software Contracting](https://reader037.vdocuments.mx/reader037/viewer/2022102323/543d66378d7f72ee598b52f6/html5/thumbnails/39.jpg)
Option 4. What should we offer to the customer?
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Actual Dynamics
price of man-hour
Let’s compete with unit
price!
quality of work
work units (=people) are
the same favor cheaper
labor
![Page 41: A Minute of Our Time or What We Need to Unlearn About Software Contracting](https://reader037.vdocuments.mx/reader037/viewer/2022102323/543d66378d7f72ee598b52f6/html5/thumbnails/41.jpg)
Option 4. How to focus on valuable contributions for
customers?
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What is your unique value proposition?
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Option 4b. Compensation tied to actual valuable contribution for
customer?
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Profit Sharing
• Works best for developing commercial products and services
• Customer and contractor partner up• Parties agree on profit sharing
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”No Cure No Pay” by Tom & Kai Gilb
• Fixed Price• Payment only if Value Definition is met• Validated e.g. by trial use • Value Definition done with EVO method• Allows definition of desired impact of the software
• http://www.gilb.com/dl38
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What is your unique value proposition?
We Need New SW Contracting Business Models!
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CONCLUSIONS
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Photo by ToniVC, CC-lisensed (non-commercial, sharealike, attribution)
![Page 49: A Minute of Our Time or What We Need to Unlearn About Software Contracting](https://reader037.vdocuments.mx/reader037/viewer/2022102323/543d66378d7f72ee598b52f6/html5/thumbnails/49.jpg)
BSOD by Martin Deutsch, CC-lisensed (non-commercial, sharealike, attribution)
![Page 50: A Minute of Our Time or What We Need to Unlearn About Software Contracting](https://reader037.vdocuments.mx/reader037/viewer/2022102323/543d66378d7f72ee598b52f6/html5/thumbnails/50.jpg)
SOFTWARE CONTRACTINGMajor contributor to this is the way we do
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The Man-Hour
• De-facto industry standard• Smallest unit of work • Value can be evaluated• Billable or not billable
![Page 52: A Minute of Our Time or What We Need to Unlearn About Software Contracting](https://reader037.vdocuments.mx/reader037/viewer/2022102323/543d66378d7f72ee598b52f6/html5/thumbnails/52.jpg)
Impacts of focusing on billable man-hours
• De-motivation of people• Losing trust• Losing competitiveness• Losing focus on
producing valuable contributions to the customer
• Missed opportunities• Losing trust• Getting low quality work• Losing focus on
getting valuable contributions in exchange for pay
![Page 53: A Minute of Our Time or What We Need to Unlearn About Software Contracting](https://reader037.vdocuments.mx/reader037/viewer/2022102323/543d66378d7f72ee598b52f6/html5/thumbnails/53.jpg)
Smallest potentially valuable units of work
Outcome Time
SprintMinimal Marketable
Feature (MMF)
Potentially shippable product
increment
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Compensation tied to actual valuable contribution for
customer?
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What is your unique value proposition?
We Need New SW Contracting Business Models!
![Page 56: A Minute of Our Time or What We Need to Unlearn About Software Contracting](https://reader037.vdocuments.mx/reader037/viewer/2022102323/543d66378d7f72ee598b52f6/html5/thumbnails/56.jpg)
THANK YOU!
Antti KirjavainenTwitter: @anttikiEmail: [email protected]: http://www.slideshare.net/anttikirjavainen