scrum and the world crisis

and the World Crisis

Rafael Sabbagh

Marcos Garrido

ScrumWhy Scrum is the best choice for

projects in times of crisis

2http://scrumability.net

Speakers

• Rafael Sabbagh• Certified ScrumMaster (CSM)• Seven years of experience in IT Project Management and

Development Team Leadership• Computer Engineer - PUC-Rio• Master Student in Administration - PUC-Rio• MBA - PUC-Rio

• Marcos Garrido• Certified Scrum Product Owner (CSPO)• Six years of experience in IT Project Management and

Development Team Leadership • Information Technologist - PUC-Rio• Master Student in Administration - PUC-Rio• MBA - PUC-Rio

Part I

The Crisis

The world faces a crisis...USA banks cut credit, despite of help

ADDICTED TO RISK

...and the crisis is severe!

• “It’s the worst crisis since 1929!”International Monetary Fund (IMF)

• “The developed countries will face a generalized recession.”Pamela Cox, vice-President of World Bank LatAm/Caribbean

• “It’s a really, really serious situation!”Henrique Meireles, President of Central Bank of Brazil

• “The crisis brings into question the very future of mankind!”Nicolas Sarkosy, President of France

...and the crisis is severe!

Who believes the worst of the crisis is gone?

…and who believes the worst is still to come?

The recovery will be difficult...

04/17/2009 –Brazil’s Valor Econômico Journal

•IMF: the world economy will take longer to beat recession than previously expected and recovery will be slower than is previous crisis

•The global extesion of the crisis contributes to extend the recession

•Emerging countries will suffer massive net capital outflows in the next years

04/22 and 04/23/2009 – Brazil’s Valor Econômico Journal

•IMF: Brazilian economy will shrink 1,3% in 2009

•IMF: World economy will shrink 1,3% in 2009 and may grow again in 2010

IMF: The Crisis will be long lasting and recovery will be slow

And technlogy area suffers...

US$ 2.5bi losses

3.9 thousand job cuts

10% jobs cut

Stocks plunge

90% profit drop

3,000 job cuts

80% drop in sales

And technlogy area suffers...

US$ 2.5bi losses

3.9 thousand job cuts

10% jobs cut

Stocks plunge

90% profit drop

3,000 job cuts

80% drop in sales

Dismissal and profit drop

...as investment diminishes.

Global technology spending to drop nearly 4% in 2009

According to Gartner, worldwide companies are cutting their budget. Investment in hardware will drop 15%, while investment in software will increase 0.5%, as software may help companies save money.

Associated Press, 04/01/2009

Forrester: worldwide technology spending to drop 3% this year

According to Forrester, worldwide spending in IT products and services may drop 3% compared to 2008. Investment in software may remain stable, while expenses with communication equipment, hardware and IT services will drop this year.

IDG News Service/EUA, 01.14.2009

remain stable, while expenses with communication equipment, hardware and IT services will drop this year.

The new reality is hard!

• Demand for projects shrinking

• Longer decision process

• Limited access to credit

• Margin pressure

• Financial problems with most clients

• Environment of uncertainty

• Constant changes

• Resource rationalization

Part II

How to survive?

The market demands that organizations change the way they

work in order to survive these turbulent times.

A truePARADIGM BREAK

How to survive?

This new way of work shall:

Work well on rapidly changing environments, allowing frequent replanning

Focus on maximizing the client's ROI

Help reduce time-to-production or time-to-market

How to survive?

This new way of work shall:

Avoid effort/time waste with subproducts and features that will never be used

Always deliver value to the client, even if the project needs to be halted

increase the communication and feedback between the project's stakeholders, so people will know what needs to be done and what's being done

How to survive?

What framework for project development is focused on all

those issues?

How to survive?

Scrum is the best choice for projects in times of

crisis!

And the crisis is a great opportunity to spread

Scrum!

Part III

Use Scrum

Crisis characters...• An organization that provides service on projects must increase its competitiveness in order not to lose clients

• A director or manager needing to cut operational costs so that his organization may survive

• A client which needs to hire specific projects, internal or external ones, but needs to cut costs in order to keep them viable

Why should they choose Scrum?

NO waste!

Non-agile methodologies defend that a big amount of documents must be generated so that a project may succeed

Project Charter

Preliminary Scope

Statement

Project Management

Change Requests

Progress Report

Performance Report

Acceptance Report

Project Closure Report

Detailed Schedule

Earned Value Analysis

Lessons Learned

Document

Sequence Diagrams

Components Diagram

Collaboration Diagram

State Diagrams

Use Cases Diagram

Packages Diagram

Activities Diagram

...what else?

NO waste!

Non-agile methodologies defend that a big amount of documents must be generated so that a project may succeed

Project Charter

Preliminary Scope

Statement

Project Management

Change Requests

Progress Report

Performance Report

Acceptance Report

Detailed Schedule

Lessons Learned

Document

Sequence Diagrams

Components Diagram

State Diagrams

Use Cases Diagram

Packages Diagram

Activities Diagram

...what else?

Do the cost of production and maintenance of those documents pays?

How many of those documents will be kept current and how many will be

really useful for the project development?

NO waste!

About 50% of the time is spent on requisites, architecture and specifications

on typical projects

Requirement Analysis Implementation Tests Maintenance

all that is done before building any functionality!

Specification / Architecture

NO waste!

• 35% of requirements change

• 65% of functionalities are never or rarely used

About 50% of the time is spent on requisites, architecture and specifications

on typical projects

Requirement AnalysisSpecification / Architecture

Implementation Tests Maintenance

and gets worse...

NO waste!

In times of crisis, is such

waste of time and effort acceptable?

NO waste!

After all, the objective of a project is the product - not the documentation!

With Scrum, only the documentation strictly sufficient and necessary must be

utilized for the project

That is, adopt only what will be used.

NO waste!

On Scrum, the Product Backlog is dynamic, for it must keep up with the client’s needs, and those change on the course of the project.

Then, whatever is delivered, will be used by the client.

The functionalities that will be made are the ones of most importance for the client before the beginning of every sprint.

What if the project gets suspended?

In a non-agile project, what will the client get if the project gets suspended...

...here?

Inception Elaboration Construction Transition

...or here?

...or even here?

A project with Scrum works differently...

VALUE is delivered in every iteration!

A project with Scrum always produces an increment on the product which is potentially deliverable at the end of every sprint.

As such, if the project gets suspended at any moment, the client may utilize what has been generated on previous sprints, minimizing his risks.

In a non-agile project, chances are the client won’t be getting any return whatsoever on the investments made.

On an environment of uncertainties, minimizing the client’s risks becomes an important competitive

advantage.

Better value first!

With non-agile methodologies he only gets value at the end of

the project.

Source: IBM website

Release

Better value first!

With Scrum, the Product Owner must always update and reorder the Product Backlog, prioritizing the items with better value for the client.

Therefore, Scrum assures the items with better value gets delivered first, gerarating ROI frequently for the client.

Better value first!

• In times of crisis, organizations must stay competitives. The Product Backlog priorization by better value allows the organization to:

• deliver results to its clients faster than the other players

• put in production functionalities that add better value to their businesses more quickly

• launch products and new versions of them more frequently on the market

May changes come!

Big and frequent transformations happen at times of crisis

Changes in legislation and regulation

Changes in business rules

New business opportunities

Important players leave the market

Losses and unavailability of budget

Fusions/aquisitions and governmental interventions

May changes come!

How do traditional methodologies deal with changes?

Change is undesirable!

Change is risky!

Change is expensive!

Change must be

negotiated!

As almost all the planning is made at the beginning of the project, there’s very

little room for changes!

May changes come!

How do traditional methodologies deal with changes?

The limited scope contract will protect us! The client will want to change it all!

Every change must be negotiated with the client! Its impact must be quantified!

Every change must be revised, approved, planned, documented and managed!

May changes come!

Change Management is a source of stress on projects that use non-agile

methodologies.

Stress on the long-term relationship with the client.

Daily stress for the develompemt team.

May changes come!

How Scrum deals with change?

Scrum faces change as a natural part of the development process

Agile manifesto: “respond to changes over following a plan”

The Product Backlog is constantly updated by the Product Owner

May changes come!

How Scrum deals with change?

Changes can be introduced on the product by the following sprint!

Such quick response to change becomes a great competitive advantage…

...making it possible to turn a crisis into opportunities!

Those who don’t communicate...

On a typical waterfall project, when is the client encouraged to participate?

Implementation MaintenanceTests

The client perceives the project as a

big black box, which content will be revealed solely by the end of the process

On a typical waterfall project, when is the client encouraged to participate?

Acceptance Tests

Specification / Architecture

Implementation MaintenanceRequirement Analysis

Therefore, once the project is finished, the result will hardly fulfill the client’s needs at that moment!

How Scrum deals with communication?

The Product Owner is always in touch with client to identify his

needs…

…and keep the Product Backlog constantly updated and

prioritized...

The client frequently gets new versions…

... and can give feedback more quickly to the team through the

Product Owner.

That way, the client feels involved with the whole process...

...sharing the responsibility over the project with the team...

... increasingly trusting the team and the process itself.

The relationship with the client stops being merely commercial to become:

Partnership Complicity Satisfaction Fidelity

A long term relationship is then developed with the client, which can often

overcome strong periods of crisis.

Progress Report

Lessons Learned

Document

Sequence Diagrams

Component Diagram

Change Requests

Detailed Schedule

With non-agile methodologies, how is project’s visibility promoted its stakeholders?

State Diagrams

Mainly through documentation, which.....takes a

lot of work to be made

...is not efficient

...is hard to update

...ends up being

dismissed

Project Charter

Prelminary Scope

Statement

Project Management

Acceptance Report

Package Diagram

Performance Reports

Activity DiagramsUse Cases

Diagram

With Scrum, project’s visibility is constantly promoted!

Daily meetings

KanbanWorking at

the same environment

Client’s involvement

Burndown charts

Frequent releases

Review meeting

Retros-pective

...are some examples.

Keeping communications open between the project’s stakeholders is the best way to assure that everyone knows what needs to

be done and what’s being done.

That generates increase of productivity, which is essential to surviving the crisis.

Making the investment count

Unlike other methodologies, Scrum explicitly prioritizes the client’s return on investment (ROI).

One of the Product Owner’s main roles is to guarantee the client’s ROI, always aiming to maximize it by constantly updating the Product Backlog and prioritizing items with better value.

What if you have to cut down the team?

With waterfall, roles inside the projects are very well defined

What happens in waterfall projects?

On an IT project, for example, the programmer programs, the tester tests…

The crisis hit the organiztion and it’s necessary to dismiss or realocate members of the team!

If the designer leaves the project…...new windows will have no graphic design!

If the tester leaves the project...... it will go untested!

If the DBA leaves the project......who would take care of the database?

If the project manager leaves the project...... it will go ungoverned!

If the designer leaves the project…...new windows will have no graphic design!

If the tester leaves the project...... it will go untested!

If the DBA leaves the project......who would take care of the database?

Therefore, the whole project’s success is

menaced!

If the project manager leaves the project...... it will go ungoverned!

With Scrum, responsibility over delivery belongs to the whole team, no matter the roles

And what happens in projects with Scrum?

Although there is a natural specialization, people are stimulated to develop and utilize

their secondary abilities...

...and, in general, will do their best to compensate the lack of team members

With Scrum, responsibility over delivery belongs to the whole team, no matter the roles

And what happens in projects with Scrum?

Although there is a natural specialization, people are stimulated to develop and utilize

their secondary abilities...

...and, in general, will do their best to compensate the lack of team members

So, even with less capacity, the team can

keep delivering

Alert: dismissing team members must never be the first alternative

Shortening the team also diminishes its capacity to deliver value

Consequently, the client will be less pleased and will search for other suppliers...

...making the organization’s situation worse, creating a lose-lose vicious circle

Part IV

Conclusions

On this presentation, we showed that

Scrum is the best choice for projects in times of

crisis

Conclusions

We offer several arguments so that people can induce

others or decide to opt for Scrum in their organizations

Conclusions

Once the crisis is overcome, organizations that adopted Scrum will be closer to its

clients, focused on results, more compact, objective and

transparent.

Conclusions

To these organizations, the crisis will have worked like a propelling spring, so that when it’s time for the market to recover, these organizations will launch

first.

Part V

Bibliography

Contact us

http://www.scrumability.net

Rafael Sabbaghsabbagh@gmail.com

Marcos Garridomgarridobr@gmail.com

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