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

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November 2018

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you?

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Define

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A Journey
More than Scrum
Not just one team
IT and Business
Culture Change

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

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Why

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project

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Determine the key factors of the project Describe the issue or

pportunity

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Obtain and create project estimates

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Model your estimates

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Common Benefits of Agile

Drive Project Performance Accelerate Time to Market Create Happier Employees Improve Product Quality

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1 1

Waterfall

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Agile (6 Months)

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Time to Market

Reduce TTM and start generating revenue sooner

1. http://qsma.com/the-agile-impact/

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1 1

Waterfall

2

Agile (6 Months)

2 3 3

Time to Market

Reduce TTM and start generating revenue sooner

1. http://qsma.com/the-agile-impact/

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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

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Costly Defects

$440M1

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

$145M2 $150M3

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Project Performance

Agile projects are significantly more likely to be successful 42% 26% 50% 53% 8% 21% 1 2

Project Success Rates: Agile vs. Waterfall1

Series1 Series2 Series3

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

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Happier Employees

Employees love Agile; adoption can reduce churn

Happy employees stick around. Turnover is

expensive. So is

disengagement. Winning is fun. Success feels good.

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

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1 1/5th of the resources used for development are retained for ongoing maintenance 2 1/10th of the number of defects found during development are found during 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 6 No materials, travel, tax, or other expenses outside of development,labor 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

Assumptions

SLIDE 25 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

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$
$
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$
$
$
$
$
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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 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 $

$
$
$
$

Monthly turnover expense 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $ 2,467 $

$
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$
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Monthly build defects 9 9 9 9 9 9 9 9 9 9

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$
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Cost per build defect 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $

$
$
$
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Total labor costs 263,217 $ 263,217 $ 263,217 $ 263,217 $ 263,217 $ 263,217 $ 263,217 $ 263,217 $ 263,217 $ 263,217 $

$
$
$
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Maintenance Opex 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 $ Number of resources in production

1.40

1.40 1.40 1.40 Monthly turnover expense

$
$
$
$
$
$
$
$
$
$

164 $ 164 $ 169 $ 169 $ Monthly production defects

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1 1 1 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 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 21,092 $ 21,092 $ 22,313 $ 22,313 $ 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) $ Capex Infrastructure spending

New development expense (software)
New development expense (processes)
Total capex
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 $ 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

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$
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$
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$
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116,667 $ 116,667 $ Labor Opex Number of resources in build 21 21 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 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 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 $

$
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Monthly turnover expense 3,700 $ 3,700 $ 3,700 $ 3,700 $ 3,700 $ 3,700 $ 3,700 $ 3,700 $ 3,700 $ 3,700 $ 3,700 $ 3,700 $

$
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Monthly build defects 25 25 25 25 25 25 25 25 25 25 25 25

$
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Cost per build defect 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $

$
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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 $

$
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Maintenance Opex 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 $ Number of resources in production

1.40

1.40 Monthly turnover expense

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254 $ 254 $ Monthly production defects

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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 $ 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 $

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What’s next?

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Will Davis

Email: Will.Davis@slalom.com Linkedin: https://www.linkedin.com/in/willhdavis/

Joe Poblocki

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

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Our Services

We help companies solve business problems and build for the future. Strategy &

perations

Technology enablement Experience design Customer engagement Organizational effectiveness Data & Analytics Delivery leadership

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We put people first.

We believe in a world in which every person loves their work and life.