Adapting Kanban to Fixed Price Projects

Adapting Kanban

to

Fixed Size Projects

Implement WIP...

Visualization with a Board

What am I referring to as "Fixed price projects"?

• Map your value stream
• Show all work with different swim lanes

• Induce Flow
• Reduce multi-tasking to reduce waste and improve work quality

A few

basics

first...

Implement Pull

• They have been estimated, scheduled and planned in the presales stage
• Once you get the PO, you kick off the project with a defined scope, budget and timeline
• Further, the eco-system is not always fully agile:

• There is a need for:
• “Dynamic” resource capacity planning
• Budget tracking and monitoring
• Keeping the Stakeholders aware of whether the overall scope is on track to be delivered in the committed timeline

• To get Uniform Cadence
• Greater commitment from your team members

Sudipta Lahiri

Senior Vice President

Agile/Kanban Coach

The Kanban Method

Changing

perspective

with Agile...

Define Explicit Policies

• The goal is a culture of "Continuous Improvement"
• It does not end with "Agility"

To have a uniform understanding of when a card can be moved from one lane to another

Changing focus with

Agile/Lean...

Thank you for your time today......

Capacity

Planning

Apr 05, 2014

lahiri.sudipta@gmail.com

@sudiptal

sudiptalahiri.wordpress.com

• Beginning of the project
• Output: Resource Plan
• During project execution
• Things don't work as expected; need a mechanism to keep visiting your Capacity Plan
• If you are behind schedule, you are often asked - "how many resources do you need?"
• Scope Creep - what is the impact?

Join us at:

Limited WIP Society NCR,Delhi Chapter at:

http://www.meetup.com/Limited-WIP-Society-NCR/

Cumulative Flow Diagrams

(CFD)

Recap...

Continuous Capacity Planning

Using Kanban Board with explicit policies

• Fixed price projects have characteristics that need us to go beyond just Velocity/Throughput tracking

• Capacity plan throughout the Project execution

• Use AgileEVM thinking to track variance between planned progress and actual

• Use CFD to keep track of whether the team is delivering at the desired Throughput

• When scope changes, evaluate multiple options using the Throughput and iterate with stakeholders

• The same approach would apply to SCRUM projects also

The slope of this line gives you the Throughput; rate at which cards are getting completed.

Impacting

Scope Change

Agile EVM

At Project Beginning

Ref: http://brodzinski.com/2013/07/cumulative-flow-diagram.html

Accepting change is “key” to Agile thinking

Challenge:

In fixed price projects, how do you project timeline and budget?

• Define by Tamara Sulaiman and 2 others
• http://www.solutionsiq.com/Portals/93486/docs/earned-value-analysis-in-scrum-projects-wp.pdf
• Key difference: "Work" is given credit when it is completes testing/deployment
• Aligns with the Agile focus on "Working Software"

Budget

Tracking

Agile Methods

• Agile extrapolates past velocity/throughput to predict future
• Inherently, they assume stable teams
• They assume CFT teams
• However, in service organizations, resource allocations keep changing (# of people, experience of people)
• Solution: Apply EVM approach to Agile/Lean thinking

Working with the

Value Stream

One month

before Dev

One week

before Dev

Using AgileEVM for Planning

Aggregate this

by skill profile

The Approach...

The approach...

• Sound approach but we used a simpler template for the following reasons:
• Planned Value uniformly spread across project duration
• Accommodates scope change but does not accommodate for a schedule change in the middle of the project
• Hard to read and interpret
• Adoption is tentative
• Agile EVM modeling is available in some tools

CFD shows the project end date for revised scope @ current throughput

Reallocate capacity to match required throughput

On a weekly basis, EV is computed using AgileEVM approach and plotted against the PV

To track EV:

• Most Kanban tools dump card wise, stage wise data to an Excel
• Two alternatives:
• You can give a certain % completion to each stage of the value stream completed on their estimated size
• For example: Requirement done is 20% value earned, Design completed is 15% value earned.... OR
• Stick to Agile emphasis on “working software” and give 100% value earned when a card is archived
• Take this approach for your SCRUM sprints

Plot weekly data to get the EV trend

To track Actual Cost, get the actual weekly resource allocation data or time sheet data

Define Policies with for Capacity Planning

Let us understand this with an example...

Consider the following Board....

Applying EVM to the Capacity Plan built before

Excel Dump from

a Kanban Board

Current throughput

Assume that the team is performing at the Required Throughput, in this example, 16.13 story points per day

A few things to note...

• Frequency: Do Capacity Planning every time you do Backlog Grooming

• WIP Limits: Have a narrower WIP limit within the Backlog lane as you move from Left to Right. If you have some cards blocked for Capacity Reasons, you have others to choose from

• Current Loading: When assessing available capacity, consider current cards in "Value Added" Lanes with their Due Date.

Making it a little more practical...

You will get something like this...

• Positive/negative factors on productivity:
• Resource ramp-up, skill training, domain training
• Team decides how to calibrate productivity across time
• Benefits:
• PV reflects reality
• S-curve in PV

Now, evaluate Scope change...

100md of work has been added and updated in the Backlog (highlighted in RED)

Project the CFD again...

A little more complexity...

with an example

Required Throughput increases from 16.13/day to 18.09/day to meet the same timeline - an increase of 12% in addition

An iterative process with stakeholders to evaluate options and converge

Adjust PV for revised plan

Take an Estimated scope of 100mm

Available capacity: 80mm

10 calendar months fixed timeline

Plan for an initial ramp-up

For small changes in resource availability/scope, Planned Value need not change

Small: < 10% variation

For significant changes, rework Planned Value as for modified Resource Plan

Option I:

Increase capacity by 12-15% to reach desired throughput

Factor in an increase in overhead as team size increases

Option II:

Keep the same capacity but push back the timeline by 12-15%

Option III

Re-prioritize scope to keep the total scope largely unchanged but deliver to the revised timeline

Option IV

A combination of all of above for overall stakeholder agreement

Partial capacity increase + partial extension in timeline + reprioritizing scope

For each option, use CFD projection to evaluate the final result

Scenario II:

Scenario I:

Dev Manager believes than he/she will deliver 100mm with 80mm of capacity

Total PV at proj completion (EAC) = 100mm

Planned value distribution based on resource allocation distribution

Summary:

• SV measured on PV = 100mm
• CV measured on PV = 80mm

Dev Manager believes that he/she can deliver only 90mm of scope with 80mm of capacity

Total PV at project completion (EAC) = 90pm

Communicate to CDU for remaining10mm

Planned value distribution based on resource allocation distribution + uniform distribution of gap (10pm)

This is because you want to plan for 90pm though the resource allocation distribution is for 80mm

Summary:

• SV measured on PV = 90mm
• CV measured on PV = 80mm

You will get a plot like this...