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Agile, points-based development agreement

Business requirement

Pipefish had been successfully delivering ongoing Agile software development of a global mining client's Enterprise Service Management Platform. The client was moving IT service procurement to an "as a service" model and Pipefish proposed a commercial model to transform the T&M software development services to a price per Scrum point model.

CIO watchlist: Yes
Scale: Global, multi-service area Enterprise Service Management (ESM) development (60,000+ users)
Programme Management: Customer

What we did

  • The customer commits to a "band" of points for the subsequent period (e.g. 50-100 points per sprint). This is usually planned based on the size of the demand backlog
  • Ideas for system enhancements (User Stories) are added to a backlog by the Customer's Product Owners
  • Pipefish reviews the User Stories and issues an estimated effort (+/-30% OoM) to deliver
  • Estimated stories are approved by the customer and added to the development backlog
  • Stories are taken from the backlog, according to priority, and allocated to the upcoming sprint within the Sprint Planning session
  • Pipefish developers review the stories and provide a final estimate (Fixed-price). NOTE: if the final estimate exceeds to OoM, approval to proceed is sought
  • Stories are developed within a sprint cycle (say two weekly), with review and input sought from Product Owners/SMEs as appropriate
  • On completion of the development sprint, the developed code is released into a test environment where the customer conducts User Acceptance Testing (UAT) and raise defects where functionality is not met
  • Pipefish fixes any defects and deploys them to the Test environment for customer retesting. NOTE: Pipefish commits to an SLA for the UAT defect rate (e.g. 95% of stories to pass UAT defect free)

Delivered outcomes

The customer was able to scale the development services up or down to meet the demands of their customers. Additionally, the commercial agreement was outcome focused rather than resource input focused ensuring customers received value for money.

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