1. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -1- www.synerzip.com Accelerating Agile Across the Enterprise AccuRev Proprietary and Confidential Information - © 2011 Measuring Agile’s Economic Impact to Your Organization Damon Poole Founder and CTO, AccuRev 6/15/2011

2. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -2- www.synerzip.com Introduction to Today’s Speaker  Damon Poole, Founder and CTO, AccuRev Damon has 20 years of methodology and process improvement experience, running the gamut from small teams to 10,000-person global development shops. Damon is a Certified Scrum Master and writes frequently on the topic of Agile development with an emphasis on Multi-stage Continuous Integration. His "Do It Yourself Agile" blog is at damonpoole.blogspot.com; twitter: @damonpoole

3. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -3- www.synerzip.com A Few Companies We’re Helping to Go Agile

4. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -4- www.synerzip.com Today’s Key Take-away Agile Enables Organizations to Focus on Serving the Market Efficiently

5. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -5- www.synerzip.com Overview  ROI Overview  The I in ROI: Investment (Cost)  Calculating cost the Agile way Agile techniques  Rethinking who your customer is  The R in ROI: Return (Value) Increasing Return by reducing waste Maximizing value Reducing cycle time  Summary

6. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -6- www.synerzip.com Return on Investment Return Investment ROI = Software Value

7. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -7- www.synerzip.com Features are Like Scratch Tickets  Predicting return is hard  Cost is easy to measure

8. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -8- www.synerzip.com Measuring Cost

9. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -9- www.synerzip.com Traditional Planning Requirements Plan Release Date Cost Based on pro-rating the fully-loaded cost of all resources in the plan

10. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -10- www.synerzip.com Agile Planning Stories Backlog Release Date Cost = Iterations X Velocity X Cost per point Assumes Cross Functional Team

11. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -11- www.synerzip.com Agile Planning Components  User Stories  Story Points  Cross-functional team  Backlog  Iteration length  Velocity

12. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -12- www.synerzip.com Requirements  3.4 Customer Identification 3.4.1 A web “cookie” shall be used to uniquely identify visitors 3.4.2 Each customer shall be associated with a cookie 3.4.3 Cookies shall be stored in an RDBMS  3.5 Sale presentation 3.5.1 Each item for sale shall have a button marked “buy” next to the item 3.5.2 Selecting the “buy” action shall trigger an order placement action  3.6 Fulfillment 3.6.1 By default, all orders shall use the on-file default shipping information 3.6.2 If available, all orders will use the customer’s default payment method 3.6.3 It shall be possible for the customer to cancel any order for up to 4 hours after they place that order.

13. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -13- www.synerzip.com User Stories  “As a user I want to order what I am browsing with a single click.”  As a I want to

14. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -14- www.synerzip.com Story Points  The relative level of effort of a User Story  Takes into consideration all aspects of implementation: development, test, end- user documentation  Simple to calculate the cost per story point

15. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -15- www.synerzip.com

16. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -16- www.synerzip.com

17. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -17- www.synerzip.com Scrum Master Cross Functional All needed skills Self-organizing

18. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -18- www.synerzip.com Backlog Based Prioritization Business Value IssueWork ItemTypePoints 432User wants layout pleasing to the eyeStory2 420User wants example templates to choose fromStory3 419Admin wants zero installationStory5 612Manager wants dashboard viewStory5 599Admin wants LDAP integrationStory5 831Password reset isn’t workingDefect2 692User wants automatic todo list generationStory2 432User wants easy task entryStory1 119User wants subscription-based e-mail updatesStory5 332Marketing wants fancy splash screenStory3 516Admin wants 1-click license updateStory2 533User wants app to be ready in 3 seconds or lessStory5 619App crashes on ChromeDefect5 $$$ $

19. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -19- www.synerzip.com 20pts2 weeks 40pts4 weeks 60pts6 weeks 80pts8 weeks 100pts10 weeks 120pts12 weeks 140pts14 weeks 160pts16 weeks Agile Cadence  Backlog is broken into “iterations”  Iterations have a consistent length, such as 2 weeks  The number of “points” per iteration is the “velocity” Velocity: 20pts Iteration length: 2 weeks Backlog

20. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -20- www.synerzip.com Cost Per Story Point for a Team $814,307.99Annual Cost 22 ptsIteration Velocity 26 Iterations per year Annual Velocity 572 pts = $1,423.62 per point 2 weeks Iteration length

21. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -21- www.synerzip.com $31K $62K $93K $124K Simple Cost Calculation $155K $186K $217K $248K Backlog

22. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -22- www.synerzip.com Re-Framing ROI

23. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -23- www.synerzip.com Cost and Efficiency vs ROI  Efficiency of individual process steps can be measured  ‘Return’ becomes “% of requirements implemented”  Cost becomes a proxy for ROI  Increasing Return requires a customer and business focus methods for gauging business value

24. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -24- www.synerzip.com Who is “The Customer?” Market/Customers Software Development

25. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -25- www.synerzip.com Who is “The Customer?” Market/Customers Software Development Business Unit

26. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -26- www.synerzip.com Who is “The Customer?” Market/Customers Your offering

27. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -27- www.synerzip.com Increasing Revenue by Reducing Waste

28. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -28- www.synerzip.com Cost of Delay of a Feature “Market” emerges No more value You decide to do it The user can use it

29. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -29- www.synerzip.com Cost of Delay of a Feature You decide to do it The user can use it Delivery Delay

30. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -30- www.synerzip.com The Cost of Delay

31. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -31- www.synerzip.com Cost of Delivery Delay

32. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -32- www.synerzip.com Cost of Delivery Delay

33. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -33- www.synerzip.com SpecifyDesign Code Integrate Write tests Doc PlanTest > 60% of delivered features not worth the cost of development Cancelled -or- “Shelved” Waste Lower morale Missed opportunities Distrust Waste Lower morale Missed opportunities Distrust All cost, no value received Cost savings all lost Efficiency gains all lost All cost, no value received Cost savings all lost Efficiency gains all lost

34. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -34- www.synerzip.com Additional Lost Revenue  Decision delay  Missing first to market advantages

35. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -35- www.synerzip.com Maximizing Value

36. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -36- www.synerzip.com Measuring Relative Value  Frequency of use by the end user  Value to the customer  Percentage of customers that have a specific need

37. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -37- www.synerzip.com Methods for Estimating Value  Luke Hohmann’s Innovation Games “Buy a Feature” and other games  Use “Planning Poker” for value with key business stakeholders  Assign percentage of revenue to stories given the expected revenue in a product plan or contract  A combination of the above

38. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -38- www.synerzip.com Backlog Based Prioritization Business Value IssueWork ItemTypePoints 432User wants layout pleasing to the eyeStory2 420User wants example templates to choose fromStory3 419Admin wants zero installationStory5 612Manager wants dashboard viewStory5 599Admin wants LDAP integrationStory5 831Password reset isn’t workingDefect2 692User wants automatic todo list generationStory2 432User wants easy task entryStory1 119User wants subscription-based e-mail updatesStory5 332Marketing wants fancy splash screenStory3 516Admin wants 1-click license updateStory2 533User wants app to be ready in 3 seconds or lessStory5 619App crashes on ChromeDefect5 $$$ $

39. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -39- www.synerzip.com Categorizing Value HighLow Cost Low Avoid Do High Split ? Value

40. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -40- www.synerzip.com Splitting Stories -or- Panning for Gold

41. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -41- www.synerzip.com $5M per lane $11M per lane 10 Lanes: $50M 10 Lanes: $110M Money for another investment: $60M

42. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -42- www.synerzip.com Splitting Work Along Technical Lines Back end, infrastructure Middle layer Front end Surveyor wants to create a question

43. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -43- www.synerzip.com Splitting Work By Value Back end, infrastructure Middle layer Front end Surveyor wants to create a multiple choice question Surveyor wants to add a true /false question Surveyor wants to add a freeform question

44. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -44- www.synerzip.com JanMarMayJulFebAprJun AugSep Shorter Cycle Times vs Value $$ $ $$ $$$ $$ 1 month iterations Facebook Photo SMS Second Life RSS feeds Facebook Second Life RSS feeds Facebook RSS feeds Photo SMS Facebook RSS feeds SpecifyDesign Code Integrate Write tests Doc PlanTest Specify

45. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -45- www.synerzip.com Bringing it All Together

46. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -46- www.synerzip.com $$$ Results Todo Bank Account Shelved Cancelled Unused Customer Value Tangible Value Revenue new old Strategy Product Mgmt Market/Customers People Knowledge

47. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -47- www.synerzip.com Chief Product Owner Continuous Flow Int Customers Master Backlog Agile Teams Short Cycle Time User Stories Agile WorkFlow

48. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -48- www.synerzip.com Product Management Continuous Flow Int Customers $ $

49. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -49- www.synerzip.com Key Take-Aways  Maximizing Return on Investment is the ultimate goal  Maximizing ROI is another way of saying “maximizing market efficiency”  The cost of delay generally reduces the gains of minimizing the cost and maximizing the efficiency of development  Reducing cycle time and increasing velocity are better proxies than minimizing cost and maximizing efficiency  Agile has many techniques for reducing cycle time and increasing velocity  Blending of “the business” and “development” is key  Agile enables organizations to focus on serving the market efficiently

50. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -50- www.synerzip.com Q & A Time… 1-800-383-8170 or +1-781-861-8700 sales@accurev.com www.accurev.com blog.accurev.com www.synerzip.com Hemant Elhence hemant@synerzip.com 469.322.0349 Agile Software Product Development Partner

51. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -51- www.synerzip.com Synerzip in a Nut-shell 1.Software product development partner for small/mid-sized technology companies  Exclusive focus on small/mid-sized technology companies  By definition, all Synerzip work is the IP of its respective clients  Deep experience in full SDLC – design, dev, QA/testing, deployment  Technology and industry domain agnostic 2.Dedicated team of high caliber software professionals  Seamlessly extends client’s local team, offering full transparency  NOT just “staff augmentation”, but provide full mgmt support 3.Actually reduces risk of development/delivery  Experienced team - uses appropriate level of engineering discipline  Practices Agile development – responsive, yet disciplined 4.Reduces cost – dual-shore team, 50% cost advantage 5.Offers long term flexibility – allows (facilitates) taking offshore team captive – aka “BOT” option

52. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -52- www.synerzip.com Synerzip’s Clients

53. Accelerating Agile Across the Enterprise © 2011 AccuRev, Inc. All Rights Reserved -53- www.synerzip.com Q & A Time… 1-800-383-8170 or +1-781-861-8700 sales@accurev.com www.accurev.com blog.accurev.com www.synerzip.com Hemant Elhence hemant@synerzip.com 469.322.0349 Agile Software Product Development Partner