Contracting for Agile and DevOps

18 Mar 2019
by Yugal Joshi, Achint Arora, Abhishek Mundra

This report is available only to Strategic Outsourcing & Vendor Management members. For information on membership, please contact us

As Agile and DevOps adoption rapidly grows in enterprises, sourcing executives are facing challenges as they try to understand the nuances of contracting in this new model vis-a-vis traditional services. Given that the contract volume and complexity are set to increase, it is imperative for sourcing executives to understand the nuances of Agile/DevOps and learn to contract for a product that is difficult to define.

In this research, we attempt to address some of the challenges in the current scenario by analyzing the “as-Is” state of Agile contracting and how enterprises are signing contracts. As part of the above scope, we have covered the following areas:

  • Existing adoption and its challenges
  • Contract tenets including Statement of work (SOW), pricing models, terms and conditions, etc.

To scale Agile at an organizational level, we also discuss on the “to-Be” state on how enterprises can contract for scaled Agile and what should the transformation journey look like. The topics that we cover in the scope include:

  • Scope definition and the importance of Definition of Done
  • Managing vendor lock-in (speed vs. reliability)
  • Removing the waterfall mindset and the inception of value-based pricing

As a logical extension to Agile and one of the hot trending topics, we do touch upon contracting for DevOps including some of the contractual tenets such as statement of work and key service levels that need to be addressed in DevOps delivery.

We conclude this report with some key recommendations for the sourcing executives that should be considered, when scaling Agile in their organizations.

Scope and methodology of this report:

The report has been prepared based on our interactions with several sourcing executives, evaluation of Agile sourcing contracts, and interaction with suppliers managing day to day challenges of Agile delivery.

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