Nesma Autumn Conference 2017 - keynote presentation CGI

1. © CGI Group Inc.
how to reduce the inherent uncertainty of
contracts …
André van der Wiel
Contracting Director
Nesma Autumn Conference 2017

2. “IT Contracts are inherent uncertain and we are
constantly in search of means to reduce this uncertainty
during the contract lifecycle.
In this session we will explore where we should use
metrics or where to avoid them in order to build
a sustainable and successful contract…”

3. Yardstick
/’ja:dstik/ Noun,
a measuring rod a yard long, typically divided in inches,
standard used for comparison
Agenda
Goals and pitfalls of
metrics in contracting…
• IT contracts
• Functional division
• Construction
• Confounders
• Come together…
3

4. IT contracts… System Integration
Design, build and integrate
Application Services
Maintain IT software
“DBOF”
Design, Build, Operate & Finance
IT Outsourcing
Activities, Assets & people & delivering
services

5. System Integration
Functional design | Use case | “lift and shift”
estimates: SBS/WBS & estimate based on metrics
waterfall | Agile
Fixed Price, fixed Date | T/M | (Metrics?)
“Repeat factory with mature client and stable
environment” (trust)
Percentage of Completion | # sprints | quality of work
5
largely at supplier, Fixed Price & date,
(non functionals) over & under estimation
Scope
Execution
Type/ obligation
Metrics
Progress
Risk

6. Application Services
based on client data & due diligence results
Metrics based or historical data, SBS/WBS
functional (ITIL) to Devops/Agile
fixed price | Pay per use | Metrics (FP) | KPI
Bonus/malus
after calibration (SLO), full metrics,
e.g. quality of code, efficiency gain, maintainability
Catalog / SLA / KPI | backlog
6
Due diligence and SLO/SLA calibration, bonus/malus
Scope
Execution
Type/ obligation
Metrics
Progress
Risk

7. “Design, Build, Operate, Finance”
business case… High level of design
Metrics (“Factory driven”)
Build : waterfall | Agile
run : functional to DevOps | SLA / KPI
Fixed Price fixed Date | pay per use | bonus/malus
Full metrics,
e.g. quality of code, efficiency gain, maintainability
Build : PoC | # sprints, backlog | metrics
run : busines case > Catalog/SLA /KPI
7
Business case driven and high integration with
customer, pay per use
Scope
Execution
Type/ obligation
Metrics
Progress
Risk

8. IT Outsourcing
based on client (historical) data & due diligence
results Metrics based (parameter driven), SBS/WBS
functional (ITIL) to Devops/Agile
fixed price | Metrics o.a. FP | Pay per use Bonus/
malus
Full Metrics,
e.g. quality of code, efficiency gain, maintainability …
Catalog / SLA / KPI | Metrics
8
organisation, transition, transformation, efficiency
gain, Due diligence, SLO calibration, bonus/malus
Scope
Execution
Type/ obligation
Metrics
Progress
Risk

9. … and its “confounders”
Agile
DevOpsVelocity
Roles and responsibilities
Technologies
Quality of output Maturity of client
Number of incidents
Application Portfolio Management
Flexibility
Guarantees
ITAM
ReportingMixed teams
Business Value
Automation On/Off/Nearshoring
Charging model
Delivery model
CommercialLegal

10. … and its “confounders”
T&M
capacity
Project;
Agile
Project:
Waterfall
Service;
Price per FP
Service;
Price per sprint
DevOps
Capacity
Service;
DevOps team(s)
Agile
capacity
Complexity / maturity
Outputbased/addedvaluehighlow
highlow
Automatically
calculated FPs
Estimation
Repeating activities
automation
Pro Action Application
Mgmt
Customer maturity
Function Point
implementation
Agile Architecture (RCDA)
Product Owner maturity
Quality of code
Heterogeneous high maturity models drive
complexity (price/value) in contracting.
Metrics should be part of the solution
Service;
Price per SLA

11. Disputes occur in many IT projects and Services,
most agreements anticipate with escalation and arbitration …
Often disputed topics:
• Scope : increase of complexity, partial termination
• Quality of work : such as quality of code, security, maintainability etc.
• Due Diligence : clearing assumptions during tender process.
Contractual disputes
And solving them amicably

12. System Integration
Design, build and integrate
Maintain IT Systems
Maintain IT software and hardware
“DBOF”
Design, Build, Operate & Finance
IT Outsourcing
Activities, Assets & people & delivering
services
metrics application…
• Initial build metric estimation in
SI is riskfull. (heterogeneous
environments & system)
• Metrics and calibration adds
value to IT contracts

13. Come together… Metrics & Contracting
• Open standards verifiable by independent third parties
• New models for contracting DevOps and heterogeneous solutions
• Absolute measures versus relative
• Standardize “historic data” … controlled shared database?
• Help the business owners where & how
to apply Metrics in contracting