Agile Vendor Management Manifesto
Want to discuss and share the Manifesto which a group of coaches including myself have written.
Please refer to www.vendormanagementmanifesto.org for details
1.1 The Governance
The delivery team is governed by contracts. There are 2 types of contract we will be considering
•The Master Contract : This is a contract signed between the Customer and Supplier Management teams and governs the entire set of Scrum projects being executed.
•The individual work order level contracts: This is a contract which will govern the detailed work to be done by teams.
This manifesto will take into account both the type of contract
1.2 The Roles
The roles covered under this Manifesto are as follows
The Customer Management This is the management team of the customer
The Vendor Management Team Vendor Management team will work on behalf of the Customer Management team in preparing the contract and negotiating the same with the Supplier’s management
The Team The team will consist of multiple Scrum teams working on the projects governed under the Master Contract. They will end up working under the individual Work Orders signed up with the customer.
The Supplier Management The Supplier Management team will negotiate the terms and conditions of the Master Contract of the contract along with the The Customer Management team (and the Vendor Management team).
1.3 The Objective of this Manifesto
The Objective of this Manifesto is to define guiding principles around the Customer-Supplier working environment with regards to working on Scrum projects. The assumptions made are
•The environment is customer-supplier (i.e. an outsourced environment)
•The environment is distributed and may not be co-located
•The environment involves multiple vendors
The Customers and Suppliers are integrated elements of a working environment in a project. The Customers and Suppliers will work together with a common goal and that is “Producing Value for the End Customer”. This manifesto supports the Agile Manifesto Value “Customer Collaboration over Contract Negotiation”.
There are 12 principles which will support the Agile Value and are presented below in a format of Left over Right. The items on the left are valued more than the ones on the right.
Outline/Structure of the Talk
3 The Twelve Principles
3.1 Risk Sharing over Risk Transfer
The Customer Management and Supplier Management should own the risk collectively to create a joint ownership.
3.2 Featured Based Payments over Milestone Based
Payments are based on Business value i.e. payments are made when features are completed or released or when Business Value is delivered).
3.3 Outcome Based Productivity over Utilization Based
Productivity should be measured in the Scrum Projects. However, the contract should propose productivity measures based on the business value generated vs the utilization of the resources.
3.4 Team Based Ownership over Management Based
Commitments in a contract should be endorsed by the teams. The contracts should support the endorsement of teams for the work to be executed by the teams.
3.5 One Team over Partnership
Culture of one team one vision will lead to a long-lasting relationship and create a win-win for the Customer and Supplier.
3.6 Long Term Relationships over Fungible Contracts
Considering Profit, Stability and Business Value as 3 pillars for a Customer-Supplier relationship to provide business value, it is important to have long-term commitments that leads to more ownerships and alignment to the vision of the Customer.
3.7 End to End Contracts over Horizontal Contracts
Contracts should be made based on Products/Feature Based Deliverables (Vertical Slice or end-to-end) over activity/skill-based based contract (Horizontal slice e.g. Development, Testing, Acceptance etc)
Customer Management mindset must facilitate cross-functional (Vertical Slice) contracts.
3.8 Focus on Products over Activities
Focus on product delivery rather than on delivering activities.
3.9 Business KPI over Operational KPI (Key Performance Indicators)
Focus on Business KPI over Operational KPI will give opportunity to bring down the cost of correction thus increasing the value yielded by the organization.
3.10 Transparency over Bureaucracy
Transparent Culture between Customer and Supplier will facilitate collaboration and reduction in escalation and bureaucracy.
3.11 Respond over React
Contracts Governance should enable alignment between customer and Supplier Management so that potential escalations are responded at the earliest.
3.12 Contingency in Scope over Contingency in Time and Cost
Contracts should enable high-priority changes to be incorporated even late in the delivery cycle without increasing the time and cost of the project.
Please refer to http://www.vendormanagementmanifesto.org/
Mindset required when thinking of contracts with vendors
executives, Managers Leaders who are working in a Vendor -Customer environment