Penalities and SCRUM/ Agile
We have converted quite a lot of our projects and teams to Agile which is great. The teams are happier and delivering value to customers. However, one area where we have a problem is with new customers.
New customers appreciate and value the flexibility Agile offers but would like to stick to a deadline [October 15 or December 15]. We always advise and agree them that this is a central part of Agile – aiming for delivering maximum functionality by given deadline. However, what is a problem is that they take the release date as being a bit too literal. They would even like a penalty for not completing the project by given date. And these are pretty knowledgeable clients who are pretty reasonable otherwise. We try and reason that with ability to prioritize, shelve and add features that Agile offers, this kind of clause is not possible. However, it does not cut much ice with them.
We have tried to convince management to add a bonus clause [if we meet target we would bill at higher rate and client will finance holiday for whole team]. Surprisingly the clients agree to this and the ball is back in our court. Further, the teams internally do not want to go in projects even with lure of bonus and no amount of convincing helps them. They say they can commit to the deadline only if all UML and prototype diagramming has been completed and signed off. This gives us ideas and scares of waterfall ghosts.
As always, its an interesting problem to have and something we need to plan out on how we would approach.