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Implementing and Contracting Agile

and DevOps: A Survey in the Netherlands

Erik Beulen(&)

TIAS School for Business and Society,


Warandelaan 2, PO Box 90153, 5000 LE Tilburg, The Netherlands
e.beulen@tias.edu

Abstract. Digital transformations facilitate the need for speed. Continuous


deployment is becoming the norm. Organizations need to change their service
delivery and are increasingly adopting agile software development and DevOps.
This requires different capabilities in IT delivery as well as in the business. A lot
of organizations struggle in identifying, retaining and recruiting accountable
executives, product owners and scrum masters. Organizations operating in
dynamic markets have started earlier with the implementation of agile and
DevOps and the delivery percentage of agile and DevOps is higher than for
organizations operating in less dynamic markets. Furthermore, the market is
anticipating on a decrease of the onshore percentage in delivering agile and
DevOps in 2020. The market is also anticipating on an increase of output based
contracting for agile and DevOps in 2020. In the current contracts, there are
hardly clauses protecting organization for poor service provisioning. Technical
debt is predominantly not a service provider risk. Also, most service providers
are fully compensated for contracted but cancelled sprints and releases. Both
technical debt and cancelled sprints and releases impact the cost efficiency of
agile and DevOps significantly. Finally, organizations struggle with re-
negotiating their infrastructure contracts to facilitate the agile and DevOps
delivery. This all requires attention of Chief Information Officers and procure-
ment departures. They must anticipate on delivery and contracting issues and
promote and orchestrate agile and DevOps.

Keywords: Agile  DevOps  Fixed price  Offshore outsourcing 


Onshore outsourcing  Price per function point  Price per story point

1 Introduction

In this day and age digital transformation is very much into fashion, but access to
capabilities and contracting are major concerns for many organizations. Digital trans-
formations dominate the agenda of most of business executives. Digital transformation
can be described best as using mobile devices, social media, analytics, Internet of
Things, and the cloud to improve the topline by enriching existing products and ser-
vices, and creating new services, by making smart use data [1–4]. Digital transfor-
mations are a combine business and IT effort and are performed by joint teams. Digital
transformations create new business models [5].

© Springer Nature Switzerland AG 2019


J. Kotlarsky et al. (Eds.): Global Sourcing 2018, LNBIP 344, pp. 124–146, 2019.
https://doi.org/10.1007/978-3-030-15850-7_7
Implementing and Contracting Agile and DevOps: A Survey in the Netherlands 125

Digital transformation is also necessary in an increasingly competitive and dynamic


market. Organizations require speed and innovation to keep up with market dynamics
[6–9]. Agile software development, often in combination with DevOps, are adopted by
many organizations to implement digital transformation. Digital transformation adop-
tion according to market research is high: enterprise wide (41%), working on strategy
(27%), in individual business units (22%) and only 10% has not adopted digitization
[10]. For executives, it is important to understand the need for agile and DevOps better.
Are market dynamics enforcing digital transformations and as a consequence agile
software development and DevOps delivery are required? Also identifying, retaining
and recruiting agile and DevOps talent is the number one challenge for most organi-
zation in implementing digital transformations successful [3]. However, currently most
of the agile and DevOps delivery is performed onshore. This leaves an untapped
potential in terms for availability of capabilities in countries like China, India,
Philippines, Eastern European and Latin American countries and in terms of cost
efficiencies (labor arbitrage).
Finally, most of the agile and DevOps services are currently contracted based on
input obligations. The risk of successful implementations of digital transformations is
fully with organizations instead of shared or transferred risks with service providers.
The research objective is to explore agile and DevOps delivery and contracting.

2 Agile and DevOps

DevOps is a set of practices intended to reduce the time between committing a change
to a system and the change being placed into normal production while ensuring quality
[11]. Successful introduction of DevOps requires “organizational rewiring” [12]. This
is much more fundamental and includes significant change management on top of the
implementation of a toolset.
Agile is embedded in Dev(elopement) (Agile Manifesto - 2001). Small develop-
ment teams focus on continuous delivery of software in short sprints. This requires also
an increased deployment frequency, which requires tooling.
Combining development and operations in a single DevOps team requires segre-
gation of duties. The control needs to be separated from operations. The replacement of
manual deployments by fully automated deployments reduces the risk level of
deployments significantly [13].
The biggest challenge of DevOps is in finding the right resources, organizations
need digital natives [14]. This is a bigger challenge is Dev(elopement) than in Op
(eration)s. In Dev(elopement) the product owner role is equally pivotal as hard to
fulfill. This role has to align the bottom up prioritization (team level) and the top down
enterprise strategic themes [15], also stakeholder management is important [12].
Agile@scale is a learning curve for most organizations. Frameworks like SAFe and
LeSS are challenged by agile purist. But for larger organizations top down structure,
governance and process & tooling standard are required to implement desirable
functionality [16]. Priorities need to be set, functional requirements as well as non-
functional requirements. Not prioritizing non-functional requirements will create
technical debt [17–19].
126 E. Beulen

Market dynamics are related to the number of clients and suppliers overtime [20, 21].
Also, variance in sales volumes, frequency of service or product innovations and rise of
substitutes contribute to market dynamics. Management need to prepare for adapting to
market dynamics [22–24].
Maturity of professionals is related to the number of years of experience in a role
and in relevant other roles, level of education and training, number of years with the
company [25–27]. Furthermore, leadership capabilities are contributing to the maturity
of processionals [28, 29].

3 Hypotheses

Digital transformations require agile and DevOps adoption. This research explores the
Pearson correlation between the percentage of Agile software development and the
percentage of operation in DevOps 2017 and in 2020 (Pearson correlation – [30–33].
The hypotheses test if the market dynamics are a predictor for the adoption of Agile
software development and operations in DevOps 2017 and in 2020. The survey
respondents provide their insight and understanding for both 2017 and 2020. The 2020
insights are obviously the survey respondent’s vision on the future.
For organizations with high market dynamics the expectation is that the experience
with agile and DevOps is expected to be higher as there is a bigger need for agile and
DevOps adoption. For organizations with high market dynamics the expectation is that
the percentage of Agile software development and the percentage of operation in
DevOps 2017 and in 2020 is higher, as there is a bigger need for agile and DevOps
adoption. The 95% critical values of the correlation coefficients decide if r is significant
or not. This will provide insides in the expected impact of market dynamics on agile
and DevOps adoptions.
ρ = the degree of market dynamics versus % of delivery

H0 (market dynamics – agile delivery - 2017) : ρ = 0


HA(market dynamics – agile delivery - 2017) : ρ > 0

H0 (market dynamics – agile delivery - 2020) : ρ = 0


HA(market dynamics – agile delivery - 2020) : ρ > 0

H0 (market dynamics – DevOps delivery - 2017) : ρ = 0


HA(market dynamics – DevOps delivery - 2017) : ρ > 0

H0 (market dynamics – DevOps delivery - 2020) : ρ = 0


HA(market dynamics – DevOps delivery - 2020) : ρ > 0
Implementing and Contracting Agile and DevOps: A Survey in the Netherlands 127

This research also explores the difference between the % onshore delivery with
agile and DevOps 2017 and in 2020. The hypotheses test if the 2017 % onshore
delivery is higher than the % onshore delivery in 2020 (two sample t test with paired
samples). The 5% Student t values (one tail) decide if r is significant or not. This will
provide insides in the expected developments in % onshore delivery for agile and
DevOps.
ρ = % onshore delivery 2017 versus % onshore delivery 2020

H0 (agile 2017 – agile 2020) : ρ = 0


HA (agile 2017 – agile 2020) : ρ < 0

H0 (DevOps 2017 – DevOps 2020) : ρ = 0


HA (DevOps 2017 – DevOps 2020) : ρ < 0

This research finally explores the difference between the % input based contracting
with agile and DevOps 2017 and in 2020. The hypotheses test if the 2017 % input
based contracting are higher than the % input based contracting in 2020. The 5%
student t values (one tail) decide if r is significant or not. This will provide insides in the
expected developments in % input based contracting for agile and DevOps.
ρ = % input based contract 2017 versus % input based contrac ng 2020

H0 (agile 2017 – agile 2020) : ρ = 0


HA (agile 2017 – agile 2020) : ρ < 0

H0 (DevOps 2017 – DevOps 2020) : ρ = 0


HA (DevOps 2017 – DevOps 2020) : ρ < 0

4 Data Collection

The data for this research is collected by a survey. The survey was submitted to ICT
Media, a Dutch organization that facilities IT decision makers in the Netherlands. The
members of this community are Chief Information Officers and their direct reports. The
response rate was 6.2% (217 responses to 3,500 invitations). However, some respon-
dents provided inconsistent responses. Other respondents didn’t complete the survey.
The number of responses that has been taken into account is 89, which reduced the
response rate from 6.2% to 2.5%. The survey was an anonymous survey; therefore, it is
not possible to conclude the representativeness of the sample (89 responses versus total
community of 3,500 members). However, the spread over the different sectors and
128 E. Beulen

spread of the size of the organizations the respondents represent do not indicate that the
respondents are not representative for the community, which was also confirmed by
ICT Media.
The survey was conducted in Dutch. The participants completed their response via
a portal. The responses were collected from 23 October to 8 November 2017. The
potential participants received one friendly reminder the second week the survey was
introduced.

5 Survey Population Characteristics

The participating organizations include national and international organizations. Over


25% of the participating organizations generate over 25% of their revenues outside the
Netherlands (see Fig. 1). As expected the larger organization are predominantly the
international organization. Nearly half of the organizations operate in financial services
(20 of the 89 respondents), government (11 of the 89 respondents) and manufacturing
(10 of the 89 respondents).

Fig. 1. Participating organizations by annual revenue in 1.000m Euro – split in national and
international organizations – N = 89.

Nearly half of the organizations have an IT spend of +5% of their revenue (41 of
the 89 respondents). One third of the organizations spend 50% or more of their IT-
budget with service providers (31 of the 89 respondents) The application management
budget ranges from less than 1m Euro to +50m per annum (see Fig. 2).
Implementing and Contracting Agile and DevOps: A Survey in the Netherlands 129

Fig. 2. Number of organizations by application management budget (N = 89).

Most organizations characterize their market condition as very dynamic (65% of 89


respondents score 4 or higher on market dynamics). Two third of the organizations
facing dynamic market conditions are large organizations (>=250m annual revenue),
see Fig. 3. The participating organizations of the sectors Manufacturing, Real estate &
Construction and Utilities & Telecom face less dynamic market conditions than the
organizations of other sectors, see Fig. 4.

Fig. 3. Percentage of organizations categorized by m Euro revenue per annum by market


dynamics (1 = stable – 7 = very dynamic) (N = 89).
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Fig. 4. Percentage of organizations categorized by sector and by market dynamics (1 = stable –


7 = very dynamic) (N = 89).

Fig. 5. Number of organizations categorized by market dynamics (1 = stable – 7 = very


dynamic) per number of months of experience in agile software development (N = 89).
Implementing and Contracting Agile and DevOps: A Survey in the Netherlands 131

Fig. 6. Number of organizations categorized by market dynamics (1 = stable – 7 = very


dynamic) per number of months of experience in DevOps (N = 89).

Organizations operating in very dynamic markets have started earlier with agile and
DevOps adaption (see Fig. 5). This can be explained by the increased need for agile
and DevOps enabling speed and flexibility required by market dynamics. Also, the
experience with DevOps is less than the experience with agile, see Fig. 6. This can be
explained by the need to have agile software development to successfully implement
DevOps.
The respondents score for different roles in agile software development and
DevOps were much higher than expected, especially the scores for the Product Owner
(average 3,72 - 2017, in a 1–7 Likert scale), Accountable Executive (average 3,18 -
2017), and Scrum Master (average 4,01). Most of the respondents also expect signif-
icant improvements for all roles in 2020. The expected lowest score in 2020 is for the
Accountable Executive role (average 4,31). The scores are discussed in more detail in
Sect. 7 and require further investigation.

6 Data Analyses

The number of responding organizations taken into account was 89 organizations


(N = 89). The preferred minimal number of responses is 25 [30]. The number of
responses is sufficient for reliable testing.
The impact of market dynamics was tested for agile software development and
DevOps. The hypotheses are tested for both 2017 and 2020. The 95% critical values of
the correlation coefficients decide if r is significant or not. Only the market dynamics
and percentage DevOps in 2017 is significant, although the market dynamics and
percentage agile in 2017 is nearly significant (see below text boxes).
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ρ = the degree of market dynamics versus % of delivery

H0 (market dynamics – agile delivery - 2017) : ρ = 0


HA(market dynamics – agile delivery - 2017) : ρ > 0

y = 0,0376x + 0,2651

R² = 0,0383 and r = 0,1957

The calculated r indicates a uphill (positive) linear relationship.

df=n−1=89−1=88

The critical values associated with df=88 are ±0,2074. If r is r is greater than the
positive critical value, then r is significant. Since r=0,1957 and 0,1957<0,2074, r is
not significant and the line cannot be used for prediction.

ρ = the degree of market dynamics versus % of delivery

H0 (market dynamics – agile delivery - 2020) : ρ = 0


HA(market dynamics – agile delivery - 2020) : ρ > 0

y = 0,0188x + 0,5377

R² = 0,0128 and r = 0,1132

The calculated r indicates an uphill (positive) linear relationship.

df=n−1=89−1=88

The critical values associated with df=88 are ±0,2074. If r is r is greater than the
positive critical value, then r is significant. Since r=0,1132 and 0,1132<0,2074, r is
not significant and the line cannot be used for prediction.
Implementing and Contracting Agile and DevOps: A Survey in the Netherlands 133

ρ = the degree of market dynamics versus % of delivery

H0 (market dynamics – DevOps delivery - 2017) : ρ = 0


HA(market dynamics – DevOps delivery - 2017) : ρ > 0

y = 0,0337x + 0,0515

R² = 0,0801 and r = 0,2829

The calculated r indicates a uphill (positive) linear relationship.

df=n−1=89−1=88

The critical values associated with df=88 are ±0,2074. If r is r is greater than the
positive critical value, then r is significant. Since r=0,2829 and 0,2829>0,2074, r is
significant and the line can be used for prediction.

ρ = the degree of market dynamics versus % of delivery

H0 (market dynamics – DevOps delivery - 2020) : ρ = 0


HA(market dynamics – DevOps delivery - 2020) : ρ > 0

y = 0,0232x + 0,3414

R² = 0,0214 and r = 0,1463

The calculated r indicates a uphill (positive) linear relationship.

df=n−1=89−1=88

The critical values associated with df=88 are ±0,2074. If r is r is greater than the
positive critical value, then r is significant. Since r=0,1463 and 0,1463<0,2074, r is
not significant and the line cannot be used for prediction.

The delivery percentage for onshore delivery in 2020 will be significantly lower
than in 2017 for both agile and DevOps (see below text boxes).
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ρ = % delivery onshore 2017 versus % delivery onshore 2020

H0 (agile 2017 – agile 2020) : ρ <= 0


HA (agile 2017 – agile 2020) : ρ < 0

Mean (agile 2017 – agile 2020) = 7.1556


Std dev (agile 2017 – agile 2020) = 40.0825
N = 89
Degrees of freedom = 88

t Stat = 1.6842
t Critical one-tail (.05) = 1.6624

The critical values associated with df=88 is 1.6624. If t Stat is larger than the critical
value, then we can reject H0.

Since t Stat = 1.6842 and 1.6842 > 1.6624, t Stat is significant and we can expect
with 95% confidence a decrease in onshore agile software development in 2020
compared to 2017 onshore software development.

ρ = % delivery onshore 2017 versus % delivery onshore 2020

H0 (DevOps 2017 – DevOps 2020) : ρ >= 0


HA (DevOps 2017 – DevOps 2020) : ρ < 0

Mean (DevOps 2017 – DevOps 2020) = 4.8989


Std dev (DevOps 2017 – DevOps 2020) = 23.3112
N = 89
Degrees of freedom = 88

t Stat = 1.9826
t Critical one-tail (.05) = 1.6624

The critical values associated with df=88 is 1.6624. If t Stat is larger than the critical
value, then we can reject H0.

Since t Stat = 1.9826 and 1.9826 > 1.6624, t Stat is significant and we can expect
with 95% confidence a decrease in onshore DevOps in 2020 compared to 2017
onshore DevOps.
Implementing and Contracting Agile and DevOps: A Survey in the Netherlands 135

Input based contracting in 2020 will be significantly lower than in 2017 for both
agile and DevOps (see below text boxes).

ρ = % input based contracting 2017 versus % input based contracting 2020

H0 (agile 2017 – agile 2020) : ρ = 0


HA (agile 2017 – agile 2020) : ρ < 0

Mean (agile 2017 – agile 2020) = 9.9213


Std dev (agile 2017 – agile 2020) = 27.3239
N = 89
Degrees of freedom = 88

t Stat = 3.4255
t Critical one-tail (.05) = 1.6624

The critical values associated with df=88 is 1.6624. If t Stat is larger than the critical
value, then we can reject H0.

Since t Stat = 3.4255 and 3.4255 > 1.6624, t Stat is significant and we can expect
with 95% confidence a decrease in input based agile contracting in 2020 compared
to 2017 input agile contracting.

ρ = % input based contracting 2017 versus % input based contracting 2020

H0 (DevOps 2017 – DevOps 2020) : ρ = 0


HA (DevOps 2017 – DevOps 2020) : ρ < 0

Mean (DevOps 2017 – DevOps 2020) = 4.8876


Std dev (DevOps 2017 – DevOps 2020) = 17.4671
N = 89
Degrees of freedom = 88

t Stat = 2.6398
t Critical one-tail (.05) = 1.6624

The critical values associated with df=88 is 1.6624. If t Stat is larger than the critical
value, then we can reject H0.

Since t Stat = 4.8876 and 4.8876 > 1.6624, t Stat is significant and we can expect
with 95% confidence a decrease in input based DevOps contracting in 2020
compared to 2017 input DevOps contracting.
136 E. Beulen

7 Discussion

Three topics for agile and DevOps require a discussion: a. The maturity of roles b.
changes in onshore/nearshore/offshore profile and c. changes in input/output con-
tracting obligations profile. Also, additional contracting issue including the costs of
technical debt, compensation for contracted but cancelled sprints and releases and
implications of adjusting current infrastructure contracts.
a. The maturity of roles
The maturity of the roles as scores for different roles in agile software development and
DevOps were much higher than expected. In this section, the focus is on the 2017
maturity scores of the product owner, accountable executive and scrum master. There is
not a real difference in the maturity score for small organizations (<250m Euro rev-
enue) and large organizations (>=250m Euro revenue), see Fig. 7. Especially for the
Accountable Executive this is remarkable. The Accountable Executive is more
important in large organization as coordination across multiple Product Owners is
required. Larger organizations were expected to have more mature Accountable
Executives. One of the respondents also labelled the role of Accountable Executive as
Servant Leader, supporting the Agile and DevOps teams in accomplishing their
objectives.
There is a difference in the maturity score for less experienced organizations (<24
months) and experienced organizations (>=24 months), see Fig. 8. This difference is
predominantly for the Product Owner and Scrum Master role and less for the
Accountable Executive role.
b. Changes in onshore/nearshore/offshore profile
Furthermore, some of the respondents mentioned the role of agile coaches in addition
to the role of Product Owners. Agile coaches potentially can improve the business
involvement. As mentioned by some of the respondents also technology alignment is
required. Introducing Product Manager roles might be helpful and ensures an IT-
architectural alignment and enables managing technical debt.
Secondly the split in onshore, nearshore and offshore delivery is explored in more
detail. For both agile and DevOps the size of organizations has little impact on the
delivery split. Larger organizations are slightly more aggressive, for both agile and
DevOps, by having a larger part of the service delivery in offshore locations instead of
nearshore locations (see Figs. 9 and 10). Currently global service providers are able to
deal with smaller contact volumes. Scale is no longer a pre-requisite for nearshore and
offshore delivery. The difference between organizations with revenue pre-dominantly
in the Netherlands versus organizations with revenue pre-dominantly outside the
Netherlands is bigger. Organizations with revenue pre-dominantly outside the
Netherlands more aggressively ramp up offshore delivery. These organizations are used
to engaging with global service providers and are considering the risks associated with
nearshore and offshore delivery as lower (see Figs. 11 and 12).
Implementing and Contracting Agile and DevOps: A Survey in the Netherlands 137

Fig. 7. Maturity score (2017 – low “1–3” and high “4–7”) for Product Owners, Accountable
Executives and Scrum Masters by revenue (<250m and >=250m Euro) (N = 89).

c. Changes in input/output contracting obligations profile


The percentage delivered by the internal organization remains for agile stable and the
percentage of contractors drops (2017 versus 2020). The output obligations (predom-
inantly fixed price and story points) for agile will increase 2020. Organizations are
becoming more mature in contacting based on output obligations. There is minimal
impact for agile of the size of the organization and the volume of the revenue outside
the Netherlands. Also for DevOps per percentage of contractors drops (2017 versus
2020). In DevOps there is increased outsourcing and reduced inhouse service provi-
sion. The infrastructure services are not providing competitive advantage and are
technical complex (requiring specific capabilities). Outsourcing is perceived as lower
risk option. (see Figs. 13, 14, 15 and 16).
138 E. Beulen

Fig. 8. Maturity score (2017 – low “1–3” and high “4–7”) for Product Owners, Accountable
Executives and Scrum Masters by agile experience (<24 months and >=24 months) (N = 89).

We conclude this discussion section with three observations related to contracting.


Technical debt caused by inefficient application development of service providers
should be at the risk of service providers. Nearly 80% of the outsourcing contracts have
no clauses related to the costs of inefficient application development. Only 10% of the
contracts include clauses protecting organizations fully for inefficient application
development. In 11% of the contracts include clauses protecting organizations partly
(see Fig. 17). For Chief Information Officers technical debt is an important service
level to track and to incorporate in future contracts by transferring the risks to service
providers.
Similar to technical debt, most contracts include no clauses for contracted but
cancelled sprints and releases. This increases the risk profile for organizations. Only
6% of the contracts includes clauses detailing service providers are not entitle for
compensation for contracted but cancelled sprints and releases. In 8% of the contracts
service providers are partly compensated and in 4% of the contracts service providers
are explicitly full compensated (see Fig. 18). For Chief Information Officers contract
flexibility is important. In future Chief Information Officers should contract clauses
allowing cancellation of contracted sprints and releases combined with sufficient
notice. Notice periods can range from 1 to 3 months.
Implementing and Contracting Agile and DevOps: A Survey in the Netherlands 139

Fig. 9. Onshore/nearshore/offshore split for agile in 2017 and 2020 for small organizations
(revenue <= 250 m Euro) and large organizations (revenue > 250 m Euro) (N = 89).

Fig. 10. Onshore/nearshore/offshore split for DevOps in 2017 and 2020 for small organizations
(revenue <= 250 m Euro) and large organizations (revenue > 250 m Euro) (N = 89).
140 E. Beulen

Fig. 11. Onshore/nearshore/offshore split for agile in 2017 and 2020 for organizations with
revenues predominantly in the Netherlands (<=50% revenue outside the Netherlands) and
organizations with revenues predominantly outside the Netherlands (>50% revenue outside the
Netherlands) (N = 89).

Fig. 12. Onshore/nearshore/offshore split for DevOps in 2017 and 2020 for organizations with
revenues predominantly in the Netherlands (<=50% revenue outside the Netherlands) and
organizations with revenues predominantly outside the Netherlands (>50% revenue outside the
Netherlands) (N = 89).
Implementing and Contracting Agile and DevOps: A Survey in the Netherlands 141

Fig. 13. Contracting for agile in 2017 and 2020 for small organizations (revenue <= 250 m
Euro) and large organizations (revenue > 250 m Euro) (N = 89).

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
DevOps 2017 DevOps 2017 DevOps 2020 DevOps 2020
(organizations (organizations (organizations (organizations
with <= 250m with > 250m with <= 250m with > 250m
Euro revenue) Euro revenue) Euro revenue) Euro revenue)

internal staff contractors (T&M)


service providers (T&M) service providers (Fixed Price)

Fig. 14. Contracting for DevOps in 2017 and 2020 for small organizations (revenue <= 250 m
Euro) and large organizations (revenue > 250 m Euro) (N = 89).
142 E. Beulen

Fig. 15. Contracting for agile in 2017 and 2020 for organizations with revenues predominantly
in the Netherlands (<=50% revenue outside the Netherlands) and organizations with revenues
predominantly outside the Netherlands (>50% revenue outside the Netherlands) (N = 89).

Fig. 16. Contracting for DevOps in 2017 and 2020 for organizations with revenues
predominantly in the Netherlands (<=50% revenue outside the Netherlands) and organizations
with revenues predominantly outside the Netherlands (>50% revenue outside the Netherlands)
(N = 89).
Implementing and Contracting Agile and DevOps: A Survey in the Netherlands 143

Fig. 17. Contract provisions for technical debt caused by inefficient application development of
service providers (N = 89).

Fig. 18. Contract provisions for contracted but cancelled sprints and releases (N = 89).

The introduction of DevOps typically creates scope discussions for existing


infrastructure outsourcing contracts, which typically include operations. Carving out of
the operations requires contract re-negotiations of existing infrastructure contracts.
144 E. Beulen

The majority of organizations has not re-negotiated their current infrastructure out-
sourcing contracts. The experience with re-negotiating infrastructure contracts is
mixed. About half of the organization experienced the re-negotiations as smooth where
the other half of the organizations experienced the re-negotiations as difficult or even
problematic (see Fig. 19).

Fig. 19. Re-negotiation contracting experience (N = 89).

8 Conclusions

Chief Information Officers need to ramp up capabilities to include agile and DevOps
capabilities in their organization and capabilities to contract agile and DevOps services
to facilitate digital transformations. The delivery model for agile and even more for the
operations part of DevOps need to shift from onshore to offshore to ensure access to
capabilities. Leveraging nearshore is questionable given increased risk profile com-
pared to onshore and the limited nearshore delivery capabilities compared to offshore.
Also, Chief Information Officers need to enforce output obligations including fixed
price and price per story point, when both the organization and the service providers
have built sufficient experience in delivering the service based on output obligations.
Future contracts with service providers must include provisions for technical debt, if
attributable to service providers, service providers must bear all the costs to resolve the
technical debt. Also, provisions facilitating flexibility to cancel contracted sprints and
release, with sufficient notice at no costs, are recommended.
Implementing and Contracting Agile and DevOps: A Survey in the Netherlands 145

9 Research Limitations and Future Research Direction

This research has been conducted in the Netherlands and included only a limited
number of respondents - predominantly Chief Information Officers and their direct
reports. Expanding the survey to other countries and business representatives will
improve the representativeness of the data. Also collecting data in the years to come
will help to understand the best practices for agile and DevOps better – annual survey.
These surveys can be supplemented by case studies to understand better the underlying
management decisions and issues organizations are facing.

Acknowledgements. The author would like to thank Rob Beijleveld, Sophie Haans and Arnoud
van Gemeren from ICT Media (www.ictmedia.nl) for inviting the members of the ICT Media
community to participate in the survey and for facilitating the execution of the survey.

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