Professional Documents
Culture Documents
Erik Beulen(&)
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].
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
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
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
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.
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
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
y = 0,0376x + 0,2651
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.
y = 0,0188x + 0,5377
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
y = 0,0337x + 0,0515
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.
y = 0,0232x + 0,3414
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).
134 E. Beulen
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.
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).
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.
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).
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).
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)
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 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).
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
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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