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Interview: The importance of agile contracting in today´s business world – EFS Consulting

The Agile Automotive Engineering Summit is Europe’s leading virtual business event on the integration of agile principles, methods and practices into hardware and software development processes in the automotive industry. It is the meeting point for more than 150 experts to exchange knowledge and experience, to network and discuss key industry topics while creating new partnerships. Discover the next era of agility and join the most interactive live event concept across Europe!

In the run-up to the event, we.CONECT spoke with Jürgen Leitner (Partner) and Gregor Schuh (Projektleiter) from EFS Consulting, about the contracting requirements of a modern business world and how agile contracting solves many of the issues with conventional contracting.

Leitner

Jürgen Leitner

Gregor Schuh

Gregor Schuh

we.CONECT: What is most exciting about your role at EFS Consulting, and why are you passionate about your job?

Jürgen Leitner & Gregor Schuh: Working at EFS is very different from other companies of this size or in this industry. For a company with almost 200 employees, we have a very flat hierarchy. Our philosophy of sharing and connecting across teams results in company-wide transparency about important company-related strategies and issues and motivates people to pull together. Therefore, the company grows continuously – not just in size, but also in its culture, expertise/knowledge and structure.
Our work is very diverse and therefore exciting – no two days are the same.

 

we.CONECT: You present your solution for Agile Contracting at the conference. Why is Agile contracting important in today’s business context and what are the benefits?

Jürgen Leitner & Gregor Schuh: Agile projects are currently experiencing great popularity and are characterized by a high degree of flexibility in terms of requirements. However, these are not necessarily fully known at the beginning of projects and are therefore difficult to map in a classical contract that supports the “Waterfall approach”. Due to the increasing complexity of projects, suitable new types of contracts are needed for this.
With our approach for “agile contracting”, we represent a fair and transparent way of contract design.

 

we.CONECT: How is Agile Contracting different from conventional contracts?

Jürgen Leitner & Gregor Schuh: There are many differentiators, e.g. budget: Agile contracting ensures budget security for both contracting parties. Individual functionalities and use cases can still be flexibly adapted to the needs of the client in the course of the project. This is very different to existing waterfall based models or a contract based on Time & Material – both do not support agile requirements.
Another differentiator between agile contracting and conventional contracts is how you choose your supplier. To give you an example: In both conventual contract models, a supplier is often awarded the contract, which the client only knows based on the offer. An order based on a service provided, for example, a work sample, is the exception and difficult to represent contractually. This approach, however, is even more useful, if the complexity of the project is high. Ask yourself: Would you get married on the first date?

 

we.CONECT: What are the key differentiators in client and supplier relationships when using agile contracting?

Jürgen Leitner & Gregor Schuh: Of course, the key differentiators are always in connection with the actors involved. Agile contracting offers a framework that enables transparent and fair cooperation. For example, during the tendering process, the supplier is asked for feedback regarding the reference stories. This enables the client to assess the supplier’s experience and adapt to the tendering process. As already mentioned, the requirements of agile projects are not described in such detail at the beginning of the project. Changed requirements are therefore considered in the relationship between supplier and client. The decisive factor is not the changed requirements, but the resulting effort. Can a user story be replaced 1:1, or must scopes be adapted? Here, too, Agile Contracting relies primarily on a discussion between supplier and client. The planned checkpoint phases not only serve to evaluate the performance of the supplier. They are also used to exchange feedback between supplier and client and to discuss the further procedure together.
These were just three examples that describe the cooperation between supplier and client. The World Café will certainly give us the opportunity to discuss other key differentiators.

 

we.CONECT: What are the biggest difficulties in this regard? What do you see as particularly problematic?

Jürgen Leitner & Gregor Schuh: The biggest difficulty is not the creation of agile contracts, but the fact that the need for agile contracting is usually only recognized in the course of the project. This is too late. At this point, existing contracts can only be adjusted at great expense. We often find that the changed requirements lead to a change request and sometimes a (short-term) project stop is the result.
We are taking a survey at the moment to evaluate the relevance and the current state of knowledge of different interest groups on Agile Contracting. We want to identify the potential requirements of relevant contracting parties in the context of agile contracting. In the course of the event, we’ll discuss these inputs.
Reader and interested participants a highly welcome to share their thoughts with us in advance.
Link: https://forms.office.com/Pages/ResponsePage.aspx?id=3Xm1ksEHv0OyieHnreR7dJjYWBbtnbJIjgv6f1rXBqhURUFOUEdRSlg0ODlXNDE1OEw3S1Y4SEUwVy4u

 

we.CONECT: How do you evaluate success? What are the Key Success Factors?

Jürgen Leitner & Gregor Schuh: The success factors are to supply products that correspond to the conceptions of the client and already contain any adjustments. To achieve this goal, regular checkpoints take place. During a checkpoint-phase the performance of the service provider is evaluated, and feedback cycles are carried out. The performance becomes transparent and can be followed and compared over several stages. Remuneration is based on the service provided.
Agile Contracting knows different methods of motivation, which are discussed in our World Café.

 

we.CONECT: Which conversations are you particularly looking forward to at the event?

Jürgen Leitner & Gregor Schuh: We are looking forward to interesting discussions on gained experience with agile projects. Which Highs or Fails have the participants collected. What are the current problems and with which approaches did the participants try to master them?
These are the topics we are interested in it and we are looking forward to design possible solutions together.

 

we.CONECT: Thank you for the interview!