Big Room Event - How to co-create an Agile Contract in less than 2 days with 3 parties simultaneously
The fascination with Lean-Agile Procurement lies definitely in the big room events, where we gather customer needs with 100+ end users or co-create a Lean-Agile Agreement (Contracts) with e.g. 3 parties each or even let them form alliances as they go. People that hear that often think this isn’t possible, it sounds like magic because up till now it took us months to just finalize a contract!-In this blog post we’d like to share with you the secret sauce and some tipps-n-tricks around it, preparation!
The fascination with Lean-Agile Procurement lies definitely in the big room events, where we gather customer needs with 100+ end users or co-create a Lean-Agile Agreement (Contracts) with e.g. 3 parties each or even let them form alliances as they go. People that hear that often think this isn’t possible, it sounds like magic because up till now it took us months to just finalize a contract!-In this blog post we’d like to share with you the secret sauce and some tipps-n-tricks around it, preparation!
PLEASE NOTE: First of all we need to set a disclaimer. Not a single case in a complex space we operate in was the same. In other words look at this blog post as well as on Lean-Agile Procurement in general more of a framework. This framework might inspire you, in rare cases it even solves exactly your problem, but it’s definitely no checklist. Use your brain-power of the cross-functional team, take bits and pieces and adapt it to your needs!
Introduction
If you are the one, or part of an organization, that likes to organize a Big Room Event to decide on a partner, their service/product, etc. this seems like a huge challenge. Get inspired how it looks in reality in this fast-motion video with the CKW Group. They called it internally Pocathon (Proof-of-Concept + Hackathon).
A lot of people from various parties are swarming in the room and work on something. It looks like in a beehive and yes there are some similarities with it. We arrange the shortlisted vendors around the queen bee, or in our case the buyer’s cross-functional team, their decision taker, etc. (table in the center of the room). Everybody (vendors) should have always a direct access to the customer to ask questions, etc..
The reason we organize such an expensive event is to get the maximum alignment out of it and so minimize risk by talking about all assumptions, risks, etc. Doing so we improve each of the proposals and the contract. We even try to use the expertise in the room of the vendors to let them come up with their ideas (wow the first time we’re getting Innovation through collaboration), or let them challenge an intermediate result from their competitors. This might sound unfair, but basically our intend is different. We wanna make them learn and improve, so that not just the buyers risk get decreased, but both sides win.
“None of us is as smart as all of us.”
It’s all about Alignment
Beside the traditional Business Fit around pricing, quality, timing, etc. we introduce with Lean-Agile Procurement also a Cultural- and Human Fit!-From our experience this is in complex sourcing cases as important than choosing the right product/service. However the vendors often experience this as assessment and it really is one. Similar to a Speed-Dating we wanna test our collaboration even before we get married!
Source: LAP Alliance, by Philipp Engstler
Another big difference is the set of values we apply during Lean-Agile Procurement and which become the new values for the cross-functional team for delivery. As we’re looking for a true partnership agile values like transparency, honesty, commitment, or fairness apply e.g. also while the „negation“ and co-creation of the contract.
“This is the fairest contract we’ve ever agreed on!”
Everything you need to know
So before we give you some insights about how we’ve organized Big Room Event in the past you need to ask yourself:
WHO & WHAT’s needed to agree in a minimum amount of Time?!
Just answer this question in your context and you’ll get the RIGHT setup and agenda for your case. You’ll realize that this means a lot of preparation, where you’ll need the full attention of the cross-functional team.
Agile Organization of your Big Room Event
It turned out a good practice to apply to the facilitation of a Big Room Event agile practices as well and that’s why we usually sprint in several iterations through all the topics below. Sprinting allows us to get and share fast feedback and learn for the next iteration. This improves every vendor’s results with every iteration and at the end we’re able to choose the best of it!-You need an Agile Roadmap as an appendix to your contract?-Well then iterate on it and improve it together until it’s “Good enough”!
Source: LAP Alliance - Principle Big Room Organization
Depending on your preferred Lean-Agile Agreement (Contract type) you might not need some of the topics below. Also a Proof-of-Concept (PoC) sometimes isn’t appropriate, but I wouldn’t miss to let the vendors create at least a presentation, or a solution design or similar. If we’re sprinting, why not introducing the results to the real end-users again from time to time and get their feedback too?-Or let the vendors pull their topics in a joint planning and test their commitment right away.
Backlog of possible Topics
Introduction: Getting in touch, who’s here, in what role, what
Approach & Agenda incl. Definition of Done (DoD)
Alignment/Context: Vision, business objective of product/service (buyer/vendor)
Persona’s: Customer segmentation, it’s importance & needs
Agile Roadmap incl. Objectives & Key results
PoC: Delivery/Presentation of most challenging aspects
Lean-Agile Agreement: Improving draft of agile contract, it’s commercial-/collaboration-model, etc.
Solution: Technical design/-conditions
Estimation: Putting the numbers together & agree on risk-share, assumptions, etc.
Demo’s: Presentations of intermediate-/results/content for the participants or with the main stakeholders
Peer-feedback: intermediate feedback/decisions
If this is your first Big Room Event it’s recommended to include at least a facilitator that is used to handle 20+ people. Furthermore I always create a script with a detailed estimation for each time box so that it’s more feasible how long it really takes. However, you always should expect the unexpected at any time and then react!-We once realized that the license model was super complex and we immediately stopped the workshop and let the 3 competitors co-create the optimal license model together.
Good Practices
Find some more good practices below:
Sprinting: Iterating on above topics with joint events such as Sprint Planning, Review, Retro
Fixed Time-boxes: Strict facilitation of time-boxes
PULL: Self-organization of vendor teams
Facilitation: Mix up with various big group facilitation technics
Co-location: All in 1 room all the time, except for confidential topics private sessions
Transparency: Immediate sharing of new insights
Collaboration: Let the people work together that might become partners and will ship the product/service together
Surprises: To test behavior’s under stress insert some surprises and pitfalls too and see how they react on those
No Secrets: Put anything on the table you recognize such as bad behavior, strange solution, etc. to clarify it immediately
FUN: Don’t forget to make and keep a good atmosphere
Management Summary
At the end a short management summary for your decision takers:
Investment: It’s worth it spending 1-2+ days with so many people so that they all will be aligned and ready to deliver immediately. Imagine the costs, if they aren’t instead?!-An incremental sourcing minimizes risk and maximizes business value at the same time!
Time-to-Market: Time-to-Market only could improved if we change the way we currently work. As leader you’re in the position to make this work and support the business in keeping up with the market demand. In avg. we have a lead time of 2-4 weeks per case (Big Room Event included). This is an improvement of 400-800% to traditional approaches!
Constraints: This new way of working doesn't come for free. It needs a high support from you as a leader because we need to rethink and bend a lot of existing rules. However, as we have all experts e.g. from compliance, procurement, business, etc. in the cross-functional team we ensure to stay complaint all the times. So no worries!
Presence: Being present as a leader makes a huge difference and gives the topic it’s importance and you could support with an introduction in business objectives, the vision, or support the cross-functional team with your experience e.g. during negotiations, critical questions or situations, etc. If you’re not needed you could just be there and enjoy working without disturbance :-)
I wish you all the best with your application of a big room event. Let us know how it went!
Author
Sources:
Image: https://www.fotocommunity.de/
Video: CKW Group
Content: LAP Alliance, all rights reserved
Media Release: CKW & FLOWDAYS WIN SUPPLY MANAGEMENT AWARD 2018 EUROPE
CKW and flowdays won the most important European award in the procurement industry with the Supply Management Award. The award honors the innovative and agile procurement process for a new intranet from CKW in weeks instead of months.
CKW and flowdays won the most important European award in the procurement industry with the Supply Management Award. The award honors the innovative and agile procurement process for a new intranet from CKW.
In a so-called Pocathon (Proof of Concept and "Thon" by Marathon), the teams and products of three intranet providers were put through their paces for two days. The goal was to implement real CKW application needs.
"On the one hand, we wanted to test whether the products actually meet our expectations, whether the intranet fits in with CKW's IT landscape and whether a legal, commercial partnership agreement could be found," says Andreas Schneider, Head of Supply Chain Management at CKW. "With the approach 'Lean-agile-Procurement', we were able to significantly shorten the time from the idea to the productive start of the new intranet compared to traditional approaches». Specifically, CKW signed a letter of intent with the winner after exactly two days, 1st Quad. Usually, such a procurement process takes weeks. Just six months after the Pocathon, CKW's new intranet was put into operation in mid-October 2018. A further advantage for the project managers of CKW was that they did not get to know the salespeople of the three suppliers, but specifically the implementation team.
Recently, Andreas Schneider, Head of Supply Chain Management of CKW, Yvonne Ruckli, Project Manager of CKW and Mirko Kleiner, Agile Coach of flowdays in Prague, accepted the award.
Caption: Recently, Andreas Schneider, Head of Supply Chain Management of CKW (2nd from left), Yvonne Ruckli, Project Manager of CKW (3rd from left) and Mirko Kleiner, Agile Coach of flowdays (4th from left) in Prague were honored answer.
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Case Study - CKW Group: Sourcing of a group Intranet Solution in 2 days via Lean-Agile Procurement
Procurement so far has shown that CKW must move faster and closer to customers in order to better meet their needs. So they decided to try Lean Agile Procurement (LAP) for the first time in order to procure a group intranet solution. With fantastic results, e.g. 400% increased time-to-market!