Agility, by definition, is the ability to move quickly and efficiently. In today’s dynamic and fast-paced business environment, organizations know that they must be agile in how they develop their information systems. Since software is crucial today to just about every business process, agile methods for developing software have become critical.
Most businesses have already adopted agile methods and practices in one form or another, be it Scrum, Lean, Extreme Programming, or Kanban. Despite the different names, each helps organizations better plan, develop, deliver, and improve their systems, and respond to changes in flexible and responsive ways.
However, many organizations aren’t reaping the full benefits of these agile methods because of the ways they scope and budget the projects. In short, they perpetuate past approaches to scoping and budgeting information systems. That results in developing features that might not be useful to customers. And once they complete a development phase, the team risks being disbanded while they wait for the next phase of their project to get funded.
To make scoping and budgeting processes more agile, organizations must institute three changes:
- Fund by value stream: Work should be funded with an economic view in mind, prioritizing features that customers and end-users would want over those that are not top-of-mind. If something is important for customers or suddenly becomes a pressing need, it must rise up the list of features that teams work on.
- Launch high-value but low-cost value streams early: One of the key advantages of agile methods is that it allows scope to be broken up into smaller tasks. Development teams should prioritize high-value but low-cost features because they will give management confidence the product will yield maximum value when released. That confidence comes in handy when management is asked for additional funds.
- Delegate scoping and budgeting to the teams: Assuming the product manager or owner is much closer to the product and its impact on customers, he / she ideally can best determine the features to be developed on priority, and decide on the allocation the budget necessary for the teams This ensures that once the value stream has been funded at the portfolio level, the team stays together and doesn’t have to wait till funding is approved for the phases of a project.
When organizations build complete agility into their development processes, they’re able to deliver new features to customers, quickly and effectively. To learn more about unlocking the value in agile processes, read my article Why Agile Software Development Requires Radical Changes in Budgeting and Scoping in this edition of our management journal, Perspectives.