A recent CIO article from Hakan Altinepe, titled "Product Funding and the Burden of Agility" explores the differences between traditional project-based funding and Agile "product-based" funding, and illustrates why priority and resource capacity are central to the properly funding Agile projects.
As the article points out, traditional funding involves the annual planning cycle that explores opportunities backed by a business case and with fixed scope and an estimated schedule and budget. In Agile, product-based funding is distributed across ongoing and self-managed teams, often organized around product areas. Cost and schedule are fixed, and teams tackle the highest priority, most valuable work to continuously deliver value.
According to Altinepe, Agile operating environments offer three management levers to influence the outcome, scope, and schedule of agile initiatives:
This is also consistent with what I’ve been saying and what PDWare has been saying., so it’s refreshing to see it acknowledged. The principle is that, with these levers set correctly and adjusted frequently, work can be accelerated or decelerated, and team resources can be reallocated accordingly. However, when these variables aren't maintained correctly, people start working on the wrong things and value is diminished.
As Altenepe states, "the burden of continuously maintaining these levers at an optimum is called the burden of agility, and the aggregate economic loss caused by the improper settings of these levers is called the cost of agility."
And here comes the punchline. The burden and cost of agility increases at scale.
Altinepe notes that this is where Agile-friendly resource planning tools can help, provided they have the requisite maturity with balancing supply, demand, and priority.
The article rightfully concludes that the three-lever product-funding method is necessary for all agile organizations with considerable scale, and cautions that this does not come without a cost. With that said, agile organizations can mitigate this cost with tools and methods that help balance the three levers of work priority, team size, and portfolio workload.
I highly recommend perusing the article.
Jerry Manas is the bestselling author of The Resource Management and Capacity Planning Handbook, Napoleon on Project Management, and more. At PDWare, Jerry helps clients improve strategy execution through tools and processes that align people and work with organizational priorities. Connect with Jerry on Twitter and LinkedIn.
PDWare is a pioneer in resource planning software, offering intuitive resource planning tools to drive your work portfolio based on your people's capacity. PDWare believes that good strategy execution, portfolio management, and project delivery begins with a solid foundation of resource planning. PDWare is a proud sponsor of the Resource Planning Summit, the premier resource planning conference.