A corporate axiom is changing, shifting from “Big eats small” to “Fast eats slow.” But change doesn’t happen overnight.
While Agile and lean methods continue to chip away at the status quo, making gains and increasingly moving beyond pockets of teams to the portfolio and then enterprise-wide adoption levels, waterfall approaches to delivery persist.
Rumors of waterfall’s demise, it seems, have been somewhat exaggerated. A survey conducted by the Scrum Alliance (2017) of Scrum practitioners revealed that 78% of respondents said they used Agile-Scrum practices in parallel with waterfall practices. Mixed waterfall/Agile environments are complex. For many large companies, this is the norm. This is when the cohabitation challenges of agile and traditional workstyles become more glaring.
Importantly, as IT finance management (ITFM) leaders know, becoming “more agile” doesn’t give you a pass when it comes to financial discipline and oversight. Agile organizations are still responsible for their ROI and saying you’ve adopted lean methods doesn’t automatically make you lean. Or fiscally responsible. Or well-governed. Or profitable.
ITFM Leaders are Under Pressure
Technical organizations are in the midst of evolving from being project-centered to product-oriented solution delivery and scaling Agile from the team level up to the portfolio/enterprise. In these evolving, hybrid working environments, faced with larger and more vocal agile communities, ITFM managers are facing increasing process dissonance between traditional and agile methods, wreaking havoc with their reporting, planning, budgeting and oversight.
In a blended traditional/agile financial portfolio, understanding the true cost of projects, portfolios, value streams and OKRs helps companies make better use of their financial resources to drive profitable outcomes.
And with interest in the value of IT spreading beyond the CIO to the rest of the C-suite, integrated reporting and decision-making that combine Agile work with traditional IT projects, the ITFM role itself is even more essential.
Technology Business Management: Accurately Measuring the Cost of IT
For many ITFM leaders, a focus on the discipline of technology business management (TBM) has improved their ability to better understand IT costs and influence governance and behavior through targeted analysis of real-time reporting (and chargeback) for IT resources. TBM provides a decision-making framework to help leaders understand the true costs involved in the delivery of products and services to customers. That has worked well, particularly in industries where project-centric, traditional waterfall projects are the norm. As it turns out, it works very well for supporting Agile, too.
As agile gains momentum, finance is where it collides with P&L statements, budget dollars and fiscal quarters. With the seemingly irreconcilable Agile release trains and program increments, story points and cycle times, it can be difficult to see an integrated path forward. Fortunately, for teams that have embraced it, TBM provides a well-tested, proven framework that is easily extended to support enterprise Agile transformation.
Agile transformation and scaling initiatives occur as teams of teams seek to reap the rewards of end-to-end enterprise agility.
And, as enterprise agility expands, ITFM leaders will likely encounter process improvement initiatives that are key to an Agile transformation and that directly influence IT finance. Central among them are lean portfolio management (LPM) and value stream management (VSM). Due to their direct influence on ITFM and their intertwined agile characteristics, these two especially deserve early focus. And, while there are certainly more dimensions to enterprise agility, this is a good place to start.
