Some Agile experts are afraid to discuss Cost Savings
Why would anyone be afraid of Saving Money? Good question. The answer is that many Agile experts can’t explain where or how that money is saved. If your job is to implement or support Agile practices in an organization then you MUST be able to talk specifically about how those efforts can save the company money. So, let’s dive right in!
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I mentioned earlier that this is a little bit scary for some Agilists because they don’t truly understand where those cost savings come from. Well, agile does deliver cost savings, but there are some key ingredients and ways in which those cost savings are achieved. Agile practices do save companies money, but only when teams are allowed to prioritize their backlog, and this is key, eliminate low-value work. It’s really maximizing the amount of work not done that saves money. Most companies adopt agile because they think it is more efficient and that it will reduce costs. However, they are usually so overloaded with work that the cost savings are difficult to achieve. What is achievable is greater assurance that people are focused on the problems, whose solutions have the highest value. Again, prioritizing that backlog of work so that the things that have the most value, bubble to the top.
How can prioritization and value ranking help?
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Agile & the Pareto Principle
This is the key to understanding how agile saves money, becomes more efficient, and delivers faster. The key is to focus on the 20% of the work that delivers 80% of the value. So you have to have a couple of key things in place for this to work. One of them is you have to have a well-prioritized backlog from the customer point of view.
You deal with software on a daily basis that has functions and features that you never use. They actually have no value to you. Truthfully, they may have a negative value to you because they clutter up the interface and take up space where something else hidden in a menu you already do use could be more prominent.
So, if we’re delivering software, if we’re delivering an experience to a customer, a product, a service, we want to spend our time focusing on what they want the most first and eventually items in our backlog will come to where they have such little value that the juice is not worth the squeeze. The payoff is not worth the implementation.
Now you are don't have to be afraid to talk savings!
Now you understand how Agile can save companies money even when many Agile experts don’t. This puts you ahead of the curve when it comes to understanding what changes within an organization are truly valuable. Look for ways you can put this new knowledge to use in your career.