The Business Value in Becoming an Agile Enterprise
Posted on 29. Feb, 2012 by ger in Leadership, New Ways to Work
In the last few weeks I’ve been asked the same two questions a number of times:
- Does this agile stuff really make a difference in financial terms?
- We don’t do software development, does agile really apply to us?
In this post, I’ll answer these questions (the short answers are yes and yes). I’ll tell you three short stories. Two stories quantify the benefits of agile. The final story is about a team who uses agile to run marketing campaigns.
What’s in it for us?
Michael Mah in “How Agile Projects Measure Up, and What This Means to You” analyzes two software projects. He compares their performance to projects of similar sizes from a large project-performance database. The projects measured lower costs, shorter time-to-market, and increased quality.
Follett Software used a technique called eXtreme Programming and achieved:
- Dramatically lower costs ($2.2m versus an average of $3.5m for similar sized products)
- Shorter time-to-market (7.8 months versus an average of 12.6 months)
- Less defects (121 versus 242)
BMC Software used Distributed Scrum. They added more staff (92 versus 40 average) to optimize time-to-market. They achieved:
- Dramatically shorter time-to-market (6.3 months versus an average of 15 months)
- Slightly lower costs ($5.2m versus an average of $5.5m for similar sized products). The extra cost of staff was offset by much shorter project duration.
- Slightly less defects (635 versus 713)
These are just two specific examples. David Rico completed a much larger meta-study looking at a large number of projects (which referenced a paper published in the EJIS that I co-authored with Brian Fitzgerald and Kieran Conboy).
Agile beyond software development: a retail marketing campaign
One of our customers decided to apply agile on retail marketing campaigns across 13 European countries.
Before agile they organized everything quarterly. Every quarter their campaigns had a number of open issues that spilled over and took time to resolve the following quarter. The backlog of open issues was ever increasing and pressure was mounting every quarter.
When they applied agile they split the teams into smaller units of 5 people or less. They ran projects in shorter iterations (monthly sprints instead of three month iterations). They observed a number of key benefits:
- Very few issues spilled over from one quarter to the next
- They were able to eliminate the historical backlog
- Team morale improved dramatically
Again this is one specific example. Stephen Denning has written an excellent book “The Leaders Guide to Radical Management” about applying agile principles to management in all kinds of businesses.
Learn more
If you’re a time-pressed business person, read Israel Gat’s short book “The Concise Executive Guide to Agile”. He gives a good overview of agile that focuses on the numbers and how to introduce agile in your enterprise.
If you’re based in the UK, “The Agile Leader” is a team of consultants and coaches who deliver Agile transformation to organisations.
Try Goshido, our collaboration & project management platform. Goshido is so flexible it can be used for projects in any part of your organization.