Managing Resources and Finances Efficiently for an Agile Project

While there are a set of specific best practices that support Agile teams, many companies are yet to embrace them. 

These practices encompass talent management to Agile at scale, adequate leadership mindset and behavior, and a flexible IT infrastructure. Together, they help teams function at their full potential and deliver the returns to accompany a successful Agile transformation.

One critical area is planning and budgeting, specifically when adopting a model to effectively allocate and track funds. 

This blog gives you a brief glimpse into the practices that should be followed for appropriate resource management and budgeting while managing an Agile project team.

Importance of Planning and Budgeting For Successful Agile Projects

Although agile methodology involves a lot of planning and always consumes large amounts of time and energy, it should not be underestimated for it can significantly impact the ultimate success of the project.

Resource management is one such practice that comprises planning, scheduling, and allocating people, skills, money, and technology to a project or program. Simply put, it is the technique of allocating definite resources to achieve the greatest organizational value and highest returns.

The increasing demand to deliver value consistently with resources is not easy, even for the leading organizations. It comes as a common and constant challenge for the enterprise to ensure that there are enough resources and funding on hand to complete work well and on time. And that’s where right planning and budgeting or resource management can help.

When funding a large number of Agile teams, the model must be responsive enough to address the changes instantly, ensure that the company’s top priorities are being met constantly, and integrate input from a variety of fellow members, including senior executives, middle managers, and frontline employees.

Such models simulate the systems pioneered by digital natives and Agile leaders among well-established organizations and showcase withdrawal from traditional planning and budgeting. 

An organization when allocating its resources to the innovations encouraging the highest returns, it must provide Agile teams with the stability and the financial and strategic independence to focus quickly to new and better ideas. When it is determined that a different Agile team’s mission is more critical and worthy, leaders must also be able to divert funds to that group.  This way, the planning and budgeting process ensures flexibility both within and across the Agile teams.

However, if there is no or poor resource management; projects and initiatives taken may fail because of a lack of money or people, or because resources are focused on the wrong areas. It is one of the primary reasons work goes astray.

Planning and Budgeting Practices

Organizations should follow these three planning and budgeting practices that, when used to fund a large number of Agile teams, increase returns, and improves overall performance-

1. Capitalize on products mostly and not on projects
   
   Instead of focusing on diverse features or the result, Agile teams must constantly focus on specific, long-lived products. 
   Though making a shift towards product model instead of projects demands investment and changes in the organization, companies will need to employ or train qualified product managers. 
   Besides, they need to align their IT systems to the product to avoid multiple software-focused Agile teams working on the same code at the same time, which eventually could increase the possibility of errors.
   
   Managing and funding the majority of Agile teams around products ensures better results. However, not every Agile team should focus on products. A product focus is suitable only when requirements are static or the need for innovation is occasional.
2. Start with allocating budget smartly and at a small level
   
   In lieu of capitalizing on single annual funding allocation, focus on reallocated funds more frequently as per business cases. Start with small investments and utilize additional resources for ventures that perform well.
   The biggest advantage of this model is that organizations need not wait for next year’s funding cycle and can immediately invest in good ideas generated midyear.
   This can be achieved when Agile teams remain focused on their product. On the occasions when resources are shifted from one product to another, managers should keep team members together whenever possible to ensure the benefits of team consistency.
3. Close the funding feedback loops
   
   Real-time data on investment performance keeps leaders informed on how current work is being carried out and helps in the decision-making process about future funding allocations.
   Stakeholders can also evaluate the business metrics they care about most and then link these to individual Agile team goals to report both the value generated and the cost sustained by each team, in time.

Tips To Avoid Common Mistakes While Managing Agile Projects

Here are the 4 tips that can save your project from going off-track-

1. Do away with traditional management concepts
   
   Leaders need to eliminate the traditional ways of managing such as command and control, and genuinely accept servant leadership.
   Further, to achieve impact and win the trust of their teams, leaders should ensure they are amiable problem solvers whose primary objective is to facilitate teams and constantly eliminate hindrances.
   
   
2. Ascertain everyone is aware of the role of the Product Owner
   
   In agile organizations, the Product Owner plays a critical role by acting like the shock-absorber/bumper between the different stakeholders and the product teams.
   
   The bigger the size of the organization, the more complex is the stakeholders’ landscape, the more complicated it is for the Product Owner to balance decisions and content all stakeholders.
   
   Oftimes, the clash around priorities can lead to extreme frustration and inefficiencies. But organizations must create awareness across functions, markets, and product lines about what they do and what their instructions are. Product owners should be empowered, and consents should be made to move forward.
3. Make structural adjustments to business for better collaboration and value
   
   Effective agile working happens when there are synergy and efficient communication among teams.
   
   Teams should be structured cohesively, with common objectives and governance. Delivering exceptional customer experiences, products, or services is possible when inputs are received from cross-functional teams to provide different specialisms, experiences, and perspectives.
   
   With most traditional companies operating in functional teams driven by management, the business and technology teams get trapped in improving internal functions instead of focusing on end customers.
   
   Re-structuring the company to address these challenges is key for an agile transformation and also to reap its many of the benefits.
   
   
4. Aim for flexible scope within a fixed timeline and budget
   
   Among time, budget, and scope -  the last one should be flexible for agile delivery. The best practice to agree on the price of a sprint, a runtime, and a notice period. 
   
   This facilitates the client to supply the vendor with high-value and priority requirements, as far as budgets and business needs permit. The Product Owner is fully aware of the capacity they have to invest in the scope and accordingly prioritize within the defined boundary, based on learnings in the journey.
   
   They can plan efficiently as per the available budget and accordingly scale their product teams up and down for value creation.

Going Forward...

Efficacious utilization of resources is not simply a “delighted-to-have” feature of agile project management; it’s essential to attain success.

If organizations don’t keep track of their resources, such as people and money, and direct these toward the most valuable work, they might fail in completing projects and deliver the products that bring comparative strengths, losing potential customers.

Contrary to it, when the right resource management solutions are in place, organizations can leverage the tools to ensure that the right people and funding are aligned to those programs that will deliver the highest value to the organization and its customers.