Business Case for Agile

1,511 views

Published on

Slides from my session at Jazoon 2011 about the business case for Agile. Can You Calculate the Advantage of Agile Methods?

Published in: Technology, Business
0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,511
On SlideShare
0
From Embeds
0
Number of Embeds
23
Actions
Shares
0
Downloads
32
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide

Business Case for Agile

  1. 1. Business-Case for AgileCan You Calculate the Advantage of Agile Methods?Andreas Ebbert-Karroumcodecentric AG
  2. 2. AGENDA> Introduction> Financial Consideration> Non-Financial Consideration 2
  3. 3. What Is a Business Case?
  4. 4. BUSINESS CASE: FINANCIALCONSIDERATIONS
  5. 5. Measuring Financial ConsequencesReturn on Investment (ROI) // Kapitalrendite> Measuring how much of your invested „money“ you get back in return.Net-Present-Value (NPV) // Kapitalwert> Sum of all revenues and payments including interests.Break-even-Point // Gewinnschwelle> Point in time when accumulated costs and revenue are equally large.
  6. 6. Example Case – New Car-Insurance InventoryRicola Insurance creates new Car-Insurance InventoryProject duration:12 monthsProject costs:5.000.000 SFREarnings after launch:200.000 SFR each monthProject lifespan:5 years
  7. 7. Agile As In ScrumRelevant for financialconsideration> Iterative and incremental development (Sprints)> Prioritized requirements (Backlog)
  8. 8. Agile As In ScrumNot considered with potential positive impact> Higher team productivity (intrinsic motivation, self-organisation, …)> Reaction to changes> Including new ideas> Stop project in time (all features implemented; cancel project)Possibly neutral through automation> Frequent migration & deploymentNot considered with potential negative impact> Impeded productivity through frequent releases (for users)> More trainings> Higher operating costs through running systems in parallel
  9. 9. BUSINESS CASE:PURE WATERFALL
  10. 10. Business Case: Pure Waterfall 6.000.000 € 4.000.000 € 2.000.000 € cash flow -€ 1 13 25 37 49 -2.000.000 € -4.000.000 € -6.000.000 € monthsBreak-even-Point: 37 monthsReturn on Investment (ROI): 92%Net-Present-Value (NPV): 2.477.399 SFR
  11. 11. BUSINESS CASE:RELEASE EVERY 6 MONTHS
  12. 12. Business Case: Release every 6 months 6.000.000 € 4.000.000 € 2.000.000 € cash flow -€ 1 13 25 37 49 -2.000.000 € -4.000.000 € -6.000.000 € monthsBreak-even-Point: 33 monthsReturn on Investment (ROI): 104%Net-Present-Value (NPV): 3.033.000 SFR
  13. 13. BUSINESS CASE:RELEASE EVERY 3 MONTHS
  14. 14. Business Case: Release every 3 months 8.000.000 € 6.000.000 € 4.000.000 € 2.000.000 € cash flow -€ 1 13 25 37 49 -2.000.000 € -4.000.000 € -6.000.000 € monthsBreak-even-Point: 32 monthsReturn on Investment (ROI): 110%Net-Present-Value (NPV): 3.315.000 SFR
  15. 15. BUSINESS CASE:RELEASE EVERY MONTH
  16. 16. Business Case: Release every Monat 8.000.000 € 6.000.000 € 4.000.000 € 2.000.000 € cash flow -€ 1 13 25 37 49 -2.000.000 € -4.000.000 € -6.000.000 € monthsBreak-even-Point: 31 monthsReturn on Investment (ROI): 114%Net-Present-Value (NPV): 3.504.000 SFR
  17. 17. Business Case: Release every 3 months –prioritized requirements
  18. 18. Business Case: Release every 3 months –prioritized requirements 8.000.000 € 6.000.000 € 4.000.000 € 2.000.000 € cash flow -€ 1 13 25 37 49 -2.000.000 € -4.000.000 € -6.000.000 € monthsBreak-even-Point: 29 monthsReturn on Investment (ROI): 123%Net-Present-Value (NPV): 3.932.000 SFR
  19. 19. Business Case: Release every month – prioritizedrequirements
  20. 20. Business Case: Release every Monat – prioritizedrequirements 8.000.000 € 6.000.000 € 4.000.000 € 2.000.000 € cash flow -€ 1 13 25 37 49 -2.000.000 € -4.000.000 € -6.000.000 € monthsBreak-even-Point: 27 monthsReturn on Investment (ROI): 128%Net-Present-Value (NPV): 4.175.000 SFR
  21. 21. ARE WE ALWAYSHITTING THE GOAL?
  22. 22. How successful are software projects? The Chaos Report 2009 32% 44% Succesful Challanged 24% Failed
  23. 23. BUSINESS CASE: WATERFALLWITH FOUR MONTHS DELAY
  24. 24. Business Case:Waterfall with four months delay 6.000.000 € 4.000.000 € 2.000.000 € -€ cash flow 1 13 25 37 49 -2.000.000 € -4.000.000 € -6.000.000 € -8.000.000 € monthsBreak-even-Point: 49 monthsReturn on Investment (ROI): 43%Net-Present-Value (NPV) 278.000 SFR
  25. 25. BUSINESS CASE:RELEASE EVERY 3 MONTHS,PRIORITIZED, 4 MONTHS DELAY
  26. 26. Business Case: Release every 3 months,prioritized, 4 months delay 6.000.000 € 4.000.000 € 2.000.000 € -€ cash flow 1 13 25 37 49 -2.000.000 € -4.000.000 € -6.000.000 € -8.000.000 € monthsBreak-even-Point: 38 monthsReturn on Investment (ROI): 86 %Net-Present-Value (NPV): 2.277.000 SFR
  27. 27. BUSINESS CASE:RELEASE EVERY MONTH,PRIORITIZED, 4 MONTHS DELAY
  28. 28. Business Case: Release every month, priorisiert,prioritized, 4 months delay 6.000.000 € 4.000.000 € 2.000.000 € -€ cash flow 1 13 25 37 49 -2.000.000 € -4.000.000 € -6.000.000 € -8.000.000 € monthsBreak-even-Point: 37monthsReturn on Investment (ROI): 91%Net-Present-Value (NPV): 2.519.000 SFR
  29. 29. BUSINESS CASE: NONFINANCIAL CONSIDERATIONS
  30. 30. Time to Market
  31. 31. Faster market entrance with interative,incremental development FunctionalityFirst Mover Window of Opportunity> Be the first on the market with a new product Complete functionality of releaseFast Follower Minimal marketable functionality> React quickly, when your Δt until product can be launched competitors launch a new iterative, product incremental waterfall t
  32. 32. Less non-valuable resultsWorking software everymonthContinuous customerfeedbackIntensive communicationinstead of specification
  33. 33. High quality with lasting effectDefinition of Done 100% 90% 80% 70% 60% 50% 40%Maintenance starts after 30% 20% 10%2nd iteration 0%Automating Test,Integration andDeployment Unstrukturiertes System Strukturiertes Sytem
  34. 34. Andreas Ebbert-Karroum www.codecentric.decodecentric AG, Düsseldorf andreas.ebbert-karroum@codecentric.de

×