Considering that a human being is incapable of foreseeing all the possible scenario changes that will occur in the following year, agile methods are focused on customer engagement, interactive development, self-organized teams and adaptation to changes
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The ROI of Agile Methods
1. The ROI of Agile Methods
The difficulty in innovating
Innovation is a structured process that
demands research, experimentation,
mobilization and iteration. Companies must
decide which technological trends it wants to
follow, according to its perception of the
market to fully complete this cycle.
Human beings have difficulty in processing
large volumes of information and prefer to
repeat decisions or to work with limited
options (Ariely, 2008) and perhaps that is
why we feel more comfortable working with
fixed structures, annual planning and
processes, instead of monitoring and
adapting our strategies as disruptions arise.
Fixed Structures, either functional,
projected or matrix (PMI, 2013), do not take
into account that changing a business model
requires grouping profiles of multiple
departments, modifying the form of
organization for producing new days for
customers.
Annual planning, whether strategies,
budgets or project roadmaps, is generally
oriented around the objectives outlined in the
previous year, lacking flexibility to react to
market changes.
Task-oriented processes have been
dominant since the days of Taylor and Fayol
and require seeking ways of enabling
business survival.
While remaining in the current modus
operandi, the observation of client
experience, competitors and alternative
solutions become secondary causing
discrepancy in the company.
Agile methods
Considering that a human being is incapable
of foreseeing all the possible scenario
2. changes that will occur in the following year,
agile methods are focused on customer
engagement, interactive development, self-
organized teams and adaptation to changes
(Agile Manifesto, 2009).
This type of work involves interactive and
incremental scopes, delivering results that
bring the largest business value. The
projects focus on objectives, allow planning
modifications, as many as necessary, until
the desired result is achieved. Broader
definitions and short-term, focused planning
are used, after which an ascertainable
delivery is expected.
Agile Methods Gains
The first gain obtained with agile methods is
the construction of temporary organizations.
Breaking the structural barrier and
monitoring multidisciplinary teams is
equating conventional companies to product
and startup companies. This cultural change
requires the capacity to defy the fixed
structures to mobilize people and resources,
no longer grouping by skill, but by the
operations that have to be fulfilled.
The second gain is related to cyclical
planning. Annual plans are based on
estimates, with premises and restrictions
identified during planning. It is well known
that most of the premises are not met
throughout the year, either because of
market changes, employee turnover, lack of
financial resources, etc. More
comprehensive planning, executed in short
cycles, allows better adaptation to direction
changes in the face of internal and external
fluctuations.
The third gain is the transformation of
estimate culture into a results-oriented
culture. Substituting estimates for results
requires the understanding that time is an
inaccurate measurement. Using proportional
scales, such as the Fibonacci sequence to
estimate work increases accuracy and
reduces planning time, allowing the
company to more easily adapt to changes.
What is the ROI of Agile Methods?
The ROI (return on investment) measures
the effectiveness of an investment through
the relationship between the return and the
amount invested over time. According to
Rico, it is necessary to consider the ratio of
agile method projects versus traditional ones
and to observe costs, deadlines,
productivity, quality and client satisfaction.
The study references gains between 38-
100% for deadlines, 25-80% for productivity,
83% for client satisfaction and 74% for team
moral.
Measuring ROI of agile methods is not trivial.
In open scope projects, fixed time and cost
(Rodrigues, 2016), ability to prioritize
business value and make continuous
deliveries are differentials that make project
self-financing possible. Above all, it must
reflect on how to react to technological
disruptions. For a contemporary company, it
is imperative to keep products and services
up-to-date in the face of competitors and
new technologies. An unused opportunity or
3. a delayed entrance into a new market will
only be noticed in the P&L, when losses are
irreversible.
Instead of making accounts to measure the
return on invested amounts, it is better to
follow market share and look for potential
disruptions that can boost or remodel the
market of operation and most importantly,
keep flexible structures, agile work models
and focus on results.
Eli Rodrigues
Digital Experience Manager
everis
References
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