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What Your CFO Wants You to Know

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What Your CFO Wants You to Know

  1. 1. What Your CFO Wants You to Know<br />
  2. 2. Software executives often find it difficult to put themselves in the same mindset as their business and finance co-workers.  Effective communication happens when the participants share a common frame of reference.<br />To the extent IT leaders and workers can discuss their work and its value in terms familiar to operations and finance executives they can transform skeptics into believers and resistance into advocacy.<br />
  3. 3. What CFOs Want<br />CFOs' top macroeconomic concerns:<br />1. Weak consumer demand<br />2. The federal government's agenda<br />3. Intense price competition<br />4. Credit markets/interest rates<br />CFOs' top internal concerns at their own companies:<br />1. Maintaining profit margins<br />2. Cost of healthcare<br />3. Difficulty forecasting results<br />4. Attracting and retaining qualified employees<br />ComputerWorld, January 24, 2011<br /><br />
  4. 4. What CFOs Want from IT<br /><ul><li>Say Goodbye to Bells And Whistles
  5. 5. Play with The Toys You Already Have
  6. 6. CFOs Like Cloud Computing
  7. 7. Know What The Business Needs Now
  8. 8. Show Me An ROI I Can Trust
  9. 9. Emphasize Short-term Benefits . . .
  10. 10. . . . But Don’t Abandon Long-term Investments</li></ul>ComputerWorld, January 24, 2011<br /><br />
  11. 11. Plan, Budget, and Measure<br />In the capital budgeting process, a company compares the rates of return of different projects and selects which projects to pursue in order to generate maximum wealth for the company's stockholders. Companies do so by considering and comparing each project’s:<br /><ul><li>Average rate of return
  12. 12. Payback period
  13. 13. Net present value (NPV)
  14. 14. Profitability index (PI)
  15. 15. Internal rate of return (IRR)</li></li></ul><li>Quantify Benefits<br />
  16. 16. You Will Get Pushback on Forecasts<br />Questions the CFO will ask:<br />How much is this going to cost? No, really, how much?<br />When will we begin to see revenue/savings from this?<br />How confident are you in what you’re telling me?<br />What risks have you considered? Realistically, how likely is it that this will cost more, take longer, not deliver the revenue/savings you’re forecasting?<br />
  17. 17. Software Development And The Time Value of Money<br />Software by Numbers – Low-Risk, High-Return Development by Mark Denne and Jane Cleland-Huang<br /><br />
  18. 18. Software Development And The Time Value of Money<br />Successful application development project<br /><br />
  19. 19. Agile Delivers Value Early And Often<br />Agile software development is designed to deliver value-added working software early and often<br />Comparing profit and breakeven points for release strategies<br /><br />
  20. 20. Agile Delivers Value Early And Often<br />
  21. 21. Agile Delivers Value Early And Often<br /><br />
  22. 22. Agile Delivers Value Early And Often<br /><br />
  23. 23. Agile Manifesto<br />
  24. 24. Agile Principles<br />Our highest priority is to satisfy the customer through early and continuous delivery of valuable software<br />Welcome changing requirements, even late in development. Agile processes harness change for the customer’s competitive advantage.<br />Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.<br />Business people and developers must work together daily throughout the project.<br />Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done.<br />The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.<br />Working software is the primary measure of progress.<br />Agile processes promote sustainable development. The sponsors, developers, and user should be able to maintain a constant pace indefinitely.<br />Continuous attention to technical excellence and good design enhances agility.<br />Simplicity—the are of maximizing the amount of work not done—is essential.<br />The best architectures, requirements, and designs emerge from self-organizing teams.<br />At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.<br />
  25. 25. Agile Software Development Performance Measures<br /><ul><li>Features delivered to production add quantifiable business value.
  26. 26. Work on features that provide highest business value soonest.
  27. 27. Deliver value in each sprint timeline.
  28. 28. Involve customers in key decisions about features in the sprint.
  29. 29. Team members work at a pace and level of effort that is sustainable over the long term.
  30. 30. Team members are accountable for their time, the quality of their code, and their contribution to the team’s success.
  31. 31. Testing coverage expands with each production release.</li>