building-an-agile-organization-a-process-guide-for-effective-collaboration

88 | CA TECHNOLOGY EXCHANGE: DISRUPTIVE TECHNOLOGIES ca.com
About the author
David Messineo is a Service
Management Practitioner with
more than 20 years of
experience developing and
deploying enterprise-level
software solutions focused on
business and IT management. As
a Senior Software Architect at
CA Technologies, he is the lead
designer for CA Clarity Playbook,
which assists organizations in
transitioning to agile style
management through strategic
planning, investment
management, benefits
realization, portfolio
rationalization, and
performance management.
David currently holds
certifications as an ITIL Service
Manager and eSCM. He is a
senior member of the Council
for Technical Excellence, a
distinguished organization
within CA whose membership
reflects the top 1% of technical
thought leaders.
Building an Agile Organization: A Process Guide for
Effective Collaboration
by David Messineo, Senior Software Architect, CA Technologies;
Patricia Genetin, Advisor, Presales, CA Technologies; Malcolm Ryder,
ITSM Strategist and Solutions Designer
Agile – A New Social Practice of Production
What does it mean to be Agile and why should we care?
Like many industry trends before it, Agile describes a mode in which business is
conducted. It reflects a form of leadership and core competency that creates an
organization built for continuous delivery. After twenty years of focusing
production improvements on tightly coupled processes like customer relationship
management (CRM) and enterprise resource planning (ERP), there is growing
need for more flexible methods that accelerate the delivery of products.
One such method is in an emerging decentralized production platform, provided
by the inexpensive delivery of information using the internet, an almost unlimited
amount of secure bandwidth, and mobile devices that provide 24x7 access to
critical resources. Sales and services are produced and provided through an ever
more complex economic network fueled by social influence. These far-reaching
environmental changes require the next evolution in organizational design for
competition, and they demand delivery of unique value to targeted communities.
While other traditional methods of business beyond that platform will continue
to apply, the environment that supports profitable markets is changing in
multiple other ways as well, at greater speeds. No longer can opportunities be
secured through three year plans (even those protected by large infrastructure
spends). No longer will capturing the anticipated needs of our customers alone
and making long term commitments to products that support these requirements
guarantee that our business will remain competitive. No longer will formal
contracts with suppliers and partners ensure the proper mix of experience
required to meet customer’s expectations (and therefore margins). And no longer
should we assume that capturing the benefits of consistent revenue streams will
be covered adequately by sustaining repeat business alone.
These consequences of environmental changes require organizations to not only
re-assess business priorities frequently and make actionable decisions faster, but
to transmit those directives across the organization in a manner where the
latency between message sent and received is approaching zero, and where
message delivery is integrated, so that priorities across organizational boundaries
can be aligned almost instantaneously. The whole point of business is to act
effectively, and therefore the organization’s culture of production must change.

About the author
Patricia Genetin is an Advisor in
the Global Presales organization
of CA Technologies. She has
over 20 years of experience in
management, software
development, operations,
auditing, and sales that help her
provide objective, insightful, and
practical guidance on how
organizations might achieve
their strategic objectives
through investments in
technology. She currently
focuses on advising clients and
sales teams on how to build
business cases that identify and
assess the potential impact
achievable through CA’s
solutions.
Patricia is a Certified Public
Accountant (CPA), passed the
Certified Information Systems
Auditor (CISA) exam in 1991,
and is qualified as an ITIL Service
Manager.
The focus of this evolution must be agility: to organize the business around
productivity in an environment of rapid ongoing change. For that evolution, we
look to Agile.
Why Agile? Simply put, because of its success in the marketplace. In product
development, where it was first embraced, Agile emerged as a best practice for
releasing new products successfully at this faster cadence. An organization that
adopts Agile as not only a means of developing products, but as a means of
organizing a culture for engaging in business, will transform itself to one where
work can be viably broken down into flexibly interacting pieces (i.e. processes are
decoupled from one another); responsibilities are managed by smaller
autonomous working cells; accountability is focused on a continually refreshed
series of anticipated benefits; and, attention to financial matters are driven by
top-to-bottom transparency of investment performance . (See Figure 1.)
Figure 1
Organizations must continuously harmonize two aspects of business: planning
and monitoring. Business Planning includes creating the right organization
structure and planning for production. Monitoring Operations includes attending
both to the staging of production and to execution.
Given the new business environment, we fundamentally acknowledge that for an
Agile approach to succeed as a means of driving productivity, individuals, inside
and outside the organization, and at all levels of an organization, must
collaborate on opportunities, commitments, contracts, and benefits to deliver
results continuously.
Deciding to embrace Agile, requires prioritizing certain issues that drive the
construction of modern organizations. These structural changes originate in both

About the author
Malcolm Ryder is an ITSM
strategist and solutions designer
who recently served as a Senior
Software Architect with the
Solutions Engineering unit in the
Enterprise Solutions and
Technology Group at CA
Technologies. His focus at CA
was in solution requirements
management for Demand
Management and Service
Portfolio Management, and with
performance management in
agile engineering. Over the past
six years, Malcolm has worked
directly with customers and
internal stakeholders to
strategically align and
implement solution components
and products in the CA portfolio
of ITSM offerings.
Prior to joining CA Technologies
he designed and managed
multiple market-leading ITSM
applications for various vendors,
serving in various capacities
including management
executive, product strategist,
and services manager.
the external pressure to perform reflected in currently observed marketplace
trends and the internal competencies that organizations are adopting to exploit
the trends.
Collectively these pressures and competencies are forming new social business
practices that both require and supply leadership. What defines a leader is not
only the degree of influence he or she has; this influence is twofold. The focus of
the influence should be on alignment and growth while also reflecting an external
view of the organization. In the social practices, the potential is there for
individuals at all levels of the organization to collectively influence how targeted
groups at various organizational levels create value for their customers, as well as
for the breadth of the leader’s reach to engage organizations and individuals
outside the company.
External Trends Driving Agile
The most notable trends include:
 Globalization and Diversity of Experience: While globalization has been a
trend for some time, and is often seen as a means of saving costs on
highly repetitive production tasks, the scope of efforts targeted to
distributed work teams has become increasingly complex. Furthermore,
after 23 years, the trend has afforded the opportunity for such resources
to become much more experienced and expensive. Additionally, because
of cultural differences in the way people are trained to think, a high
degree of diversity has entered the workplace. Such diversity of workers
has provoked and perpetuated rapid experimentation of methods to
discern what works, why, and when, making the global workforce an
experimental laboratory where the best methods make it to market. In a
sense, Agile has gone viral within the labor market, with divergent
approaches subsuming the responsibility for innovation once pioneered
by individual firms.
 Cloud Services and Content Pervasiveness: One of the biggest changes to
businesses in the past 25 years was the introduction of ERP and CRM
systems. These systems purported to optimize a business by automating
and streamlining the most critical processes in an organization. In many
respects such systems were successful and continue to be so. However, as
markets mature, sustaining profitability requires competitive companies
to get beyond streamlining, and to approach their business through
aggressive pricing and semi-personal customization of products and
services, done in a timely and rapid manner.
To support this change, cloud-based provision models have been a
significant and successful force, disrupting the economics of a company’s
conventional business model, but in exchange, providing the means for
companies to be agile themselves through the cloud’s low cost of entry,
frequent updates, and very little maintenance overhead. In the last five

years alone, cloud providers of Software as a Service (SaaS) and Platform
as a Service (PaaS) have steamrolled many traditional software
manufacturers through rapid delivery and lower up-front investments.
Moreover, cloud storage, analysis, and retrieval services are making the
availability of content pervasive across time, geography, language, format,
and most importantly context; through a network of 24x7 influences,
workers find that ‘the information I require finds me’. It is the high
availability of timely information that provides knowledge workers with
the means to collaborate effectively in an Agile environment.
 Mobility and Bring Your Own Devices (BYOD): Providing inexpensive,
reliable, and secure remote communication to individuals is one of the
greatest achievements of modern man. Such “on-demand”
communication access redefined the relationship between human
resources, the firms they work for, and the industries they engage in.
Timing, workplace options, and access to processing are all significantly
enhanced. In that light, a mobile environment can also significantly reduce
the latency involved with integrating automated and manual steps in
extended and ad hoc procedures alike. What really aligns to an Agile
capability, however, is not just mobile enablement. An Agile organization
is ultimately boundary-less; support for “bring your own devices” (BYOD)
connects the internal and external resources with the data, information,
and knowledge required to make timely decisions. Mobile
communications are now the preferred and most convenient mechanism
for knowledge workers to engage one another with the data and
information of interest. The ability of an organization to communicate
with any audience in a secure and reliable manner, regardless of their
device, is essential. Therefore, implicit in the adoption of Agile is the
supporting means for the environment to be trusted whether it is
regarding the people engaged or the information transmitted.
Figure 2

 Social Media and Networks: Both social media and social networks have
been around for some time. However, the proliferation of several high
profile communities like Facebook and LinkedIn, alongside commerce
exchanges, has changed the nature of relationships among a company’s
possible customers, suppliers, and partners. It’s not only selected people
within the company’s organizations that are tuned into one another; it’s a
blended community of internal and external parties with different
perspectives, available to anyone who can be a source or can benefit from
insights collected across it.
Importantly, tools like blogging and Twitter aggressively proliferate
content, effectively broadcasting to a market of people who willingly
pursue engagement. This significantly changes the manner in which
decisions (including plans, approvals, and evaluations, made by customers
or by providers) are disseminated. Additionally, organizing communication
into subscribe-able groups through products like Chatter tears down the
typical silos that exist within an organization. In an Agile organization,
collaboration becomes the form of the system, not just a function or
feature of it.
Internal Competencies for Adopting Agile
Aside from the mobile and cloud content platforms, other forces are modifying
organizational structures world-wide. New social practices are proving to
encourage rapid organizational innovation.
Many younger, more innovative companies rely on cultivating structure
organically to achieve success, accompanying or even replacing the traditional
command and control paradigm of older companies.
During this organizational evolution, new social forms of business practices make
challenging specific demands on internal competencies of command and control.
We will see this reflected in monitoring operations, in planning for business, and
elsewhere.
For example, "Command" mechanisms, such as for assigning responsibilities,
change to where clusters of individuals "organically" form to exercise group-level
management. Such groups share a passion, a span of expertise, raw data,
actionable information, and skills about topics.
But meanwhile, "Control" mechanisms, such as for identifying and assessing
benefits, may still be mechanically exercised in a centralized topdown manner.
Control may therefore govern the incorporation of newer social practices, both in
their scope and pace.

Over time, what emerges from an Agile approach to leadership and its effect on
controls is a focus on what is critical to supporting an organization’s capacity to
conduct and endure rapid changes in priorities. This can require new
understandings of what benefits are, as well as where they come from.
 Collaboration on Ideas: An organization simply cannot adopt an Agile
approach and succeed without collaboration between peers, be they
inside or outside the company. When business process reengineering was
in vogue, the imperative was to optimize the integration of processes so
that organizations could execute with consistency while lowering costs.
Companies would often choose whether, as a business model, their
processes should emphasize product leadership, customer intimacy, or
operational efficiency, and then monitor accordingly. Such process-level
decisions may still be appropriate for a long term benefit, but the short
term market changes require making decisions required by customers
today. Decisions aimed at predictable short-term impact also require
successful connections among other affected parties to assure that they
are working together as stakeholders in the decision.
With Agile, the collaboration of resources across the organization actively
ensures the surfacing of related ideas and their connection. Meanwhile,
the awareness developed among this grouping fosters discovery of
available experts, effectively distributing the risks of execution to those
resources best capable of mitigating them. In Agile mode, it is
collaboration that guides the division of labor to be dynamically re-
organized and re-assembled into a productive organization.
 Transparency of Investment: When organizations fail to keep their
employees informed of the rationale behind strategic investments, (e.g.
entering specific markets, partnerships, etc.), middle management and
individual contributors at the lowest impacting levels are often unable to
make the right decisions necessary for achieving targeted benefits at all
levels. Instead, proper transparency provides global visibility of which
investments will create value for an organization, where and when these
investments should be made, and how much should be invested.
Often the decisions about investments are driven top-down by cost
concerns; an organization seeks to understand its production cost
structure and find revenue streams that support those costs within a
required margin range. With Agile, decisions about investments are driven
by a detailed set of tracked opportunities available for reconsideration at
all times. Agile focuses the organization on making supporting
investments in terms of target benefits and supporting production
throughput over short periods of times, not costs and labor tied to lengthy
product cycles. Therefore, in Agile mode, an investment is typically broken
down into smaller, more manageable work requests that can be
independently prioritized and funded while remaining traceable to the

parent investment and its parent opportunity. As work proceeds, you
constantly update the priorities of these opportunities and choose as
many as possible within the limitations (resources, money, time, etc.) of
the means available. Making these opportunity decisions comes as a
result of identifying the means required to capitalize on them, which
reflects capacity more so than cost.
 Accountability of Execution: In a command and control organization,
accountability of execution often rests at the level of a line of business
manager, an EVP, etc. However, when adopting Agile, accountability must
rest with those responsible for the effort to realize benefits. This means
that accountability must be pushed down the organizational hierarchy to
where the socialization of ideas and the influence to take action is most
effective (i.e. where it has the greatest chance of success). Therefore, in
an Agile environment, defining a strategy requires that goals and
objectives descriptively reach down into the organization as specific
detailed key performance indicators, mapped simultaneously to specific
objectives and specific benefits.
Figure 3
Social Business Practices
Previously we mentioned that for Agile to enable the organization to succeed, an
organization must conduct two critical business functions simultaneously:
planning for business and monitoring operations. Each of these areas in turn has
two specific capabilities that organize the activities of an organization into an
Agile lifecycle.

The Business Planning capabilities, creating the organization and planning for
production, encourage the organization to:
 continuously plan for new business -- by identifying and selecting new
opportunities to pursue by analyzing opportunity revenue with
opportunity costs. With this, the organization increases the prospects of
generating revenue.
 target investments -- by making the appropriate commitments to
aggressively exploiting new opportunities, or further capitalizing on
existing opportunities. By organizing resources to these commitments,
management effectively avoids unnecessary costs.
The Operational Monitoring capabilities, production “staging” and production
execution, encourage the organization to:
 create and manage agreements -- between customers, suppliers, and
distributors. Streamlining delivery by soliciting fair contracts from the
right parties under manageable (and profitable) conditions lowers costs.
 comprehensively track progress and returns -- With this, and monitoring
the attainment of benefits helps protect revenue by providing an early
warning system to management.
The most important news about the organizational ability to do the above is in
the collaboration typically found with the adoption of Agile methods. The primary
purpose of the collaboration is the rapid and explicit recognition and sharing of
specific kinds of enterprise data. Collaboration will be the default mode for
planning, targeting, agreeing, and tracking, with the intent to identify and
generate predictable value rapidly.
The Executive Playbook
Success from the execution of these capabilities requires the alignment of several
common organizational processes (strategic management, investment
management, benefits management, etc.) and common operational processes
(spend management, resource management, demand management, etc.). This
alignment will be driven by agile-mode activity within each process, as well as by
guidance for the explicit sharing of specific kinds of enterprise data (goals and
objectives, initiatives, investments, etc.). Naturally, guidance and execution both
require leadership.
Managing an Agile Organization
Transforming to an Agile organization requires active leadership, particularly to
address the politics of effective collaboration. Such leadership includes two
perspectives. The first is an internal perspective, comprising the day to day
management of how resources interact with one another as a system; and the
second is an external perspective, explicitly managing the relationships to
communities of influence in the market.

Along with active leadership, Agile also requires active management, to organize
the flow of work to adapt quickly to new demands. While all organizations must
support the various responsibilities of the individual workgroups and those of
independent departments, adopting Agile requires a much better grasp of how
departments assemble their workflow to execute collectively and
interdependently as a team. Using Figure 4 as a guide, there are three primary
responsibilities that management must attend to when embracing an Agile
approach.
Figure 4
Responsibility #1: Identifying what you want and why
[STRATEGY] An organization must be capable of describing what it wants to
achieve and why. It needs to describe the method by which these desirable
outcomes will come to fruition. Describing a tactical approach to engaging in
business is often approached by documenting a set of strategic plans that
organize specific goals and objectives into key initiatives. Unlike the typical
approach, where people start by building individual strategies and later look to
align them, strategic plans in an Agile organization should be designed
collaboratively throughout the planning process. Communications should always
be aiming for alignment by pushing and pulling goals and objectives to lower
parts of the organization where specific details about what success looks like are
often lacking. In addition, planners should encourage organizational alignment of
strategy by specifically looking for commonality, consistency, and compatibility
with other goals and objectives defined throughout the organization. These two
activities of communication and comparison ultimately foster the creation of a
tree structure with a line of sight from top to bottom and alignment across the
various lines of businesses and departments.

[BENEFITS] An organization must be clear about describing success as the
anticipated outcomes and target benefits, attained over time across the
company. By identifying sets of key performance indicators that quantitatively
measure and reflect these outcomes, the company improves its ability to
organize for reduced “time to value”, a major goal of an Agile approach. As part
of this process, benefits must be communicated and further refined, as
appropriate, to have meaningful context to lower parts of the organizations. In
general most benefits should be constructed from critical success factors and tied
to one or more key performance indicators. Communicating KPI’s through a
multi-dimensional scorecard improves the communication of achieved benefits.
Collectively, individual benefits should roll-up to enterprise level benefits in the
forms of a benefit roadmap. The essential requirement of this roadmap is to state
what needs to be achieved and why the sequence of achievements is important.
[DEMAND] A robust strategy additionally brings the advantage of providing a
structure to capture demand by aligning internal goals and objectives with the
benefits expected in outside perspectives, such as those of customers, suppliers,
and distributors. In Agile mode, there is constant profiling of those activities that
will create the greatest value while acknowledging resources are always limited.
By constructing and publishing a hierarchy of goals, objectives, initiatives, and
benefits, the atomic structure of strategy points to those KPI’s that show “best”
response to demand at each level in the organization retaining explicit
relationships to all stakeholders and ultimately various top-level opportunities.
[PERFORMANCE] One of the advantages of adopting a hierarchy of goals (i.e.
effectively building a strategy hierarchy) is the ability to track the completion
status of work in business terms (i.e. benefits), and the amount of investment
consumed in achieving that level of completion (i.e. goals and objectives).
Additionally you can classify the kinds of work being conducted by type (strategic,
operational, regulatory, improvement, etc.). In Agile mode, the tree (i.e.
hierarchical) structure of the strategy definition associates smaller workgroups
and workloads to the target benefits and higher level investments. Management
can roll-up information across organizational boundaries (linked strategies) and
calculate the total investment being made in specific areas. Often, the breakout
of investments, and the amount of investment consumed can be presented in
dashboard for side by side comparison. Further, the tree structure facilitates the
identification of areas where benefits are at risk and should be evaluated for
further investment. In addition to capturing such results in scorecarding, actively
monitoring the attainment of benefits provides visibility of those resources that
are most likely capable of reducing the risks of execution across the entire
lifecycle of product and service delivery, highlighting them for future recruiting. In
Agile mode, organically building a knowledge factory by having such resources
collaborate is critical to accelerating the ability to make good business decisions
in a rapid manner or to recovering from a poor decision as quickly as possible.

Responsibility #2: Identifying how you are going to get what you want
[INVESTMENT] An organization must understand what support is required to fully
attain the benefits being sought. Often the response to this question of resources
is couched in terms of money and investments. Financial management secures
such attention and priority because it’s where most managers naturally feel the
most control; it’s simply easier to manage one’s budget than to forecast the
demand for products and services, and just as hard to forecast whether the
anticipated benefits will be realized as imagined. Such a perspective and
approach illuminates one of the biggest challenges with adopting Agile: the
certainty that appears to come from long term planning (e.g. the waterfall
development approach), versus the chaos that may result from constantly
evaluating the benefits realized against the priority of investments, and
subsequently changing course (e.g. the agile approach).
Management must first make a transition from a world of cost accounting and
budgeting to one focused on investments and throughput accounting (i.e. looking
at the actual revenue or margin as a measure of financial success rather than the
typical cost basis, which may or may not be profitable. It’s not that cost
accounting and budgeting go away, but rather we wrap these activities into
spend management, and focus on the impact of spend on investments, not on
costs. Typical investments are focused products and services. Agile needs to
account for profitability through the lens of beneficial products and services, not
just the traditional lens of costs and margins. One of the best ways to make this
transition was already alluded to when we discussed strategic planning. We need
to focus our financial processes goals, objectives, on initiatives (portfolios) and
individual investments, instead of only production processes and project
management.
One of the more important aspects of investments in an Agile environment is to
understand its similarity to mutual funds. Depending upon the mutual funds
selection, money is allocated to be invested in target areas, often by industry,
geographical coverage, and risk. Often these funds are further invested into sub-
areas to avoid being too committed to any one area and exposing the fund to
high levels of overall risk. In Agile, you allocate investments in funds, and these
funds are further broken down into smaller investments, so on, until it reaches a
level where it is assigned to a portfolio focused on specific targets (i.e. benefits).
[PORTFOLIO] As management makes a transition to investment and throughput
accounting it needs to review the manner in which ROI is used to represent
investment interest. ROI is typically calculated as an objective of a project as part
of the pre-start justification phase. But in Agile, ROI should be seen as a dynamic
indicator mainly reflecting that the decided present use of the current work
progress has beneficial impact. The notion of ROI needs to become a determinant
of quickly deciding what is important to retain within scope of production and
what is not, while avoiding unmanaged downstream consequences and waste. By
seeing performance in these terms, impacts generated from across the

organization are viewed broadly as changes and risks in capitalizing on strategic
opportunities. Constructing such a view of common interest across workloads
naturally evolves to managing collections of investments, including rationalizing
them when some work efforts are found to be effective and applicable broadly,
making other work efforts expendable or able to be re-purposed. This portfolio
perspective gives management the ability to much more quickly assess, in total,
the importance of efforts and deliverables by departments and lines of
businesses across the enterprise.
In Agile mode, actions taken locally, in the depths of the organization, are
encouraged to have significant upstream and cross-stream impact, fostering
continuous delivery of value through a series of rapid changes that explicitly
progress towards the expected benefits. ROI, in parallel with the critical success
factors articulated in the benefits roadmap, form a natural alignment tool to
connect local actions with the momentum of critical mass needed to propel the
firm in the right direction. A portfolio approach amplifies the success of taking
incremental short term steps while still keeping focus on the long term. An Agile
approach allows management to maintain a firm grasp of the investments in
time, money, attention, and resources while simultaneously empowering the
lower parts of the organization to act with greater independence than in
traditional approaches. But management can also see its resources, internal and
external, working collectively in a form of interlock of semi-autonomous pieces.
[EXPECTATION] Taking into account the impact of operations throughout an
organization, transparency also supports tracking the efficacy of a strategy over
the entire time horizon of the strategy. Greater reliance on shared or interlocking
investments means that demand is being converted into requirements. An Agile
approach encourages managers to advocate and advance specific ideas and
encourage their adoption into the plans of other supporting organizations
whether internal or external. Along with a continuous collaboration of managers
and subordinates, the cross-organizational advocacy amounts to a form of
campaigning, socializing ideas across the organization, and ultimately, where
appropriate, outside of the organization as well including customers and
partners. In this way, collaboration along with transparency (of goals and
objectives, benefits, investments, and performance) builds a selection process in
which the most useful actionable ideas are more likely adopted and appropriately
prioritized. Typically, the expectation of usefulness needs some formal support,
so part of monitoring performance must include setting service level agreements
(whether formal or informal) between key audiences that need to collaborate.
These formalizations research and further emphasize any success the parties
have had in attaining benefits through their own assignment of responsibilities
and accountabilities, while avoiding the bureaucracy of top-down command.
Setting expectations with this inherent type of alignment encourages the
acceptance of offered products and services in an almost viral manner.

[SPEND] The focus on investments does not diminish the need to manage
budgets, however. Investment funds are not the same as cost centers. Cost
centers generally focus on specific lines of responsibility, not the entire chain of
activities required to measure the effectiveness of attaining benefits, nor the
end-to-end activities required to build and release a product. Through the
management of portfolios, investments are expected to take a much broader
perspective, while spend management is generally more focused around tasks
and earmarked to activity costs consumed by individual departments. Adopting
an Agile approach should not imply that tracking one is more or less important
than the other. The uses of each depends upon the decisions under
consideration, with investments having a heavy bias towards strategic planning
and benefits and spend focus on individual investments or resource skills. It
should also be noted that tracking spend is critical to rolling up data for purposes
of tracking how much investment has been consumed, how much remains, and
what is the variance between planned and actual.
Responsibility #3: Identifying what resources will be, or are being, used to
achieve success
The four areas that comprise Responsibility #3 must closely align their activities
to achieve one simple goal: To find the best resources and deploy them
continuously.
[SOURCING] Critical to any business is the sourcing of resources. Whether
adopting Agile or not, finding competent skills and capabilities at an affordable
rate is essential to a profitable business. What Agile does, however, is place
structural burdens on management to find partners that have an operating model
with the degree of flexibility required to augment the methods of production
embraced internally. In this scenario, a suitable partner is likely one that could
participate in the strategic processes outlined above. They would be able share
goals and objectives, and easily piggyback on existing initiatives. The benefits they
anticipate could be tracked alongside the ones of the internal organization. In
fact, a compelling aspect of Agile is the notion of having a shared benefits
roadmap. The key difference, of course, is the nature in which the commitments
made among partners must be managed from a legal point of view. If the
contracts don’t easily support the need for accommodating change, or require
lengthy lead times, or don’t significantly reduce the risk of having the right
resources available, extreme caution should be applied. A chain is only as strong
as it weakest link; one wrong supplier could introduce a serious risk to being
successful.
[CATALOG] Every business has a catalog of products, physical assets or intangible
services, or both. Products reflect the output of an organization, based on the
orchestration of processes that design and deliver solutions. Therefore, from an
Agile perspective, production planning must lead to placing the right “stuff” into
the organization’s catalog. It’s the approach and cadence of finding the right
“stuff” that quickly, through rapid response and adaptation, that separates Agile

from other approaches. Specifically an Agile approach should focus on the
following:
 Linking products directly to strategy (goals, objectives). From an external
perspective, the product’s features are aligned and constantly re-
prioritized, with markets the business serves or is pursuing. From an
internal perspective the product’s features align with the requirements
for staging production. Additionally, “Products” must support the pricing
and delivery structure compatible with the production capability (i.e.
productivity) of the organization.
 Linking products directly to benefits. The benefits attained by customer
adopting the product are clearly identified and tracked throughout the
entire strategic horizon and across the entire benefit roadmap.
 Linking products directly to and investments (initiatives). The rationale for
attention priority and investment commitment for manufacturing the
product is clear for all stakeholders, along with specific measures of
financial success to determine whether further investment is warranted.
 Linking products directly to demand. The product’s availability and
capacity to accommodate changes is matching actual or anticipated
demand.
 Linking products directly to performance. The product’s performance is
tracked and benchmarked, at a granular level consistent with the rapid
planning cycles encouraged by Agile, across all levels of the organization.
Feedback is critical to identifying and understanding the nature of changes
for products to be successful.
[RESOURCE] When we talked about sourcing, we referred to the ability to get the
appropriate resources when needed. When we talk about resourcing, we’re
describing the manner in which resources are actually assigned to work, as
described in terms of an investment from the strategic perspective. Whereas
sourcing is focused on investment in production capacity, resourcing focuses on
the costs of engaging in the production process itself. Agile was effectively born
out of a need to improve the distribution of assignments to resources, and limit
the risks of taking on projects with lengthy production cycles. In particular Agile
helps to encourage an organization to adopt the following:
 Organize work around manageable units that can be independently
scoped and prioritized
 Encourage collaboration of work activities by all stakeholders throughout
the process of design and production
 Increase resource availability by assigning work in smaller increments that
reflects the priority of the organization with the resources available
 Break down the delivery of products, if possible, into incremental
enhancements that can be easily scoped, prioritized, and resourced

[WORK] Ultimately, an organization’s productivity and effectiveness is measured
through the successful delivery of work products. From an Agile perspective, we
need to focus on the following:
 Breaking work demands down into manageable pieces that allow for
independent assessment
 Leverage the advantages of the resourcing process by assigning and
measuring work in an incremental manner
 Defining the criteria used to define key performance indicators, as well as
the appropriate tracking of results, to encourage constant review of
priority and investment decisions
 Linking the delivery of work products with the completion of critical
success factors
 Encouraging a forum of collaboration that is broad enough to support
internal and external communities
Adopting best practices and standards in Agile approaches (Scrum, etc.)
Connecting External Trends with Internal Competencies
We started the conversation about Agile with identifying four external trends that
are placing pressures on organizations to find faster ways of delivering products.
In particular, these pressures have a heavy influence on the way the
aforementioned responsibilities are covered.
The globalization and diversity of experience can play a significant role in defining
a strategic plan. There are many possible markets to pursue, and many different
approaches that can be exploited to organize the production process. Having the
ability to collaborate with an experienced community is one way to ensure the
goals and objectives defined have the breadth and depth to be complete while
simultaneously covering various options that may need to be considered in the
future. Globalization also provides better sourcing alternatives by partnering with
firms that have the ability to experiment with minimal risk. Creating the right
commitments and contracts with communities of influence is paramount to
success. Just as important as the experience of producing products is that of
defining what the anticipated benefits should look like. Often the wrong
measurements are put in place and obvious opportunities are lost.
Combining mobility though BYOD with cloud services and content can have a
huge impact on your business. Agile encourages an ecosystem founded on the
collaboration of ideas, whether inside or outside the organization. By using the
techniques described above, Agile helps an individual or organization quickly
assess a particular situation, understand its impact, and design an actionable plan
with minimal disruption. The ability to access resources anywhere anytime is
critical, but so is the ability to send messages in a form that can be immediately
interpreted and responded to. Having access to content, whether it is a database
of sales figures, the investments made to secure a contract with a customer, or
the spend captured in supporting a legacy architecture, allows stakeholders to
review the information, in his or her specific context and allows them to properly
assess the priority of a response. Content also provides the means to make better

decisions through observations of which techniques perform better. When
combined with the ability of diversity to encourage different approaches, best
practices can be identified and shared.
Finally, social media and networks are changing the nature of production design
and delivery simply because of how influential specific members or groups of
members can be throughout the lifecycle of a product. Specifically having the
right interactions with community of interest facilitates an Agile approach in the
following ways:
 A collection of people to provide recommendations and feedback on
product design
 A diversity of expertise to help optimize the delivery of products
 A forum to discuss the various components of the executive playbook
 A recognized establishment of expertise to validate plans
 A channel for collaborating with partners, suppliers and customers
Modeling transparency under Agile
Strategy, much like a map, provides the description of important positions to
recognize and to take, which will allow action to progress towards goals. As a
navigational device, the strategy assumes that there will be an ability to detect
actual positions, measure the difference between positions, and track both the
historical and planned movement from one position to another. Based on the
awareness provided by that ability, appropriate decisions can be made regarding
how to proceed at any point in time, including decisions about whether to change
course in order to improve the progress towards the goal.
Management, in general, strongly occupies itself with the issue of making
changes. The emphasis is equally on what to do about intentional directed
change and about incidental actual change.
Business intelligence provides visibility of the factors that are most important to
making management decisions about change, particularly about whether the
observable changes are good, bad, or benign.
A framework can be constructed to show how management organizes the factors
recognized as supporting or constraining the progress of change towards goals.
The interaction of the recognized factors makes up the complex organizational
formula that produces progress, and consulting the framework assures that the
important factors are given adequate attention, in order to promote their proper
impact in the desired interactions. This is why we generally see frameworks as an
illustration of architecture, from which we gain confidence. They explain how a
structure is organized to support and cause intended states and outcomes. In this
case, it is the structure of significant actions and events that allows their co-
presence and interdependencies to result in progress.

To make the business intelligence most useful, we focus its attention on a defined
set of intensive actions that need to be conducted but need to be aligned to
avoid inhibiting each other. Their alignment includes having them co-operate
wherever their influence meets, and logically distributing their responsibilities for
the overall range of interests among their group. In effect, the idea is to prescribe
their teamwork and the formation that supports it, which in action we then
closely watch and evaluate through intelligence gathering. This means that there
is a model for the intelligence gathering and for the presentation of its analyses
and findings.
The subject of the model is productivity. For any business, the model will pursue
an alignment of key activity areas that balances a cooperation of teams with
distribution of responsibilities and authorities, resulting in productivity.
Each of the key activity areas is distinguished as something that has direct
management but that has influence or interdependencies with other areas. In the
agile organization’s model, the direct management of groups is much more self-
management, and the modes of influence and interdependency are largely driven
by collaboration.
In general, the business is managing the support and activity of four essentials of
business health. The descriptions of these essentials exposes that they are
fundamentally interdependent:
 Opportunities – selected for the business from a larger pool of market or
industry conditions, according to desirability, sustainability and necessity
 Commitments – directing the resources of the organization at the
opportunities, with priorities and urgencies, which consumes the
resources
 Contracts – mitigating risks to the capacity and availability of resources
assigned to the commitments
 Benefits – recognizing and distributing the positive outcomes of the
efforts made to pursue the opportunities, as enabled by the commitments
and contracts, and as reused to sustain the opportunities
Under independent management, these essentials will react differently to real-
world influences, yet separated from the others they prove unable to move the
whole business towards the goal. Consequently, they must be rationalized to
assure that their actions are aligned to the same greater purpose, and they must
be synchronized to generate their related impacts together. Overall, this becomes
the throughput underlying the business productivity.
These essentials should have a greater probability of success when other more
detailed areas of management provide and maintain a focus on what role needs
to be filled to support or enable them. But this will be true only if they can be
tuned to promote the required alignments. (See Figure 5.)

The purpose of the business intelligence is to maintain visibility of the
appropriate specificity of activities, events and outcomes needed to confirm that
the management areas are tuned correctly for overall success. This holistic
perspective on the operational health of the business is joined by the intent to
expose relevant information in a timely enough fashion to assure that changes
are effectively managed. To capture and communicate this perspective, the
information processing is given a model.
Typically, an effective model is derived from a higher-level framework. In our
case, the key framework is based on the need to navigate the map provided by
strategy. While strategy provides guidance, it is still just a proposal for action and
does not cause progress. Real action occurs as processes are conducted to enable
the organization to move towards the goal. Progress appears as the key positions
in the strategy’s pathway are successively acquired.
The awareness promoted by modeled business intelligence will logically associate
the characteristics of business essentials with the way the business has chosen in
particular to act. Normally this association is seen in the relationship between
strategy and tactics. The emphasis is on being able to communicate and validate
the proposed or expected, versus the actual. The findings then drive decisions
about what, if anything, managers should change. To make the change, managers
alter the current characteristics of the business essentials.
Figure 5
With that purpose in mind, the framework for the intelligence model will have
dimensions describing what should be identified for change, and why.

As an example, the framework would be a table cross-referencing the “defined”
business health as proposed (columns) and the “actual” business health (rows) as
observably operated (rows). This will normally call out aspects of the business
that already have name recognition and supervision, and that are directly subject
to change.
Opportunities Commitments Contracts Benefits
Risks Gaps in current
goals vs.
conditions
Requirements Strategic
positions
Current plans
and allocations
Resources Sources Funds Actual
resourcing and
capacity
provided
Actions Capabilities Methods Assignments Confirmed
consumption
and progress to
date
Outcomes Market
Presence
Products and
Services to be
used
Structural
Investments
Work Outputs
Based on what the framework reveals, the business then proceeds to perform the
navigation – in what is now commonly referred to as “operationalizing the
strategy”. This navigation naturally includes having visibility to the necessary
factors at the right level of detail for the involved stakeholders.
 Opportunities: risk of pursuing or not pursuing
- Identify significant gaps
 Benefits
 Strategy
 Finances
 Commitments: justified decisions (business requirements now to be met)
to consume resources in a certain manner
- Identify decided positions
 Objectives
 Initiatives
 Funding
 Contracts: both internal and external agreements to act in accordance
with certain targets and thresholds
- Identify operational readiness
 Capacity
 Budgets
 Performance targets

 Benefits: recognition and adoption of both intended and unintended
outcomes, according to their alignment to goals
- Identify actual versus intended results
 Variances from planned outputs
 Dollar balances
 Work completion status
To control this operationalization, management applies consistent logic through a
continual repeating sequence of evaluating and enacting change:
 What to change?
 What to change to?
 How to change?
 Change completed?
 Change successful?
The tail end of the sequence, which grades the business health, re-assesses the
current state against the state desired by the strategy, forming a continuous cycle
of managed transformation. (See Figure 7.)
Figure 7

As managers, being able to apply the change process in terms of the framework
means that there is a high level of confidence that the differences directly
address the operational health of the business, which is a prerequisite to
achieving goals. Consequently, the normal daily management reporting on
current states can valuably be biased towards representing the change-related
issues.
The business intelligence model provides the design pattern for dashboarding
and monitoring in a way that delivers comprehensive logical traceability of actual
states to planned strategy. A reporting capability closely aligned to the
management process is available from the outputs of business intelligence.
The intelligence model then guides fact-finding to answer the myriad questions
that management needs to consider at any given time. (See Figure 8.)
Figure 8

The operational intelligence supplied through the guidance of a framework and
the consistency of a model shapes communications across organizational
boundaries, making the enormous availability of cross-boundary information an
asset instead of a liability.
However, management cannot just assume that reliable identification of
requirements and actions will cause the right things to occur going forward.
Planning and monitoring make sense only because there is a presumption of
capability underlying most decisions. The most important related aspect of the
Agile mode is its focus on linking capability directly to time-sensitive objectives.
Extending from that are key characteristics of the work effort that represents
some methods in the capability. That functional aspect requires a supporting
organizational form created through management’s leadership and governance.
Agile Transformation
Re-organizing to run in Agile mode involves deploying supportive combinations of
people, processes, and systems. Forming and implementing those combinations
requires a significant and very determined campaign of managed change. For the
campaign to be successful, its proposed future state must identify an alignment
that is clearly meaningful as a difference from the current state. The alignment
itself must be seen as a more likely enabler of goals than is the current
organization. And the difference being pursued is an improvement in the degree
of overall organizational capability to meet goals.
That picture is represented by a model of capability maturation. In Agile mode:
collaboration, linkage to high-level objectives, right-sizing, and high transparency
are all characteristics of both the work done to transform to the higher capability
and, with the achieved capability, the work done for the business. (See Table.)

Capability
Description
Using Agile behavior to
identify target benefits;
when Agile behavior
was used, artifact looks
like XYZ
do strategy; when Agile
behavior was used,
artifact looks like XYZ
make investments;
when Agile behavior
was used, artifact looks
like XYZ
4
Good enough
to cause
others to
follow your
lead
- Incremental benefits
organized as roadmap
- Benefits tracked to full
realization
- Balanced scorecard
grades results
- Benefit chain tracked
by customer
- Shared goals across
line of business
- Collaboration extends
to external partners
- Incremental objectives
tracked by benefit
- Roll-up of business
viability to leadership
- Return on goals and
benefits tracked
- Profitability of product
portfolio tracked
- Investments roll-up to
leadership
- Investments
opportunities identified
3
Doing the
right things
preventively
and including
best practices
- Benefits attached to
strategic goals
- Accountability to
attain benefits
identified
- Collaboration on
benefits across areas
- Investments in
benefits tracked
- Strategies linked
through shared goals
- Sub goals focused on
smaller deliverables
- Roll-up of overall
strategy performance
- Investments in goals
tracked
- Sourcing partnerships
to meet goals
- Shared investment
funds
- Initiatives shared
across lines of business
- Portfolio
rationalization sets
priorities
2
Able to do
some
remediation
but still not
across the
board nor
consistently
- Top level benefits
identified
- Collaboration of
benefits top-down
- Business KPI's
identified
- Links between CSF and
KPI's
- Goals based on key
business drivers
- Collaboration of goals
top-down
- Objectives linked to
investment KPI
- Products identified
and linked to goals
- Investment Funds tied
to initiatives
- Initiatives tied to
critical success factors
- Spending targets and
actuals tracked
- Work decomposed
into incremental sets
1
Aware of
problem (can
identify it) but
can’t solve it
- Benefits limited to
local groups
- Performance KPI's
identified
- Relationship between
benefits limited
- Critical success factors
identified
- Goals and supporting
objectives identified
- Strategy siloed but
competing priorities
- Goals defined through
chain of command
- Limited performance
tracking
- Investment tied to
goals at local level
- Investments organized
into initiatives
- Costs tracked as part
of spend
- Resources managed as
part of projects
0
Not aware
there is a
problem
- No strategic benefits
identified
- Benefits limited to
single investments
- Limited metrics
inconsistently collected
- Limit understanding of
work/result ratio
- Strategy is
unstructured and siloed
- High level goals
minimally identified
- Unplanned work /
inconsistent execution
- Resources scheduled
ad-hoc
- Investments identified
at local level
- Limited justification for
investments
- Priority based on
departmental visibility
- Focus is on cost
tracking

Making Deliberate Investments
The influence of external technology in the marketplace is one of the major
pressures on the organization to become agile. Internally, technology is integral
to most businesses today and is mainly expected to provide speed and agility to
improve the economic results of the organization. Improved collaboration and
communication across the organization and its operations will improve
understanding of where and how value is achieved. Technologists have
specialized expertise that provides critical input to evaluations of new ideas,
plans, and mechanisms for executing with technology, and this is clearly part of
any organizational redesign. Therefore IT often plays a critical role in both the
determination of investments, and the success of adopting an Agile approach to
management.
But IT leaders, who decide IT activities, must still provide the business with the
understanding of how IT really delivers economic value to the business. IT itself
will be a location of value generation, both by facilitating collaboration and
communication, and by having the improved understanding will throw more light
on how IT can best be used. In short, re-organizing IT for agile business
operations should mean that IT will wind up strengthening both its own business
case and the discovery of its case.
Normally, from the business perspective, funds are limited, making tradeoff
decisions imperative. These decisions set limits on investments in technology. The
challenge is to get these limits to a level that assures IT benefits of a type that
improves competitive productivity. IT leaders and business technologists must
model the way the overall organization manages its way to IT benefits.
But what are IT benefits? An essential and simple understanding to have is that
the purpose of IT is to facilitate work. Any unit of work, whether it is an initiative,
a project, a sprint, or something else that requires financial approval should be
evaluated based on its criticality (going in) or impact (coming out) to a business
strategy. The point of IT is to make that criticality or impact productive. That
success makes the work beneficial.
Generally, economic benefits of work fall into one of four main quantifiable
categories. These include: increased revenue, revenue protection, reduced
costs, or cost avoidance. Any one project or initiative will likely encompass more
than one of these impact areas, but for ease of explanation, let’s address them
separately while identifying how IT is involved.
Increased Revenue
The current market environment indicates that in order to competitively increase
revenue, the business needs to be very good at its differentiation. IT needs to
determine what critical work makes that happen and how to enable that work.
When evaluating the potential for increased revenue, the more directly the IT
service is associated to the revenue producing activity, the easier it will be to

assess the impact. These might be offerings from IT to improve support,
efficiency or effectiveness, or for even greater impact, these might even be new
products or services that the organization can offer to its customers. For example,
as a direct contribution to increasing revenue, the usage of a web application to
sell products on-line will be easily assessed by measuring sales volumes.
But normally, forecasting the potential revenue is requested in advance of
embarking on developing IT such as the web application. A forecast is especially
important when introducing a new business, product or service, and in this case
much more research is required to make plausible estimates. While there is
usually a sales forecasting function in most businesses operations, forecasting
isn’t an exact science. Analysts will compile assumptions and updates about the
market and how revenue will be attained. Over time, helped by using some IT,
information quality is discerned and intelligence improved to make for better
forecasts.
 In Agile mode this information management has a wide breadth of inputs
and fast access to expertise through social practices.
In planning the business, specific sales metrics are identified and forecasted by
business operations, then used in assessing the importance or priority of funding
a supporting IT effort. IT managers must formulate and communicate a plan of
how resources will be needed to realize the particular operation (including
products and services) intended for meeting the forecast. From that, the request
for approval proposes relevant costs, quantities, and timelines, of
implementation and for ongoing support and operations after implementation.
 In Agile mode, resources are recruited from across the organization to
cooperate. If the work effort is initiated, regular interaction and
collaboration will help you keep aligned with business plans and prepared
to adjust your efforts as forecasts change.
 The IT plan explains both direct and indirect IT impacts that promote
work-effort benefits.
 The plan itself provides transparency that cultivates credibility
encouraging approval.
 Credibility helps the approval of limits that actually help production
instead of restraining it. Credibility outweighs accuracy in forecasting,
because business approvers need to know that if facts change they can
still trust the accountable parties to handle things correctly. Meanwhile,
credibility is enhanced when you can share ‘what if’ scenarios and
determine where even with most conservative investment level estimates
such as ‘worst case’, or ‘at a minimum’, an implementation still does what
it must for the business.

Cost Avoidance
Avoiding costs requires a pro-active approach, making choices that have already
been weighed against alternatives. Comparative criteria need to lead to decisions
that will be followed and enforceable.
Without explicit criteria and adherence, costs are easily incurred that could
otherwise be avoided, largely through the aftereffects of unplanned conditions
and activity. For example, we may be aware of technology that would allow us to
reduce outages and improve availability of our systems and applications. If
implemented, costs of time spent in triage troubleshooting the root cause of
incidents and problems could be avoided. Or, we might be aware that there are
software solutions that would enable increased usage of storage, or reuse of IT
assets.
For the IT organization, getting a decision made to implement some of these
could enable it to avoid planned purchases of other additional storage or assets.
Further, automating any business processes that are currently done manually
would enable avoidance of labor costs. Immediately following the decision,
there’s no longer a need to budget for other unnecessary current or future
resources. Finance decision-makers usually like these types of investments as the
adjustments are considered ‘hard-dollar’ savings against the potential size of the
budget.
 In Agile mode, the effectiveness of various options is always defined in
terms of particular target outcomes regardless of whether the selected
option is also capable of generating other effects. Meanwhile, strong
attention is given to the practicality and difficulty of sharing a selected
solution for multiple purposes versus relying on single-purpose solutions.

In planning the business, identifying opportunities for cost avoidance requires
awareness of how resources are being used. Insight to available capacity of
hardware, software, and people, along with visibility of how and for what
purpose each is in use, enables tighter management control and ability to plan
and prioritize how and when existing resources are used.
Given time constraints, determining whether you make investments to achieve
cost avoidance and thereby improve the efficiency or effectiveness of operations,
or whether you undertake other projects, should be decided based on
prioritizations, expected benefits, and potential risks, determined in collaboration
with business units or executives funding these efforts.
Reduced Costs
In recent years cost reduction has received extremely high attention amongst
different types of financial impact. But business does not run on costs. Business
runs on capacity, and the cost of providing capacity is managed. Business costs
are reduced mainly when work efforts do not exceed the methods needed to gain
the required outputs.
Since methods are executed through resources, it is normal to see resource
reduction as a way to lower the cost of methods. But resource reduction should
be replaced by moving work to more efficient resources. Said differently, better
allocation of work to production capacity makes cost more effective. But this can
result both in different resources and different methods, which explains,
respectively, the importance of alternative providers and automation.
As a strategy for improving ‘the bottom line’, a problem with the conventional
view on cost management is that CIOs have typically been expected to assess
costs in terms of Accounting’s chart-of-accounts, for example, tallying total labor,
hardware, software, or facilities expense. The IT organization must show how
capacity is derived from the interaction of these elements; otherwise, reducing
“expensive” elements can invalidate the methods that had been generating the
outputs necessary for the business.
 In Agile mode, production methods are always formed as a strong
alignment of resource types to short-term objectives within a business
scope of requirements.

In monitoring operations, IT costs are therefore best presented as a supporting
factor in business costs. For example, where IT budgets must be cut X%, much
better results will be realized when managers have and use the visibility of
services to the business and their associated costs. When decisions are made to
reduce or eliminate resources responsible for particular services, there’s better
upfront understanding of the probable resulting impact on the business.
Properly assessing alternatives is complex or not even possible if you aren’t
maintaining cost information on a per service basis. This includes costs and
coordination of providers as well as of automated systems. Contracts and service
level agreements formulate the way that IT costs will be predictable components
of business costs.
 In Agile mode, communication across organizations and workgroups is
typical in planning work efforts and methods. Alternatives, best practices,
and innovations come to light more frequently for consideration.
Collaboration brings group awareness into the setup and review of
required work
 Expectations are set with stakeholders, and joint-decisions can be made
to direct reductions to where they make the most sense (least negative
impact to the bottom line or organizational goals).
 IT customers are less likely to proceed expecting IT to take budget cuts yet
carry on as it did before, just ‘doing more with less’.
More importantly, IT costs may be critical to creating conditions in which business
costs are lower, by assuring that the business can take advantage of less
expensive opportunities offered through timing, communication, partnering, or
other operational factors.
Revenue Protection
When benefits exceed costs, there is a positive return on investment (ROI). The
key issue however, is to assure that benefits are being generated in synch with
the pace of revenue opportunities. This means that outcomes are consistently
identified and are continually associated to the identified intended opportunities.
In this manner the dynamics of revenue protection are the same as those for
positive ROI.

The IT organization can support efforts to protect revenue by understanding
where risks of losing existing revenue might exist and, in these circumstances,
ensuring good communication with the business to share that knowledge and
regain or rebuild alignment.
 In Agile mode, IT is collaborating with business leaders to determine how
to prioritize and schedule specified efforts.
In monitoring operations, these efforts, including technology-driven ones, might
be identified through awareness of new trends already in effect such as mobility
and the popularity of social media and networks, attention to changes in risks
due to economic or security threats;, or new regulations.
Evaluating trends is one of the best ways to identify and describe plausible
scenarios for opportunities and threats and estimate their potential economic
impacts. Investments in these circumstances are justified with metrics estimating
how much revenue might be lost if nothing is done differently in the face of those
circumstances.
Identifying Return on Investment
In light of any known alternatives, IT proposals and approvals are of course
competitive with each other. In the past, most technology investments have
required large sums of upfront cash. Organization’s made these investments,
expecting and aware that benefits would be arriving over the next 3-5 or more
years due to the expected impacts of the affected operations. Quantified
assessment of the presumed value of an investment relies on the ability to
predict probability of benefits from impacts, and to calculate financial metrics
comparing dollar inputs to the dollar value of opportunity gained or sustained.
In IT tracking and proposals, these quantitative findings should be gathered along
with projected qualitative benefits into an always-updated business case for
easier communication and assessment by those responsible for review and
approval. For example, in this way, improving understanding of the business’s
service cost structure will equip management to determine the best sourcing
options on demand, including buy versus build approaches, and internal versus
external providers.
To maintain the presentation of the current business case, tools for portfolio
analysis and project selection support our ability to assess IT impact and value,
both in predicted and actual versions. It is essential to prioritize the IT support of

business efforts through analysis of IT impact on business cost versus business
benefit, along with analysis of risks to stability or continuity during the window of
time-to-value. In Agile mode, these tools help to utilize the availability of more
accurate information and forecasts from which in particular to base our decisions
about the scope, sizing, and timing of IT effort.
Conclusion
Our discussion has been wide ranging, but the storyline is straightforward in
summary.
The Problem
Thanks to the internet, mobility, and new media, information flow from point A
to point B traces paths that increasingly exceed conventional boundaries of the
company.
These diminishing boundaries include culture, time, and geography; additionally
they include roles such as customer, supplier, and manager. At the same time,
social diversity has become an unavoidable factor in the prospects and behaviors
of businesses.
The result of this new complexity is that the mix of offerings, requirements, and
expectations in the marketplace are obsoleting the conventional pacing and
definitions on which companies had designed their organizations to rely for
production. Competitive production now means continual delivery with the
flexibility to rapidly discover and adjust to changing market opportunities,
regardless of prior status and branding.
Solution: The Agile Organizational Structure
The operational agility required for such production and competitive productivity
requires an appropriate design of the organization itself, both in structural terms
and in functional terms.
With the appropriate design, the company will be able to position itself to:
 Capture the cross-currents of information
 Rapidly map the findings to formations of capacity
 Mobilize action for sustainable usable outputs in a short time frame of
delivery
This means that the overall capability must have alignment throughout the
structure of the organization, yet not be rigid. The alignment will be more
behavioral than mechanical, and is profoundly affected by collaboration.

The Agile Design
The Agile method, derived from engineering, provides the principles and example
needed for this crucial reorganization. In the world of engineering, Agile arrived
as the top methodology for optimizing production to rapid delivery. Underlying
that methodology, Agile emphasizes the principle of:
 Doing “enough for now” to reach adequate levels of value
 Not forfeiting the ability to change course where external factors next
indicated that requirements for value had changed
Taking a lesson from that approach, the design of larger organizations, facing
ubiquitous information and social diversity, should pursue ways to do the
following under the Agile principles:
 Collect and filter input from blended internal and external sources
 Form a consensus view on delivery priorities
 Subscribe high-quality resources to shorter-term commitments
For executing the design, leaders will need to adopt those objectives, as well as to
discover and champion the relevant effective techniques both in their own
practice of leadership and by other stakeholders and roles.
Being Agile
In a pervasively implemented alignment, change will be expected, proactive, and
authorized at most levels of the organization. But this will still be managed by
classic management practices that will have adapted to that purpose:
 Strategy will define and communicate the evident requirements,
translated across the entire chain of production including plans,
assignments, and evaluation
 Investments will focus portfolio-style on segmented types of benefits and
their linked supporting levels of effort
 Operational value will be defined primarily as functional contributions
To realize capability from the alignment:
 Collaboration will be the technique for capturing the cross-currents and
triaging findings into plans
 Modeling will translate the findings into measurable terms of capacity and
operation
 A continual feedback system will provide the insight needed for effective
validation, change and improvement

The Economics of Agile
The business case for this organizational redesign per Agile highlights the fact
that Agile systemically supports four significant financial impacts already pursued
diligently by the business:
 Increasing revenue
 Avoiding cost
 Reducing cost
 Protecting revenue
There are, of course, costs to adopting Agile that should not be ignored.
However, the accompanying plans for transformation to enable these effects in
Agile mode feature a graduated adoption to future states in a model of strategic
maturation. Organizations should use the maturity model to identify where
existing behaviors and opportunities are most likely to be available for anchoring
the transformation. In the same model, managers should be able to spot new
behaviors and opportunities that need to be developed. The model guides
collaborative attainment of sustainable alignment supporting the organizational
design for productivity in the new business environment.

Connect with CA Technologies at ca.com
Agility Made Possible: The CA Technologies Advantage
CA Technologies (NASDAQ: CA) provides IT management solutions that help
customers manage and secure complex IT environments to support agile business
services. Organizations leverage CA Technologies software and SaaS solutions to
accelerate innovation, transform infrastructure and secure data and identities,
from the data center to the cloud. CA Technologies is committed to ensuring our
customers achieve their desired outcomes and expected business value through
the use of our technology. To learn more about our customer success programs,
visit ca.com/customer-success. For more information about CA Technologies go
to ca.com.
Copyright © 2013 CA. All rights reserved. All trademarks, trade names, service marks and logos referenced
herein belong to their respective companies. IT Infrastructure Library is a registered trademark of the Central
Computer and Telecommunications Agency which is now part of the Office of Government Commerce. ITIL is
a registered trademark, and a registered community trademark of the Office of Government Commerce, and
is registered in the U.S. Patent and Trademark Office.
The information in this publication could include typographical errors or technical inaccuracies, and CA, Inc.
(“CA”) and the authors assume no responsibility for its accuracy or completeness. The statements and
opinions expressed in this publication are those of the authors and are not necessarily those of CA.
Certain information in this publication may outline CA’s general product direction. However, CA may make
modifications to any CA product, software program, service, method or procedure described in this
publication at any time without notice, and the development, release and timing of any features or
functionality described in this publication remain at CA’s sole discretion. CA will support only the referenced
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