Scrum Costing: Metric Reasoning in an Agile Age aka Book It Daniel

Scrum Costing
Metric Reasoning in an Agile Age
Book It Daniel

Book It Daniel
Team Dialogue on this subject is always called: Book It Daniel
Conversion
Gets Booked!
9/22/2020 Brij Consulting, Jean Marshall
2

Overview
• Digital Assets such as Portal Arrangements need to
be booked, funded and recorded as an agile based
product available to customers as a replacement
for brick and mortar assets
• An established industry norm comes to the topic
as a recognized need at the level of all practical
developer work on this kind of arrangement
• The Scrum Master in particular, quickly becomes
more of a Kanban producer at the Production
Management Level of Industry, through education
and observation at the practice level.
• Many topics of a complex technical arrangement
come into the arrangement including intellectual
properties not fully actualized in the past.
Topic One: Introduction to the Agile World of Portal Asset Production
Topic Two: Basic Practice of Recording Scrum Labor
Topic Three: What Kind of Reporting is Required at the Project Level?
Our Portal is an
Assembly of one or
more stores
Or a relational supply chain service
9/22/2020 Brij Consulting, Jean Marshall 3

Vocabulary
What is Conversion?
Conversion costs is a term used in cost accounting that represents
the combination of direct labor costs and product related overhead costs. In
other words, conversion costs are a product or production costs other than the
cost of a product's direct materials.
An important topic in Conversion and Equity Relationship is Ownership and
Intellectual Property Type
What results from Conversion?
Value Added to the Business becomes the Portfolio equation to update Long-
term Business Capital known as Equity. This results in the ROI measure.
What types of Conversion are there?
There are three successive types: 1. Sales Conversion 2. Asset Conversion 3.
Equity Conversion all resulting from Supply Chain Relationships associated
with Product Management
A Revenue Producing
Portal is a Company
Product that can be
“leased” to a customer
or vendor on a
subscriber basis, or
arranged through
customer service
management of stores
From Map
It, Ralph
(Available
Later)

Topic One
Introduction to the
Agile World of Portal
Asset Production

GAAP
REQUIREMENT
Capitalization of
revenue producing
portal assets (leasehold
improvement)
Section 3350: Internal-use Software
[U.S. GAAP before the Codification]
350-40 Internal-use software
AICPA SOP 98-1, Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use
1. Three stages to develop software
(1) Preliminary project stage
(2) Application development stage
(3) Post-implementation/operation stage
2. Preliminary project stage
--> Costs are expensed as incurred
3. Application development stage
--> Costs to develop internal-use software
--> during the application development stage
--> are capitalized
4. Post-implementation/operation stage
--> Costs are expensed as incurred
5. Upgrades and enhancements to software
--> Costs may be capitalized
--> if "additional functionality" is added
6. Capitalized software costs
--> are amortized on a "straight line" basis
--> over the estimated useful life
and
--> should be reviewed for impairment
Suggest: Asset Amortization over 17-
year life (see our note slide 31)

Producing an
Asset
generates
Revenue
• Self-Constructed Assets have two imposed values: upgrade and maintenance
• Normally a simple equation of Material, Labor and Overhead at Standard
Costing within a waterfall-based project would result in a value that would
then be adjusted to the Lower of Cost or Market and subsequent carrying
value would be established
• The project is collecting cost in an account called Construction in Progress and
is later booked into Fixed Assets, often as a Leasehold improvement to its
Plant.
• Funding is also essential to the completion of the product. And within its
banking relationship, must be established as serviceable and either leased
back to the bank or purchased outright in a lending package. It must be PAID
FOR in a purchase accounting transaction.
• When a project is a self-constructed asset because ownership of a client
service is maintained for it, it can be booked as a long-term capital asset on
the service provider’s books and the customer subscribes to the service.
Companies like General Electric who are used to booking long term projects
often have their own inhouse Capital companies sponsoring these lending
activities and allowing them to book inhouse the entire supply chain project.
• The key elements here are: Make vs. Buy, Equity-based Ownership, Purchase
Accounting, Cost Valuation, Revenue Recognition and the Capital Funding of
Stakeholder Projects (heavier technical subjects than succinctly addressed
here.) Since it has not been done in Agile or digital mode it is not a rush to
judgment. The industry standard must be established.
• If an asset is self-funded its amortization of the service life of the asset can be
deferred in lieu of its interest expense. The upgrade of the Asset creates
Earn-back. This is more complicated than usual, and not basic to beginner
thinking. The earn-back can potentially help to pay for the upgrade.
Brij Consulting, Jean Marshall
9/22/2020 7

What
makes
Agile
Different?
• Agile is using Economy of Pert and Scrum, booking
into a Meta Based Culture which bears no
relationship to the Financial Book
• Meta Based relationships are at the graphic layer of
Least Squares. Financial Book is in the cyclical
foundation of Binary Equations. There is a digital to
analog conversion, and vice versa.
• By using convertible units the gap can be bridged
successfully
• When blocks of Scrum are conventionalized for
financial booking purposes a variance results
between the Production realized and the Payroll that
was booked, and the results need to be a consistent
matching of cost and market relationship.
• Portfolio Cash must be generated in its utility to pay
for the Assets to be booked establishing its Revenue
Recognition and Market relationship
• The Scorecard-Portfolio Method is a proven
methodology for this.

When does Agile need to be
booked?
• In the production of a revenue producing application, the burden
needs to be lifted from the Income Statement to the Balance Sheet
• Direct Labor essentially is the Revenue producing catalyst in the
Digital Portal arrangement and needs to be applied to the product
in order to establish a fair pricing mechanic for subscriber
agreement. For example this becomes a labor setpoint in
quotations management. Direct Labor is hands-on the project.
• Meta Material in the Arrangement could be considered as Forms,
Directly Purchased Products, Intellectual costs incurred, and
anything assigned to give Utility to the Project itself, such as
network licensing. [Points to Direct Material Costing]
• Everything indirectly attributable to the project that is not Direct
Labor, or the material directly costed to it, is Overhead. And it can
be an overall attributable cost rate of a department or division
process.
• Time and Motion is an essential argument in this context because it
is at the electronic level of motivation. Standard Mapping of Time
and Motion metrics is advisable.

Summary of Topic One
• “Book-It Daniel” is the Team Dialogue for Agile Costing
• Valuation is necessary in a Digital Portal Arrangement for a
Storefront Assembly or Supply Chain Service
• The Portal must be a conversion-based appliance, value is added
to it through market demand
• Industry Compliance needs to be established
• Applicable GAAP Requirement for Internal Use Software
• Producing an asset generates Revenue. Also, not discussed
previously, an inventoriable digital object would be consumed as
a stock item when a stocking process is available.
• There must be an economy of meta based technology in a time
critical arrangement of the object utilized, i.e. customer delivery
and remuneration
• Direct Material, Direct Labor and Overhead (also administrative
costs), must be applied on a unitary basis and re-applied in a
conventional method for book purposes. [Digital to Analog
Translation]
• A Purchase Method of Accounting is required for Asset Delivery
Transition, Yield,
Conversion, have
time and motion
components

Topic Two
Basic Practice of Recording
Scrum Labor

Financial models have three sides
MARGIN BASED ON METRIC
DRIVEN MODELS LIKE
‘SCORECARD’
EQUITY BASED ON PORTFOLIO
(INTERNAL MARGIN)
ASSETS BASED ON TIME
CYCLES (LIKE CASH FLOWS)
Three types of Conversion: Sales, Assets and Equity are converted from
inputs of Cash, Labor and Capital Funding of Supply Chain Activity
Internal Margin is the Value Added to your
Company by the production of Revenue

Basic
Parameters
There are two basic parameters that
cause us to hold back on certain
“booking” of projects, although we keep
track of our Project in its total impact on
the future goals of the company
• Assets can not be booked until
they are purchased, portfolio
cash must be available
• CIP (Construction in Progress)
can not be booked unless there
is Revenue Recognition to
equate to that level of
Production
We recommend a full-blown production
model as a better composition to
measure the project with especially in a
banking environment where the real
business of the bank is not portal
production. Like the data warehouse type
of problem the parts of the project need
to be aligned here, the financial portions
are necessarily comprehensive.
• Comparatively the Portfolio
Arrangements show the change
in Restructuring Assets from
Simulating and Unifying the
Digital Assets of Portal
Development.
• The Fully Loaded Assets tend
to obscure the original Portal
Cost, due to carrying labor
burden and other Sales impact,
restructuring debt and moving
to the complete asset servicing
model.
• The Realism of these Sales
conclusions is SERVICING
CLIENTS in a wider and more
developed network enhances
the Market demand.

Equity Loss interpolation from Specific FINANCIAL STATEMENT
Specific company references removed

• We built up some metric relationships based on the financial environment and specifically on our
example of the loss of the brick and mortar banks and the portal arrangements which took their
place, presuming that we have maintained a similar stream of revenue (within the business this
must be substantiated.)
• We used our calculated burden rate as our beginning selling price and set the volume to an
equivalent unit basis to get those same sales; The value added at this point comes from booking
the labor production onto the original brick and mortar basis as our equity. We built an entire
portal production plan with all costs and employees who sell and work within the portal itself in
order to have all financial relationships. This was theoretical in our case without essential full
sets of facts.
• Editorial Note: We could only Sample and Estimate a Result not having this Population of Data. But this type of Modeling
is predicated on developing standards and formulation of forensic results.

Financial Composition
• Scrum Financial Reconciliation
Reconciles down
into load and
unitary metrics

PRODUCTION DATA
17
Production Data has a unique quality of being weighted by the means of the factory or facility
burden
It is not merely the matter of applying the hours x labor rate, but it is weighted hours along the
critical path x labor rate x burden rate
Product metrics must include the facility cost and the frame application (this, is why the story
points should be included in product cost.)
Ultimately the Production if it can be carried at the level of an asset bears up the burden that is
not being sold at a margin, by increasing the internal margin of the company. This builds the
equity relationship.
The First Application of
Recording Digital Labor is to
establish Price and Market
Valuation of Portal Asset

Weighted
Product Time
includes Story
Points of all
Directs
The direct rate
is the ‘hands
on’ labor +
contractors
Split between
upgrade and
maintenance
18
See Scrum Production Unit next, however this points to information required

Scrum Task Basic Plot
Econometric Block
Balancing
the Load
means
working
into the
Load Table

First Journal
Working with
Standard units
allows for metrics to
be correlated in a
conventional
manner
A local team may be a
subset of Scrum

First Scorecard Matrix, Establishes Metric
Relations for KPI’s

Back page has
important unitary
metrics for labor

Mapping and
Interpolation
Mappings help to assist in
metric and time and motion
correlations. These types of
metric relationships have a
map value association. They
are better understood with
experience.

First Portfolio, Shows Book Result
A Plan Portfolio from the Planning Model works into Scorecard
Method, and this arrangement lets you carryover Actual Results as
well to justify your project
The Reserve Method is used
to sponsor a portfolio reserve
for the project not taxes

First Conversion Review
The Model assimilates the
comparative activities
together
•Metrics
•Scrum Labor
Scorecard
•Portfolio
•Conversion
Reconciliation
•Type of Spending
•Financial Value
Added
Activities
Activities
Funding
Adjustment
Sim vs Unified
transition
Restructure
Grand Total
ACTIVITIES AND
FUNDING PLAN

Determining Theoretical Production
• By establishing the metrics
• By determining KPI’s
• By producing a Unitary Scrum
• By recording it in a conventional
Period at corresponding rate
• You establish evidence from
The Book that you created
A funded basis for your project
We can establish and balance the conversion we have generated on
our portal and justify future upgrade on the basis of Value Added
The most important
aspect of deriving the
costed production is to
correlate that back to the
selling price, subscription
rate or the load bearing
dimension of the
customer product or
service being offered
Pricing Setpoint

Topic Three
Financial Reporting Capabilities

First Cost Benefit Report
$23B is
Funded

Financials
There is $23 Billion Funded
which means when the funds
are released from Future Cash
to Conversion, the Production
can be recorded, and the
Equity will increase. Until then
Book-It Daniel will be saying:
Wait! But pointing to Flow-thru
of Funds for a payoff of 14.4x
In Year Three the company will manage 10x the Equity Funding by
generating Digital Assets… from $1.6 B to $16.0 B plus Fund Thru of $7B
14.4x
Final Payoff

Interpolate
Working through
Instances reveals graphic
and metric relationships
Margin ROA ROI
Benchmark 0.1310 0.0660 0.0742
Baseline 0.1636 0.0910 0.1050
Unified 0.0657 0.0564 0.3463
y = -0.0284x + 0.1473
R² = 0.6439
y = -0.0293x + 0.1785
R² = 0.5796
y = 0.1403x - 0.1244
R² = 0.7252
Benchmark
v Baseline
Benchmark Baseline
Unified Linear (Benchmark)
Linear (Baseline) Linear (Unified)

Suggested…
• Putting Soft Structure in the form of
Digital Portals, Forms and Applications to
work in the present cycle of business
• Capitalize Portal Assets for a life of 17
years based on initial cost, plus labor to
install plus upgrade cost, plus the cost of
forms carried as inventory, write off in 3
years and the cost of applications
capitalized over 3 years. (Suggested)
Asset Recapitalization
There is no industry standard practice
on this topic and so we are
suggesting a basis for justification.
Our other work shows this to be a
practical norm of load bearing in
financial engineering.

Other Papers
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More information
For more
comprehensive
knowledge and model
consideration contact:
Jean Marshall
Brij Consulting
724-316-5617
By messages/text
Or by email:
qjean2004@brijconsulting.net

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