The Business Case for Agile Transformation

Enabling a collaborative, iterative approach to software delivery based on business value

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What it Does

Agile transformation enables a collaborative, iterative approach to software delivery based on business value. It moves organizations away from brittle development methodologies to promote continuous delivery and improvement.

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  • Increased productivity from 10% to 30%
  • Accelerated time to market by up to five times
  • Improved customer experience by 5% to 25%
  • Reduced project costs from 10% to 40%
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High: More than 75% of companies use an agile approach to speed delivery, lower costs, and beat the competition.

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Risk Level

Medium: Agile requires a culture and mindset change that takes time and demands proper investment to realize its full benefits.

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30/60/90 Plan

The path to agile is defined by how quickly an organization makes decisions and funds action. First, work on organizational buy-in and provide training and coaching across IT and the business, then move to assess progress and ensure the organization is empowered to transform.

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Time to Value

Agile is an evolutionary transformation that involves leadership, culture, collaboration, and processes. Early benefits include productivity and faster time to market. The transformation will be ongoing.

What Is Agile Transformation?

Agile transformation is an evolutionary change to a more collaborative, flexible, iterative approach to software delivery based on business value. Agile transformation requires a long-term commitment for an organization.

What Are the Benefits of Agile Transformation?

When a company embraces the idea of agile transformation, it invites change. It seeks a collaborative environment that quickly reflects changing priorities into the workstreams for development teams. Increased collaboration leads to better alignment between IT and business, allowing agility when changing priorities and yielding heightened clarity across initiatives. The result: better outcomes and happier customers. Successful agile transformations can produce value in several areas.

  • Increased productivity: Expect productivity gains and operational improvement from 10% to 30%.
  • Faster time to market: Products can be delivered to market up to five times faster than before the transformation.
  • Improved customer experience: Customers and employees experience higher satisfaction and net promoter scores typically increase by 5% to 25%.
  • Reduced project costs: Businesses can expect significant cost saving—from 10% to 40% across project portfolios.

What Are the Scenarios of Use?

Today, more than 75% of organizations are engaged in some agile transformation journey. It is a mindset shift for all levels across the organization. A collective goal of greater collaboration, a focus on customer needs, and a commitment to continuous improvement of processes, functions, communications is needed.

  • Desire to deliver projects on time: Companies need to deliver key functionality quickly to users and customers.
  • Improve customer satisfaction: Business is rapidly changing, so companies must respond fast to meet customer needs.
  • Improve product experience: Continuous improvement in product features on an iterative timeline.
  • Stretch development dollars to deliver more functionality: In tight financial situations, companies must provide high-value features with fewer people.

What Are the Alternatives?

There are a few alternatives to agile development. The best known is traditional waterfall development, which employs a structured, linear approach to software development. For example, companies with technical teams that are familiar with the software (think mainframe) may be better off with waterfall.

Companies may apply a non-traditional or customized approach to software development. Such practices are likely driven by unique situations at a company and not as well documented as agile and waterfall.

Today, most companies leverage a hybrid development approach and many operate agile and waterfall techniques together. However, this is mainly driven by the stage of transformation of the given company.

What Are the Costs and Risks?

Initial costs for an agile transformation range dramatically depending on the company’s size and complexity. These are costs to consider when embarking on an agile transformation plan:

  • Software license and subscription: Licenses for agile planning and portfolio management tools are based on the number of users, integrations, and features. They can be free or cost more than $150/user/month. Automated testing solutions follow a similar cost model.
  • Implementation and integration: The tools require configuration, customization, and integration. Costs for services range from $20K to more than $100K, depending on the platform’s complexity. Smaller implementations can be done internally.
  • Organization change management: Agile training and coaching are key components to change management. Coaches average $100K annually. Training ranges from free online courses to over $15K for in-person training.

Agile transformation has a significant impact on existing people and processes for IT and the business. It involves changes in people, processes, and technology. Benefits increase over time. Risks and challenges to be aware of:

  • Change to culture and mindset: Teams and leaders must embrace the culture and mindset change.
  • Agile takes time: Agile is a continuous improvement process requiring continuous assessment and retraining.
  • Investment for agile: Funding changes to facilitate the agile training processes, tools and timelines is key.

30/60/90 Plan

The agile transformation plan is highly dependent on how an organization makes decisions and funds actions. Initial teams can yield results within 90 days and provide a clearer understanding of the scope and potential for agile’s expansion across the organization. To achieve this, we recommend the following 30/60/90 Plan:

30 Days: Organizational Buy-In and Decision to Move
Fund training, coaching and tooling. Establish and train the initial team or trailblazer group to start the agile transformation and show value. Agile planning and portfolio management tools are implemented to help organize the initial teams’ transformation.

60 Days: Building on the Mindset Change
The next stage is building on the groups’ findings from the first weeks of development. New teams are trained in agile. To expand uptake of agile processes and tools, coaches are assigned to “train the trainers,” teaching members of the first trailblazer teams to instill agile development concepts across the organization. This effort will accelerate agile implementation.

90 Days: Assess Alignment and Validate Options
Agile coaches should help assess new teams and leaders to reinforce agile concepts in ways that best impact software development and feature prioritization. From this point, teams are empowered to transform and become more agile. Assessment, retraining, and improvement with agile processes and tools is ongoing. The agile culture and mindset shift occurs over time, as those involved understand and embrace agile and understand its value to the organization.