Archives April 2021

The harsh economic impact of COVID-19 will be beyond any doubt. Budget pressure requires a rapid response, especially during uncertain and turbulent times like this. Most to all companies started budget cut exercises on all levels. Programs and projects are postponed or simply cancelled. But rash decisions can jeopardise your longer-term objectives for success and growth.

Leading companies take a proactive and agile approach to cost optimization. It better equips them to sustain through headwinds and unknowns. What does it take to do that? How to get to an efficient approach in which you know and evaluate the risks and benefits of your cost initiatives, for now and for tomorrow?

Agile can affect the bottom line 

For the record, I’m not exactly a fundamental religious follower of Agile Scrum but even for companies that don’t apply Agile Scrum by the book, the Agile Manifesto foresees quite a useful framework that supports a continuous cost cost/benefit assessment. If for every project, you have broken down the minimum viable product deliverables or even the expectations into small enough units then these can be evaluated individually whether or not to re-prioritise or even stop them. In Agile Scrum it’s a common practice to work your way down to the details from epics or themes to user stories which represent requirements. It’s also a best-practice to apply the INVEST principle when putting together meaningful user stories. 

Well, here you are! If you have done a good job, then the first 5 INVEST characteristics will help you to: 

• Prioritise your projects or cost initiatives by mission and potential outcomes.
• Combine a scoring method and executive judgment, to identify key cost optimisation initiatives to implement over time.
• Assess the level of impact across the entire portfolio (although I need to get back on that in a following article). 
• Evaluate the trade-offs between the benefits, costs, mission risk and viability of cost optimisation initiatives.

If you apply a user story mapping technique that focusses on business value with every activity, you can map your cost optimisation initiatives on a simple grid to show the impacts, trade-offs and help build buy-in from Finance. 

In the end, Agile leads to cost savings because of the principles that form its base!

Meanwhile #staysafe and #goagile