Agile, cloud objectives misaligned with financial practices

The gripes look like –

• • We’re practicing agile on sprint and release cycles that are days to months in duration, but the finance team needs yearly and sometime multi-year financial forecasts on “project” costs.

• • We want to be agile with our customer facing technologies, but financial practices more often drive one-time capital investments and hard to justify ongoing investments to support enhancements. Our “projects” should be run more like ongoing agile programs.

• • We want the versatility of the cloud but have not adjusted to higher operating and lower capital investment options to support this transition.

• We want to experiment, pilot, and even “fail fast” but expect business cases that forecast ROI before making pilot investments.

But I can offer some recommendations

1. Take charge of your spend

If you’re not doing this already, take charge of your financial spending by tracking it rigorously. More often than not, your ERP doesn’t have the level of detail to run IT like a business. If you are a large enterprise, there are many tools that you can select from to manage the total cost of ownership of IT, but these may be out of reach for medium/small enterprises or small IT shops who must be creative on adopting tools, methodology, or level of detail to track. In my book, Driving Digital, I provide some advice on developing a financial tracking tool on lowcode platforms.

Tracking financials rigorously gives you much deeper knowledge on where you can cut costs to drive new investments. It’s also your vehicle to have a more detailed financial discussion with your finance teams.

2. Address agile mindset factors first

This is important:

Manage to budget and quality first, timelines second, and scope a distant third.

This requires a deep change in cultural and developing an agile and digital mindset around scope and what is an MVP – which is more critical to address in transformation programs versus deeply ingrained financial practices. By managing to budget first and tracking finances rigorously (my first recommendation) you’ll be better positioned to provide accurate financial forecasts. Then, you have to manage to this budget by debating scope or adjusting timelines.