how_do_we_know_where_we_are_spending_our_money
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how_do_we_know_where_we_are_spending_our_money [2019/09/11 07:16] – [Can We Trust Agile Data to Make Decisions?] hpsamios | how_do_we_know_where_we_are_spending_our_money [2024/08/29 09:19] (current) – [Type of Work] Added heading hans | ||
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While many Agile-ists just want to say “Trust us; we are working on the most important thing every time”, this really is not responsible management from the perspective of the executives, nor sufficient for good corporate governance. The reason is that there are many different perspectives of the use of money that need to be looked and there is no (single) way of determining priority that would take into consideration these multiple perspectives. | While many Agile-ists just want to say “Trust us; we are working on the most important thing every time”, this really is not responsible management from the perspective of the executives, nor sufficient for good corporate governance. The reason is that there are many different perspectives of the use of money that need to be looked and there is no (single) way of determining priority that would take into consideration these multiple perspectives. | ||
+ | |||
+ | In addition many organizations assume that the work management tool we are using to track work can be used to directly replace existing time tracking systems. In most cases this is not true. While we can generate the answers to questions such as “where are we spending our money?” using Agile data, we do not have to know “how much time did a particular person spend on this” to answer the question. | ||
====== What Types of Categories Do We Often See? ====== | ====== What Types of Categories Do We Often See? ====== | ||
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Here are some dimensions I’ve seen organizations track: | Here are some dimensions I’ve seen organizations track: | ||
+ | |||
+ | ===== Type of Work (Investment Categories) ===== | ||
+ | |||
+ | Organizations often start by tracking the basic types of work that they are doing, to ensure that they have a balance of the work going forward. Typically you'll see: | ||
+ | |||
+ | * New Feature | ||
+ | * Maintenance | ||
+ | * Technical debt reduction, refactoring, | ||
+ | * contractual | ||
+ | * Unplanned | ||
+ | * Etc. | ||
===== Product Life Cycle Horizon investment ===== | ===== Product Life Cycle Horizon investment ===== | ||
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===== Centralized vs Decentralized Decision Making ===== | ===== Centralized vs Decentralized Decision Making ===== | ||
- | Organizations often want to understand what kind of decisions we are making at what kind of levels. For agile transformations, | + | Organizations often want to understand what kind of decisions we are making at what kind of levels. For agile transformations, |
* Portfolio: work initiated and prioritized at the program level | * Portfolio: work initiated and prioritized at the program level | ||
* Program: work initiated and prioritized at the program level | * Program: work initiated and prioritized at the program level | ||
+ | * Team: work initiated and prioritized at the team level | ||
===== Strategic Theme ===== | ===== Strategic Theme ===== | ||
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See [[how_do_we_do_software_capitalization_when_we_go_to_agile|How Do We Do Software Capitalization When we Go to Agile?]] for more on this subject. | See [[how_do_we_do_software_capitalization_when_we_go_to_agile|How Do We Do Software Capitalization When we Go to Agile?]] for more on this subject. | ||
+ | |||
+ | ===== Project Identifier ===== | ||
+ | |||
+ | Often the work that is being taken on is the result of a customer project, for example. Project Managers and other stakeholders will be interested in understanding, | ||
===== Funding Source ===== | ===== Funding Source ===== | ||
- | Organizations often have different sources of funding for an IT organization and it is up to the IT organization to ensure that the capacity allocated to work lines up with these funding sources. To track, | + | Organizations often have different sources of funding for an IT organization and it is up to the IT organization to ensure that the capacity allocated to work lines up with these funding sources. To track, we could tag based on: |
* Customer Projects | * Customer Projects | ||
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For more information see [[https:// | For more information see [[https:// | ||
- | ====== And Then There are More Arbitrary Definitions | + | ===== And Then There are More Arbitrary Definitions ===== |
One product development shop I worked with really wanted us to track truly innovative work separately from maintenance work. Their categories were a combination of a number of notions: | One product development shop I worked with really wanted us to track truly innovative work separately from maintenance work. Their categories were a combination of a number of notions: | ||
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- Initiatives: | - Initiatives: | ||
- | A combination of approaches is also used in many cases. | + | Different tools will support different approaches. Often a combination of approaches is also used. |
- | No matter the approach, we’d provide tools and dashboards to people | + | No matter the approach, we’d provide tools and dashboards to people |
Some organizations feel like that they need to get very precise with these categories. So for a particular category, for example Capitalization they won’t just label a feature with “Capital budget” or “Operating budget” but rather will try to estimate a percentage of the Feature that fits into each category (eg Feature is 33.3% capital budget, and the rest operating). | Some organizations feel like that they need to get very precise with these categories. So for a particular category, for example Capitalization they won’t just label a feature with “Capital budget” or “Operating budget” but rather will try to estimate a percentage of the Feature that fits into each category (eg Feature is 33.3% capital budget, and the rest operating). | ||
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In most cases it doesn’t really make a lot of difference what is used. In general I’ve found that a count approach is both simpler and more consistent over the long term. Most organizations are more comfortable using size because this seems like it is an important factor. The reality is that the “law of large numbers” takes over for large implementations so the counts are “good enough” and probably about the same as using size information. | In most cases it doesn’t really make a lot of difference what is used. In general I’ve found that a count approach is both simpler and more consistent over the long term. Most organizations are more comfortable using size because this seems like it is an important factor. The reality is that the “law of large numbers” takes over for large implementations so the counts are “good enough” and probably about the same as using size information. | ||
- | ====== | + | ====== |
A word on getting started on Agile reporting approach. Initially it is difficult for organizations to understand how you turn points and counts into dollars. See [[how_do_i_convert_points_and_velocity_to_dollars|How Do I Convert Points and Velocity to Dollars?]] for the general approach. | A word on getting started on Agile reporting approach. Initially it is difficult for organizations to understand how you turn points and counts into dollars. See [[how_do_i_convert_points_and_velocity_to_dollars|How Do I Convert Points and Velocity to Dollars?]] for the general approach. | ||
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====== Want to Know More? ====== | ====== Want to Know More? ====== | ||
+ | |||
+ | * [[how_do_i_convert_points_and_velocity_to_dollars|How Do I Convert Points and Velocity to Dollars?]] | ||
+ | * [[how_do_we_do_software_capitalization_when_we_go_to_agile|How Do We Do Software Capitalization When we Go to Agile?]] | ||
+ | * [[can_we_trust_story_points_as_a_measure_of_effort|Can We Trust Story Points as a Measure of Effort?]] | ||
{{tag> | {{tag> | ||
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