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48056Re: [scrumdevelopment] How to have a conversation about Agile with the CFO?

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  • Steve Ropa
    Aug 19, 2010
      I'm interested in the idea of cap vs expense in that scenario...  I can't think of a ton there, except perhaps that defect work is often expensed, while initial development can be capitalized.  Perhaps since we are spending more effort on high quality development with agile practices, we don't have to spend as much time on defects, thus being able to capitalize the work.  I'm not 100% sure of the validity of this though.  Interestingly, the last company I was worrying about this with had actually been trying to find a way to minimize cap and maximize expenditures.  I still don't get why they wanted to, but there it is.

      Sent: Wednesday, August 18, 2010 11:40 AM
      Subject: Re: [scrumdevelopment] How to have a conversation about Agile with the CFO?


      Excellent question, David! I don't think I've seen a post about pitching to the CFO

      on this list.

      My thoughts go to pure business benefit for the CFO:
      • the date moves up for putting the investment into service in Agile with its more frequent deployments; it would be great if you could take in two NPV (net present value) scenarios for a waterfall vs. Agile project to illustrate this point and the resultant savings
      • the ability to stop even successful projects when they are past the steep part of their value realization curve creates greater overall enterprise value realization; again a comparison scenario would be great, even if its just a hand-drawing (which is what I typically do)
      • capitalization vs. expense benefits in terms of how the investment of Agile projects is accounted for in the company's books vs. waterfall projects; I have heard finance people talk about this but am not expert enough to tell you the details
      • lower turnover on Agile teams leads to lower training and hiring costs (I have seen this lower turnover to be true, but don't have a published reference, though someone else probably does)
      That's off the top. 

      Collective Edge Coaching, llc
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      Michael K. Spayd, Principal & Chief Sage, ORSCC
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      On Wed, Aug 18, 2010 at 11:30 AM, <drc@...> wrote:

      I'm about to have a meeting with the CFO of the company where I'm supporting a scrum adoption.

      I'm curious what you think might be interesting or important questions or concerns to raise with her as part of that conversation?

      What has been your experience with making the advantages (and disadvantages) of scrum visible to the "C" level folks in your organization?

      Thanks in advance for your comments and thoughts!

      -- David Chilcott
      Outformations, Inc.

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