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Agile Finance

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  • Michael Wollin
    I need a few bullet points on what can be gained with taking agile development into account with company/project financials, where the result is an improved
    Message 1 of 6 , Jan 2, 2013
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      I need a few bullet points on what can be gained with taking agile development into account with company/project financials, where the result is an improved Balance Sheet. I remember, for example, that one could capitalize a larger percentage of development costs. I also remember financial charts that showed that incremental releases resulted in more ROI. 

      1. Can someone point me to a couple of good and authoritative articles on the subject?
      2. There was a really good book that came out a few years ago but I seem to have misplaced it and I can't remember its name. I just remember the paperback cover was sky blue. 
      3. Or, just for the proposal summary that I'm working on, can someone just list a couple of bullet points I can use to claim that changing how Finance accounts for agile projects will result in goodness?
      Thanks!

      Michael
    • Dan Greening
      Hi Michael (and others), I have a paper possibly slated for publication on the topic of capitalization and depreciation that may help. I can provide a
      Message 2 of 6 , Jan 2, 2013
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        Hi Michael (and others),

        I have a paper possibly slated for publication on the topic of capitalization and depreciation that may help.  I can provide a preprint under the condition that you agree to provide feedback within a week of receipt.  Send request separately to me at dan@.... Thanks.

        Dan R. Greening — http://dan.greening.org


        On Wed, Jan 2, 2013 at 1:15 PM, Michael Wollin <yahoo@...> wrote:
         

        I need a few bullet points on what can be gained with taking agile development into account with company/project financials, where the result is an improved Balance Sheet. I remember, for example, that one could capitalize a larger percentage of development costs. I also remember financial charts that showed that incremental releases resulted in more ROI. 

        1. Can someone point me to a couple of good and authoritative articles on the subject?
        2. There was a really good book that came out a few years ago but I seem to have misplaced it and I can't remember its name. I just remember the paperback cover was sky blue. 
        3. Or, just for the proposal summary that I'm working on, can someone just list a couple of bullet points I can use to claim that changing how Finance accounts for agile projects will result in goodness?
        Thanks!

        Michael


      • Ram Srinivasan
        I believe Dan Greening and Pat Reed have independently worked on Agile Accounting models. Pat s presentation is also available online
        Message 3 of 6 , Jan 2, 2013
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          I believe Dan Greening and Pat Reed have independently worked on Agile Accounting models. Pat's presentation is also available online 


          Ram

          On Wed, Jan 2, 2013 at 4:15 PM, Michael Wollin <yahoo@...> wrote:
           

          I need a few bullet points on what can be gained with taking agile development into account with company/project financials, where the result is an improved Balance Sheet. I remember, for example, that one could capitalize a larger percentage of development costs. I also remember financial charts that showed that incremental releases resulted in more ROI. 

          1. Can someone point me to a couple of good and authoritative articles on the subject?
          2. There was a really good book that came out a few years ago but I seem to have misplaced it and I can't remember its name. I just remember the paperback cover was sky blue. 
          3. Or, just for the proposal summary that I'm working on, can someone just list a couple of bullet points I can use to claim that changing how Finance accounts for agile projects will result in goodness?
          Thanks!

          Michael



        • Pierre Neis
          at Sam, this an amazing presentation. Thanks for sharing. Other kind of inspiration can be grabbed at http://www.bbrt.org/beyond-budgeting/bb-ben.html Cheers
          Message 4 of 6 , Jan 3, 2013
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            at Sam, this an amazing presentation. Thanks for sharing.

            Other kind of inspiration can be grabbed at http://www.bbrt.org/beyond-budgeting/bb-ben.html

            Cheers

            Pierre E. Neis 
            Scrum/Lean Coach - Agile Business Transformation Advisor
            Senior Management Consultant

            Freelance Associate @ WE & Co , the Collab Lab
            Mobile: (+352) 661 727 867

            Agenda: http://meetwith.me/pierreneis 
            Owner of the "Product Owner's Help Desk" - "PLöRK - the leader's tool"
            Blogger about.me LinkedIn SlideShare XING Google Plus Twitter
            Contact me: Skype pierre.neis Google Talk pierreneis@...


            On 2 January 2013 22:33, Ram Srinivasan <vasan.ram@...> wrote:
             

            I believe Dan Greening and Pat Reed have independently worked on Agile Accounting models. Pat's presentation is also available online 



            Ram

            On Wed, Jan 2, 2013 at 4:15 PM, Michael Wollin <yahoo@...> wrote:
             

            I need a few bullet points on what can be gained with taking agile development into account with company/project financials, where the result is an improved Balance Sheet. I remember, for example, that one could capitalize a larger percentage of development costs. I also remember financial charts that showed that incremental releases resulted in more ROI. 

            1. Can someone point me to a couple of good and authoritative articles on the subject?
            2. There was a really good book that came out a few years ago but I seem to have misplaced it and I can't remember its name. I just remember the paperback cover was sky blue. 
            3. Or, just for the proposal summary that I'm working on, can someone just list a couple of bullet points I can use to claim that changing how Finance accounts for agile projects will result in goodness?
            Thanks!

            Michael





          • Charles Bradley - Professional Scrum Trai
            Dan, Regarding these bullet points on the presentation link from Ram --
            Message 5 of 6 , Jan 8, 2013
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              Dan,

              Regarding these bullet points on the presentation link from Ram -- http://submit2012.agilealliance.org/files/session_pdfs/Agile2012_Agile%20Accounting%20Presentation%281%29.pdf

              <snip>
              Design talking points to present to your CFO to “sell” Agile. How can you help them understand the benefits of Agile re: GAAP?
              <snip>

              I minored in Accounting, but that was a long time ago.  But I'll give it a try anyway

              1.  Is the basic sum total of the benefits of Agile wrt GAAP that it's easier to capitalize/depreciate *more* software dev costs(vs. expensing) in Agile than in Waterfall?  (Assuming you can satisfy consistency and other compliance issues of course.)

              2.  If yes to #1, Is the result of the Agile/GAAP advantage simply that
              • a) you can delay expensing *more* software dev costs by a few years and state higher profits(vs. waterfall) in the current year this way?, and
              • b) state higher assets on the balance sheet(vs. waterfall) in the current year this way? 

              As an aside...

              "The purpose of GAAP is to ensure that financial reporting is transparent..."

              I sometimes feel that Product Backlogs, Sprint Backlogs, velocity, burndowns and the like are all to help ensure that software progress reporting is transparent.  Materiality is also an important concept here (I have an upcoming article on that).  Oh the parallels between (good) Scrum data and GAAP.....

              -------
              Charles Bradley
              Scrum Coach-in-Chief
              ScrumCrazy.com




              From: Dan Greening <dan@...>
              To: scrumdevelopment@yahoogroups.com
              Sent: Wednesday, January 2, 2013 2:20 PM
              Subject: Re: [scrumdevelopment] Agile Finance



              Hi Michael (and others),

              I have a paper possibly slated for publication on the topic of capitalization and depreciation that may help.  I can provide a preprint under the condition that you agree to provide feedback within a week of receipt.  Send request separately to me at dan@.... Thanks.

              Dan R. Greening — http://dan.greening.org> wrote:
               
              I need a few bullet points on what can be gained with taking agile development into account with company/project financials, where the result is an improved Balance Sheet. I remember, for example, that one could capitalize a larger percentage of development costs. I also remember financial charts that showed that incremental releases resulted in more ROI. 

              1. Can someone point me to a couple of good and authoritative articles on the subject?
              2. There was a really good book that came out a few years ago but I seem to have misplaced it and I can't remember its name. I just remember the paperback cover was sky blue. 
              3. Or, just for the proposal summary that I'm working on, can someone just list a couple of bullet points I can use to claim that changing how Finance accounts for agile projects will result in goodness?
              Thanks!

              Michael





            • Dan Greening
              Hi scrumdevelopers, There was a thread below on Agile Finance in scrumdevelopment a few weeks ago. I mentioned I was writing an article on the topic. I just
              Message 6 of 6 , Feb 3, 2013
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                Hi scrumdevelopers,

                There was a thread below on Agile Finance in scrumdevelopment a few weeks ago.  I mentioned I was writing an article on the topic. I just posted Why Should Agilists Care About Capitalization? on InfoQ, after working on it for months. It includes a bunch of details on how we classified PBIs as expense or capitalize, and how we avoided time-cards and time-tracking, while making auditors much more happy.

                Of course, I am interested in feedback on the paper. My preference is replying to the paper on InfoQ proper or twitter reference to @greening. However, I am happy to answer questions or critiques here as well.  I'm also happy to discuss privately.

                I hope this helps.

                Dan Greening
                Managing Director, Senex Rex LLC, http://senexrex.com
                Email: dan@... Phone: +1 (415) 754-8311, Skypeid: drgreening


                On Wed, Jan 2, 2013 at 9:20 PM, Dan Greening <dan@...> wrote:
                Hi Michael (and others),

                I have a paper possibly slated for publication on the topic of capitalization and depreciation that may help.  I can provide a preprint under the condition that you agree to provide feedback within a week of receipt.  Send request separately to me at dan@.... Thanks.

                Dan R. Greening — http://dan.greening.org


                On Wed, Jan 2, 2013 at 1:15 PM, Michael Wollin <yahoo@...> wrote:
                 

                I need a few bullet points on what can be gained with taking agile development into account with company/project financials, where the result is an improved Balance Sheet. I remember, for example, that one could capitalize a larger percentage of development costs. I also remember financial charts that showed that incremental releases resulted in more ROI. 

                1. Can someone point me to a couple of good and authoritative articles on the subject?
                2. There was a really good book that came out a few years ago but I seem to have misplaced it and I can't remember its name. I just remember the paperback cover was sky blue. 
                3. Or, just for the proposal summary that I'm working on, can someone just list a couple of bullet points I can use to claim that changing how Finance accounts for agile projects will result in goodness?
                Thanks!

                Michael



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