Agile transformation increasingly applies to the old economy and for many organizations determines long-term survival. Agile transformation, as of the 2020s, has little to do with delivering software. Software purchase decisions, however, can either promote or doom the agile transformation at your organization. Let’s review some lesser-known, enterprise-level aspects of the agile transformation. What to look at when choosing project/product management software?
Agile transformation definition
Cut the time to the market in half. Or, quite contrary, postpone the premiere of a new product by two weeks, to include a crucial feature, such as the support for a new iPhone ;) This is the shortest definition of agile transformation we know. Seek added value, be nimble. Update schedules on the fly. Such agile transformation pertains to financial, construction, manufacturing, leisure industries, too.
A more formal definition reads as follows: Business agility is the ability to compete and thrive in the digital age by quickly responding to unprecedented market changes, threats, and emerging opportunities with innovative business solutions.1 Agile transformation is an act of transforming an organization’s form or nature gradually to one that is able to embrace and thrive in a flexible, collaborative, self-organizing, fast-changing environment. The Agile Manifesto values and principles can be taught and exercised throughout any type of organization as it does not just apply to development teams.2
Precisely, where does the agile transformation occur in an organization?
Firstly, the mental change, at all levels.
To achieve agile transformation, Gartner advocates adopting a business agile mindset. Embrace change and uncertainty instead of trying to fit all projects to a rigid production line approach. —We need to be clear that a business agile mindset has nothing to do with software development or scrum methodologies – says Michelle M. Coelho, research director at Gartner. —In fact, it has nothing to do with technology. It’s a mental shift in how we approach projects.
Deliver a continuous flow of value rather than a predetermined product. Business value is the ultimate goal for the teams to keep in mind, rather than meeting deadlines or a timely debut of a new product or service. PMO communicates progress continuously throughout the life cycle of the value stream to update everybody on the flow of value. Metrics for measuring the progress may vary from project to project, but they need to be developed collaboratively by all the stakeholders because their “commitment must be an act, not a word”.
Furthermore, brace for uncertainty and tackle it with iterations. They have the power to ease the cognitive load that real-world uncertainty imposes.3
En route to agility, the HR department shifts from focusing on individuals to focusing on teams. Rather than supporting a department or two, HR becomes an enabler of the Agile transformation roadmap in collaboration with executives. In an organization undergoing the agile transformation, HR strives for a cross-functional framework instead of siloed skills framework. The Human Resources move from motivating employees extrinsically to leaning more towards intrinsic motivators. So they move from annual individual performance appraisals to continuous team-based feedback.4
New roles emerge during an agile transformation. Product Owners, Scrum Masters, and Stakeholders take the place of Project Managers to guide teams toward business outcomes.5
The best basics to start with, instrumentally, are Scrum and Kanban. Applying methods and tools is a relatively easy part of the transformation. Scaling frameworks, such as SAFe, LeSS, Disciplined Agile, Scrum @ Scale, or Scrum Nexus do not necessarily recommend any particular tools.6 —There are four software categories, however, to look at while transforming towards agility: PPM, innovation management, idea validation, and CRM software – said Olgierd Borowka, Head of Marketing at SoftwarePlant.
Budgeting undergoes a dramatic change during the agile transformation. Investments are made in value streams, instead of strictly defined products.
Accenture compiled these five good practices for an agile CFO to follow:7
- Decouple supply and demand, aiming instead for product management that aligns delivery to strategic objectives.
- Build a “return on teams” mentality.
- Review and fine-tune Finance’s portfolio, assessing progress and demand more frequently – incrementally.
- Build systems to support transparent, accessible real-time data to decentralize decision-making as much as possible.
- Shift from thinking in terms of large-scale projects to creating incremental commitments within product areas and delivering on them quarterly.
Old economy vs. New economy
It used to be believed that agile transformation applies exclusively to the new economy, and to software development in particular. This was true after 2000, but the landscape has changed.
Example 1: Could there be a more traditional sector than manufactured and mobile homes? Their version of agility is to delay the premiere of a new interior trim so that it has a new electronic system.
The old economy agility has more to do with the strategic level and business development decisions. On the contrary, in the software industry, the agile transformation was a bottom-up process; had its roots at the work team level.
Following are some lesser-known remarks, or good practices, drawn from organizations we implemented BigPicture for:
- Embrace agility gradually, step by step, department by department, branch by branch, or product by product.
- Not to lose control over the company is a pre-condition.
- Longer than expected is how long the agile transformation typically takes.
- ‘Give up schedules in favor of added value and customer-centricity’ is what agile transformation is all about.
Agile evangelists claim that agile management corresponds with the vast majority of industries and organizations. The more ‘classic’ the sector and the larger a player, the bumpier the agile transformation tends to be. Some organizations defer their agile transformations to take risks away.
Example 2: a road construction company might practice agility by seeking the most lucrative contract at any given time. They might subcontract less profitable projects, to always commit their own resources to the most profitable construction site available.
Software-related decisions and dilemmas
How to locate the right software if you are facing or are in the middle of agile transformation? In the software industry, it was a simple decision – they used to select some Scrum software. Scrum is tailor-made for software development, but unfortunately, Scrum itself is not suitable for agile at scale management. We think that between 2020 and 2030 it will be traditional industries, such as manufacturing, transportation, or finance, that would undergo the agile transformation.5 The old economy practices agility (statistically) for the business development and strategic aspects more than for manufacturing.
Here is how we would try to obtain software suitable for agile transformation:
- Review agile software that’s already in your organization. Perhaps a department or a team made the right software decisions already.
- Seek software that supports, for instance, SAFe, LeSS, DAD, Nexus, Spotify. These are examples of scalable PM methodologies. The software vendor may propose its own scaling approach. Agile at scale’ is the key phrase to look for.
- Give preference to software that integrates with tools that teams love. Trello and Azure DevOps are just two examples.
- If a candidate suite supports just low-level planning, it’s still possible to use it in the process of agile transformation, but you’ll need to adapt the simple tool for high-level planning.
- For most organizations, especially medium and large, the mere ‘Sprint planning’ and ‘Team planning’ functionalities might not be enough to power their agile transformations. You need enterprise- or portfolio-level software for the transformation to be complete.
- Hybrid project support is another must-have. Hybrid projects let you transform to agile gradually, besides parts of your business will remain hybrid for good.
- Check whether the software has modules, that you’ll use for the actual managing of individual projects. Modules, such as Resources and Roadmap are a good starting point.
- Single Source of Truth and umbrella PPM are other key phrases that correspond to the agile transformation.
Here is how we would carry the agile transformation step-by-step, using an agile software package:
- Mirror your current, pre-agile landscape in the software.
- Ideally, build a “classic project” template and recreate your current projects in the new piece of software.8
- Next, one by one, switch waterfall projects to agile projects, SAFe ARTs, or whatever your methodology is.9
This agile transformation workflow may take months or years to complete, and that’s o.k.
2 Agile Transformation: Understanding What it Means to be Agile, Cast Software Intelligence for Agile Leaders
3 How to Shift to a Business Agile Mindset, Rob van der Meulen, Gartner, April 2018
4 HR’s Role in Agile Transformation, Business Agility Institute, May 2019
5 The journey to an agile organization. Transforming to an agile operating model, McKinsey & Company, May 2019
6 Agile Transformation. From Agile experiments to operating model transformation: How do you compare to others? KPMG, 2019
7 With agility, CFOs can help drive a growth agenda, Todd Rebella, Aimee Palmer, Kat Conner, Accenture, September 2020
8 BigPicture has ‘Waterfall project’ Boxes (~templates), see Figure 3.
9 With BigPicture Enterprise you can create as many Box types as you like. This way, you can cover various PM methodologies in use at your organization.