© 2012 Forrester Research, Inc. Reproduction Prohibited 1 © 2009 Forrester Research, Inc. Reproduction Prohibited Webinar Increasing Your Business Impact With Agile And Lean Diego Lo Giudice, Vice President, Principal Analyst February 29, Call in at 10:55 a.m. Eastern time

© 2012 Forrester Research, Inc. Reproduction Prohibited 2 How can you prove that Agile and Lean have good impact on business and IT?

© 2012 Forrester Research, Inc. Reproduction Prohibited 3 Agile development addresses today’s business challenges. It also addresses issues of business value more than past approaches. But adopting Agile is one thing; scaling is another. By scaling, the reward is greater business value. Recommendations Agenda

© 2012 Forrester Research, Inc. Reproduction Prohibited 4 Speed!

© 2012 Forrester Research, Inc. Reproduction Prohibited 5 Quality!

© 2012 Forrester Research, Inc. Reproduction Prohibited 6 Change!

© 2012 Forrester Research, Inc. Reproduction Prohibited 7 32% speed 46% quality 38% satisfaction 37% better business/IT alignment 43% change Source: February 8, 2012, “Determine The Business And IT Impact Of Agile Development” Forrester report

© 2012 Forrester Research, Inc. Reproduction Prohibited 8 Physicians Mutual Agile Advantage Amadeus IT Group Atlassian Ci&T Emergn FINRA Gap GXS IBM Level 3 Communications Microsoft NSK Quantitative Software Management (QSM) Rally Software sanofi-aventis se2 Tata Consultancy Services (TCS) Thomson Reuters ThoughtWorks “Only way to deal with unknown requirements is to allow midcourse corrections. That’s one of the main reasons we use Agile development.” “Agile is about predictability; if everything is known and predictable, you don’t need Agile.” “There is always a better way to do things, and currently, Agile is the best way!” “It was so blatant that Agile was improving over past projects that specifics were not needed.” Source: February 8, 2012, “Determine The Business And IT Impact Of Agile Development” Forrester report “37% time-to-market improvement” and “16% productivity increase” - QSM

© 2012 Forrester Research, Inc. Reproduction Prohibited 9 Agile development addresses today’s business challenges. It also addresses issues of business value more than past approaches. But adopting Agile is one thing; scaling is another. By scaling, the reward is greater business value. Recommendations Agenda

© 2012 Forrester Research, Inc. Reproduction Prohibited 10 52% of executives and technology budget decision- makers consider technology very important for their innovation and business models. Source: February 8, 2012, “Determine The Business And IT Impact Of Agile Development” Forrester report

© 2012 Forrester Research, Inc. Reproduction Prohibited 11 Software is the key engine to enable business innovation ProductLines of code Order entry system1.7 million F-22 Raptor1.7 million Space Shuttle2 million Microsoft Word2 million (27,000 in first release) F-35 Joint Strike Fighter5.7 million Airline reservation system6.1 million Boeing 787 Dreamliner6.5 million S Class Mercedes-Benz radio with navigation system 20 million

© 2012 Forrester Research, Inc. Reproduction Prohibited 12 Agile and Lean address the issue of business value more than traditional approaches Business value Divide et impera Feature values Disruption Agile Lean

© 2012 Forrester Research, Inc. Reproduction Prohibited 13 Growing use of business value metrics  Cycle time: concept to cash  Cycle time: from build to feature value  Earned value (EVM)  Revenue, sales, and market penetration...

© 2012 Forrester Research, Inc. Reproduction Prohibited 14 How do Agile IT professionals measure the value of Agile? Source: February 8, 2012, “Determine The Business And IT Impact Of Agile Development” Forrester report

© 2012 Forrester Research, Inc. Reproduction Prohibited 15 Agile development addresses today’s business challenges. It also addresses issues of business value more than past approaches. But adopting Agile is one thing; scaling is another. By scaling, the reward is greater business value. Recommendations Agenda

© 2012 Forrester Research, Inc. Reproduction Prohibited 16 Agile scales at least along two dimensions: breadth and depth depth breadth Source: February 8, 2012, “Determine The Business And IT Impact Of Agile Development” Forrester report

© 2012 Forrester Research, Inc. Reproduction Prohibited 17 Geographical distribution S C Insourcing-Outsourcing S C Governance S C Organization and culture S C Compliance requirements S C As you scale the following, factors add challenges Low compliance High compliance Project level Enterprise level Open Entrenched In-house Third party Co-location Global Application complexity Low complexity High complexity S C Team size Under ’s S C Business alignment Highly involvedLow involvement S C S = Success C = Challenge

© 2012 Forrester Research, Inc. Reproduction Prohibited 18 As you move Agile out of the team level, clashes increase with PMOs, PMs traditional practices... Deadline Costs Scope Iron Triangle constraints

© 2012 Forrester Research, Inc. Reproduction Prohibited 19 Transparency of Agile projects allows relaxing the Iron Triangle constraints... Agile adjustments to deadline: Frequent delivery options to redefine deadlines and accommodate change: Two- to four-week iterations/sprints (working software) Releases Agile adjustments to scope: Value becomes part of the scope and prioritizes it. Helps focus on doing the right things versus things right Agile adjustments to costs: Costs can be fixed at iterations/sprints, and a more direct equation can be established with functional quality. When necessary, cost forecasting can be done with preplanning or sprint 0. Deadline Costs Scope Deadline Scope Costs

© 2012 Forrester Research, Inc. Reproduction Prohibited 20 Agile development addresses today’s business challenges. It also addresses issues of business value more than past approaches. But adopting Agile is one thing; scaling is another By scaling, the reward is greater business value. Recommendations Agenda

© 2012 Forrester Research, Inc. Reproduction Prohibited 21 Geographical distribution S S Insourcing and outsourcing S S Governance S S Organization and culture S S Compliance requirements S S Only by changing can you scale Agile and still succeed Low compliance High compliance Project level Enterprise level Open Entrenched In-house Third party Co-location Global Application complexity Low complexity High complexity S S Team size Under ’s S S Business alignment Highly involved Low involvement S S S = Success

© 2012 Forrester Research, Inc. Reproduction Prohibited 22 Focus where Agile makes the obvious difference: system of engagements But let final decisions be driven by process-driven business “value.”

© 2012 Forrester Research, Inc. Reproduction Prohibited 23 As you scale, water-Scrum-fall might become the norm This does not have to be as bad as it looks! Requirements and planning Release Source: July 26, 2011, “Water-Scrum-Fall Is The Reality Of Agile For Most Organizations Today” Forrester report

© 2012 Forrester Research, Inc. Reproduction Prohibited 24 PMI and Agile: Think of how you can leverage the best from both worlds  Focus on empowerment of team can increase team’s strength.  Flexibility in allowing and encouraging adjustment  A more intimate way of working with customers and building strong relationships  Focus on just the “right” amount of rigor and documentation.  Clear guidance on project initiation and closure  Communication approach that ensures common understanding for all  Money management. Well-versed experience in budget management, reporting, and forecasting.  Risk management techniques From PMBOK: From Agile:

© 2012 Forrester Research, Inc. Reproduction Prohibited 25 Let business value priorities drive the path to more Agile adoption  Scale Agile with business teams that buy in the new approach.  Use internal sources to identify business priorities: EA, strategic plans, and business strategy.  Identify the most important value streams for your business, and organize around them. Specify value by specific services/ products. Identify the value stream by service/ product. Make value flow without interruption. Let the customer pull value from the supplier. Continually improve — to perfection!

© 2012 Forrester Research, Inc. Reproduction Prohibited 26 Look for new types of business value  Increased predictability  Increased certainty  Increased speed to market (cycle time)  Improved team morale

© 2012 Forrester Research, Inc. Reproduction Prohibited 27 To succeed, it’s really all about holistic transformation for your AD&D organization Greater business value Change leadership Communication Value measures IT-business Alignment Cross-functional teams Agile processes and practices PM Technology and tools Architecture Lean Thinking Source: February 3, 2011, “Transforming Application Delivery” Forrester report

© 2012 Forrester Research, Inc. Reproduction Prohibited 28 Agile development addresses today’s business challenges. It also addresses issues of business value more than past approaches. But adopting Agile is one thing; scaling is another. By scaling, the reward is greater business value. Recommendations Agenda

© 2012 Forrester Research, Inc. Reproduction Prohibited 29 Adopt and scale agile to catch up with the pace of business change Business value Increased predictability Increased certainty Increased speed to market improved team morale Change Agile adoption at scale requires behavioral change. Water-Scrum- fall Agile isn’t a hammer — so stop looking for nails. Strategy Use a framework to set your feet on the right path. Cycle time EV Sales, marketing, revenue, etc.

© 2009 Forrester Research, Inc. Reproduction Prohibited Thank you Diego Lo Giudice blogs.forrester.com/diego_lo_giudice

© 2012 Forrester Research, Inc. Reproduction Prohibited 31 Selected Forrester research  February 8, 2012, “Determine The Business And IT Impact Of Agile Development”  January 12, 2012, “Case Study: IOR Transformed To Increase Business Agility”  January 10, 2012, “Navigate The Future Of Agile And Lean”  August 25, 2011, “Update Your Application Development Sourcing Strategy To Drive Innovation And Differentiation”  July 26, 2011, “Water-Scrum-Fall Is The Reality Of Agile For Most Organizations Today”  February 3, 2011, “Transforming Application Delivery”