The financial processes of companies can defeat their own efforts to become more agile. It’s simply impossible for an organization to be adaptable if their project processes require all projects to be specified up-front and funded months ahead of their starting date.
Tackling the financial process changes in our organizations is one of the make-or-break aspects of helping organizations become Agile and adaptable.
In this episode, we talk about Lean and Agile Financial Planning (PDF article download), an approach that tries to adopt Agile and Lean thinking in the funding and financial processes of an organization.
Both Maarit and Rami have worked at Nokia mobile phones when the software and hardware giant was trying to move towards an agile way of working.
Rami was a financial controller and as such responsible for some of the financial decision and follow-up processes in the organization. While working with Maarit, they recognized that the existing financial processes were not going to help their aim of making Nokia a more agile organization. They needed a new approach.
The approach they devised helped fund the work without considering the detailed content of the work (detailed scope). Decoupling the funding of work, from the content/scope discussion was one of the major changes that Lean and Agile Financial Planning brought about. But there were more, and we talk through those in this episode.
The traditional funding processes for work in organizations borrow heavily from the Project Management community’s work on governance. However, that may be now inadequate because of the competitive pressure and constant changes we see in the market. Nokia itself is a great example of how, when you fail to adapt quickly, the market may completely destroy the company.
In Agile organizations we do continuous development. We continuously explore the needs of customers, develop and deliver software to production. This quick pace of development has left the old funding processes behind and shown that those approaches are now inadequate.
For organizations to thrive in the software-driven business environment we are in, we need be intimately familiar with how software is developed, and how flexible and quick to adapt it can be. Once we understand that, the need for a new funding mechanism becomes obvious. In this episode, we talk about the process of recognizing if you are negatively impacted by slow funding processes and what you can do to start the change you need in the software-driven business environment.
Maarit Laanti, co-author of Lean and Agile Financial Planning is also the author of an upcoming book on Agile Portfolio Management. This book starts from her understanding that the old management paradigms are no longer adequate for software organizations.
It is a book about how companies can, not only survive, but benefit from the digital disruption that is affecting them.
About Maarit Laanti and Rami Sirkiä
Maarit Laanti belongs to a handful of pioneers on large-scale agile transformations. Her PhD titled as "Agile Methods in Large-scale Software development applicability and model for use” is the world’s first PhD on agile in large-scale – published in January 2013.
Her work at Nokia smartphones and in Nokia Mobile Phones, which largely influenced on Scaled Agile Framework.
In 2013 she founded a company named Nitor Delta, a large-scale Lean and agile transformation, coaching and consulting firm that has grown from one person to 16 people, Currently, Maarit Laanti is working on a book on Agile Portfolio Management.
Rami Sirkiä is the creator of the Lean-Agile Budgeting of Scaled Agile Framework (2013). Speaker at multiple seminars and events on modern finance function in agile world.
Rami is an Experienced Lean-Agile and SAFe transformation coach and the creator of the Lean-Agile Financial planning approach together with Maarit.