Top 5 Reasons Companies Become Agile
Ninety-five percent of companies are adopting agile approaches for building products (according to the 10th Annual State of Agile Report). Industries outside of software now make up the majority. Companies want to become agile because agile values and principles:
- Ensure customer satisfaction by frequently delivering working functionality.
- Fully empower cross-functional and self-organizing teams to build what their customers want.
- Rely on simple, low-fidelity communication (e.g. physical collaboration tools, face-to-face communication and collocation) to optimize team collaboration.
- Require simplicity and removal of wasteful activities.
- Use feedback loops to continuously inspect and adapt functionality and process.
The benefits of agile adoption are real, and some are immediate. But complete agile transformation typically takes at least 1-3 years. The top five reasons companies make such an investment include 30-40% faster time to market, 30-70% cost savings, greater flexibility for mid-stream changes, higher quality and greater transparency.
1. Faster time to market
A shorter time to market gives ‘early mover’ advantage for your product, as well as earlier return on investment. Scrum delivers value to the customer 30-40% faster than traditional methods because of the following:
- Development begins sooner. Upfront documentation of waterfall projects is unnecessary with a dedicated, embedded product owner to help the developers progressively elaborate and clarify requirements just in time.
- The highest value requirements can be delivered to the customer in weeks rather than months, or when the entire project is completed.
- Development teams swarm on functionality to completion each sprint, resulting in shippable functionality as often as every week.
2. Cost savings
Agile practices reduce costs 30-70% over traditional methods, which increase return on investment in the following ways:
- Early course correction through direct, frequent and consistent feedback loops with key stakeholders and customers. Going off course by only days or weeks costs much less than going off course by months or years.
- Fewer defects because of automated and continuous testing throughout the sprint reduces wasted work and enables faster deployment.
- By prioritizing highest value and risk functionality at the beginning of a project, if value or risk are not validated or mitigated up front, scrum teams can pivot or redirect efforts to more valuable opportunities sooner rather than later.
3. Greater flexibility for mid-stream changes
At any point in an agile project, changes can be introduced because vertical slices of the product backlog are designed, developed, tested, documented and integrated during each sprint. Planning is essential, and the iterative and continual planning process of scrum significantly minimizes the threat of change and adaptation throughout a project because of the following factors:
- Since sprints are short, scrum teams can immediately adapt to a change in market conditions. The shorter the sprint, the more frequently teams can adapt.
- Requirements are prioritized by business value and risk. Scrum teams know they are working on the highest priority and risk functionality during any given sprint, thus lowering the impact of mid-stream changes.
- Test automation and continuous integration ensure each product increment is shippable, even if the increment’s requirements were added to the product backlog after the project began.
4. Higher quality
The agile approach to building quality products is to build in quality from the start, rather than putting off comprehensive testing until the end of a project. Agile projects have much lower late stage defects than traditional projects for the following reasons:
- Automation reduces the amount of manual testing, which expands the coverage of testing that can take place each sprint.
- The scrum team’s definition of done ensures defects are identified and fixed during the sprint because no requirement is considered complete until it has zero critical defects.
- Product owner daily feedback, stakeholder and customer feedback every sprint and end user feedback every release (which is multiple times per day with continuous integration) ensure defects get caught before deployment, and critical issues get resolved quickly.
5. Greater transparency
Most agile organizations use scrum as a framework for organizing work and exposing progress. As an empirical process control model, scrum demands unfettered transparency which enables frequent inspection and immediate adaptation through:
- Daily coordination in daily scrums and in-the-moment collaboration with the business through the product owner.
- Inspection of working, shippable functionality rather than status reports at the end of each sprint directly between the people building it (developers) and the customer.
- Consistent inspection and adaptation for continuous improvement of the scrum team’s tools, processes and environment.
About the author: This article was written by Platinum Edge, LLC, an organization improvement company that supports businesses looking to strategically improve project ROI. Platinum Edge’s founder, Mark C. Layton is the author of Wiley & Sons “Agile Project Management For Dummies” and "Scrum For Dummies", and has been a guest multiple times on both the PM PrepCast and the Agile PrepCast. You can learn about Mark and his expertise at the Platinum Edge website or on LinkedIn.