Valuing Agile: the financial management of Agile projects: the financial management of Agile projects (PDF)

Valuing Agile The Financial Management of Agile Projects
	Contents
	List of figures
	List of tables
	About this guide
	Foreword
	Preface
	Acknowledgements
	1 Introduction to Agile
		1.1 The Agile approach
		1.2 Agile software development
		1.3 Agile techniques and practices
			Table 1.1 Some common Agile techniques
			Table 1.2 Some common Agile practices
		1.4 Product development
			Figure 1.1 The Scrum process model
		1.5 Project management
			Figure 1.2 The DSDM process model
		1.6 Related disciplines
		1.7 Financial challenges
			Table 1.3 Five levels of Agile planning
		1.8 Concluding remarks
	2 Requirements, estimation and contracting
		2.1 Overview
			Figure 2.1 The relationship between requirements, estimation, transaction costs and governance
		2.2 Requirements
			Figure 2.2 User story map
		2.3 Estimation
			Figure 2.3 The cone of uncertainty
			Figure 2.4 Planning Poker cards
		2.4 Team velocity
		2.5 Prioritized incremental delivery
		2.6 Types of contracts
		2.7 Agile contracting
			Figure 2.5 Project variables (traditional versus DSDM)
		2.8 Government contracts
		2.9 Concluding remarks
	3 Strategy, budgeting andexpenditure
		3.1 Strategy, portfolios and projects
		3.2 Agile budgeting
			Figure 3.1 Agile cycle of planning, appraisal, funding and validation
		3.3 Financial statements
		3.4 Capital and operational expenditure
			Figure 3.2 DSDM partition of capital and operational expenditure
		3.5 Concluding remarks
	4 Profitability and Agile financial performance
		4.1 Understanding profit
			Table 4.1 Project direct and indirect costs (i.e. overheads
			Table 4.2 Comparison on basis of apportionment
		4.2 The significance of timing
			Table 4.3 Discounted cash flows and net present value
			Figure 4.1 Computation of NPV using Microsoft Excel
		4.3 Agile impact on ROI
			Figure 4.2 Comparison of NPV profiles for traditional (dashed) and Agile (solid) projects
			Figure 4.3 Decision point analysis of Agile projects
		4.4 Worked example
			Table 4.4 Anticipated project costs and revenues
			Table 4.5 Discounted cash flows for Agile and phased project approaches
			4.4.1 Net present value
			Figure 4.4 Discounted Agile cash flows
			4.4.2 Profitability index
			4.4.3 Payback period
			4.4.4 Financial performance summary
			Table 4.6 Summary of financial performance metrics
		4.5 Concluding remarks
	5 Value and benefits realization
		5.1 Understanding value
		5.2 Social value
		5.3 Communicating value
		5.4 Earned value management
			Figure 5.1 Example of a burn-up chart showing schedule variance during an iteration
			Table 5.1 Project tracking metrics
		5.5 Benefits realization and assessment
		5.6 Concluding remarks
	6 Managing uncertainty
		6.1 Understanding risk
		6.2 Agile risk management
			Figure 6.1 Mapping of risk exposure (including ranges) to risk response strategies
			Figure 6.2 Illustrative risk burn-down chart
		6.3 Costing risk
		6.4 Sensitivity analysis
			Table 6.1 Scenario-based project and operational cash flows
			Table 6.2 Sensitivity analysis of project cash flows
		6.5 Foreign exchange risk
			Figure 6.3 Hedging against foreign currency risk
			Table 6.3 Transaction costs and exchange rates
			Table 6.4 Strategies for managing exchange rate risk
		6.6 Credit risk
		6.7 Decision point analysis
		6.8 Concluding remarks
	Appendix A Analytical treatment of cash flows
		A.1 Project NPV and operational annuities
		A.2 Incremental rates of return
	Glossary
	Bibliography
	Index