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Topics: Agile
Agile vs. Waterfall: The Challenge for Finance, Quality, Risk and other areas
Agile vs. Waterfall: The Challenge for Finance, Quality, Risk

As I read the William M. (Bill) Sinnett book on the topic, I wondered what other areas agile businesses will have a challenge. In this case, the approach author approach was nicely presented, focusing on finance, stating that "CFOs will be challenged to align their financial, and accounting practices to support these practices with the right policies and technologies". I also see so many challenges in other areas, like Quality, Risk, and others.

What challenges do you see companies face as we face this new agile era?
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The book, states that "many companies are struggling to scale Agile throughout the enterprise, and often find it more difficult than adoption at the team level.

Also states that "Finance can be an impediment to Agile application development, from a cost accounting and a financial accounting perspective".

I do agree, that companies must prepare and align so it can be a success.
Sinnett, shares examples of finance challenges like:
Traditional cost accounting expects a long horizon with detailed cost estimates;
Traditional budgeting draws attention to budget overruns; and
Traditional financial accounting needs to segregate capital expenses from operating expenses.

What examples can you share of challenges in OTHER AREAS (not only finance)
I have some experience in these areas, and I don't think the difference is as great as it would seem. Remember that "Agile" is not a project management methodology. (Most people here seem to disagree with me, but I will die on that hill.) While finance wants long range forecasts and accounting is locked into annual reports, the rest of the company has to have some degree of agility or it will die. You simply can't predict what's going to happen over the course of a year, any more than you can keep your car in the same lane when you're driving across the continent.

If we didn't learn that in #2020, then we didn't learn anything.

You call this out perfectly when you state "traditional budgeting draws attention to budget overruns." Anyone who has managed more than a one project has probably had budget or schedule issues. (If projects didn't have them, we wouldn't need project managers.) So we already expect and respond to these kinds of problems. In that regard, nothing changes as a company becomes more agile.

What might change is that CFOs will innovate creative ways to respond to change more quickly. I worked at one large company that analyzed and released funding every quarter, depending on cash flows and portfolio success. They had already broken up the yearly cycle in order to respond to change. The next clever finance officer might find a way to make it monthly, if the company is ready for that.
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1 reply by George Lewis
Oct 04, 2020 8:12 AM
George Lewis
...
Wade, great input...
So, in regards to the book, aside from "finance" can you think of areas of challenge?
The first step to fail is talking about "Agile vs Waterfall". Agile and waterfall are not matter of comparison. Agile is an approach, Waterfall is a life cycle. Agile approach can be used in waterfall life cycles. Why people do not compare Lean with Waterfall? Because Lean is using in manufacturing with waterfall life cycles from decades. But is the same case, Lean is an approach and waterfall is a life cycle.
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1 reply by George Lewis
Oct 04, 2020 8:23 AM
George Lewis
...
Sergio, great inputs you gave... and we do agree.

By the way, we know of your expertise here... but, were able to read part of the book?

We actually think that the approach in this question is regarding the "finance" preparation/challenge that organizations face.

My question is, aside from "finance" can you think of areas of challenge/preparation does organizations needs in order for a smother agile journey?
Oct 03, 2020 3:14 PM
Replying to Wade Harshman
...
I have some experience in these areas, and I don't think the difference is as great as it would seem. Remember that "Agile" is not a project management methodology. (Most people here seem to disagree with me, but I will die on that hill.) While finance wants long range forecasts and accounting is locked into annual reports, the rest of the company has to have some degree of agility or it will die. You simply can't predict what's going to happen over the course of a year, any more than you can keep your car in the same lane when you're driving across the continent.

If we didn't learn that in #2020, then we didn't learn anything.

You call this out perfectly when you state "traditional budgeting draws attention to budget overruns." Anyone who has managed more than a one project has probably had budget or schedule issues. (If projects didn't have them, we wouldn't need project managers.) So we already expect and respond to these kinds of problems. In that regard, nothing changes as a company becomes more agile.

What might change is that CFOs will innovate creative ways to respond to change more quickly. I worked at one large company that analyzed and released funding every quarter, depending on cash flows and portfolio success. They had already broken up the yearly cycle in order to respond to change. The next clever finance officer might find a way to make it monthly, if the company is ready for that.
Wade, great input...
So, in regards to the book, aside from "finance" can you think of areas of challenge?
Oct 04, 2020 7:34 AM
Replying to Sergio Luis Conte
...
The first step to fail is talking about "Agile vs Waterfall". Agile and waterfall are not matter of comparison. Agile is an approach, Waterfall is a life cycle. Agile approach can be used in waterfall life cycles. Why people do not compare Lean with Waterfall? Because Lean is using in manufacturing with waterfall life cycles from decades. But is the same case, Lean is an approach and waterfall is a life cycle.
Sergio, great inputs you gave... and we do agree.

By the way, we know of your expertise here... but, were able to read part of the book?

We actually think that the approach in this question is regarding the "finance" preparation/challenge that organizations face.

My question is, aside from "finance" can you think of areas of challenge/preparation does organizations needs in order for a smother agile journey?
...
1 reply by Sergio Luis Conte
Oct 04, 2020 8:31 AM
Sergio Luis Conte
...
I will write the following just to put information about my work on Agile is not academic only and trying to send the message that it is possible to use it inside organizations. From 3 years ago I am leading the journey in my actual work place as the lead for LATAM. We are now in the last phase where we are implementing some tools like SAFe or DevSecOps just to name some, the last one more specific to IT. Agile is about to consider the organization as a system so there is not an specific area, is the organization as a whole. If you think about a specific area you are jeopardizing a foundational concept which is integration. That´s because today some "magic" solutions emerge to scale Agile which in fact are trying to fix a bad implementation and they are not working at all. Agile is a matter of architecture, not a matter of mindset or methods or whatever. Tools that can help to understand which areas to put focus? From Tom Peter´s Seven S to Zachman Framework you can take what best fit for the propose.
Oct 04, 2020 8:23 AM
Replying to George Lewis
...
Sergio, great inputs you gave... and we do agree.

By the way, we know of your expertise here... but, were able to read part of the book?

We actually think that the approach in this question is regarding the "finance" preparation/challenge that organizations face.

My question is, aside from "finance" can you think of areas of challenge/preparation does organizations needs in order for a smother agile journey?
I will write the following just to put information about my work on Agile is not academic only and trying to send the message that it is possible to use it inside organizations. From 3 years ago I am leading the journey in my actual work place as the lead for LATAM. We are now in the last phase where we are implementing some tools like SAFe or DevSecOps just to name some, the last one more specific to IT. Agile is about to consider the organization as a system so there is not an specific area, is the organization as a whole. If you think about a specific area you are jeopardizing a foundational concept which is integration. That´s because today some "magic" solutions emerge to scale Agile which in fact are trying to fix a bad implementation and they are not working at all. Agile is a matter of architecture, not a matter of mindset or methods or whatever. Tools that can help to understand which areas to put focus? From Tom Peter´s Seven S to Zachman Framework you can take what best fit for the propose.
George -

The DA folks have done a good job covering this is their DA for Enterprise work. The key ones I've encountered which also need to transform are:

1. HR - job ladders, rewards programs, performance evaluations
2. Procurement - firm fixed price for long term contracts are not a good idea with adaptive approaches
3. Architecture - if they collaborate with teams, great. If they preach from their ivory towers, bad.
4. PMOs - See #3
5. Control partners (e.g. Risk, Legal, Audit, Compliance) - if they have capacity to support teams by providing acceptance criteria and reviewing completed work items, great. Most don't...

Kiron
George,

'agile vs waterfall' is a misleading and ambiguous statement.
I see no opposites in the 2 terms. If I read it I think somebody wants to make something up. Cui bono?

- Agile organizations probably use waterfall lifecycles where appropriate (e.g. to create their tax statement)
- Agile development approaches which are often iterative and incremental can be spread on a timeline and voila you see a series of phases, probably more predictive than most waterfall life cycles
- agile mindsets stand for themselves, never heard about a waterfall mindset to contrast them with, probably because waterfall is a lifecycle model and not a way of thinking

As we know, the tail should not wag the dog, nor the elephant.

An organization is a system of units with particular purposes and specific rules and regulations to follow, like the elephant. All of these systems like finance, risk or quality have to respond to changing environments, in their specify setup. And they do. The trunk, the ears, the legs of the elephant survive and adapt, each in its own way.

Now the SW development part (the tail), which is only a rather small part of organizational IT by the way, has the good idea to reorganize itself, e.g. by forming a knot by bending itself, to better fend of the mosquitos. And it tells the other body parts to follow the example. Hmm, makes no sense.

So, society is business, governments and volunteer organizations.
...
1 reply by Wade Harshman
Oct 05, 2020 3:08 PM
Wade Harshman
...
'agile vs waterfall' is a misleading and ambiguous statement.

This is true. We in PMI and on this forum tend to have tunnel vision when we talk about "Agile." We're so focused on project management that we think business agility is nothing more than another way to manage projects. Unfortunately, this is a big misunderstanding.
Oct 04, 2020 10:31 AM
Replying to Thomas Walenta
...
George,

'agile vs waterfall' is a misleading and ambiguous statement.
I see no opposites in the 2 terms. If I read it I think somebody wants to make something up. Cui bono?

- Agile organizations probably use waterfall lifecycles where appropriate (e.g. to create their tax statement)
- Agile development approaches which are often iterative and incremental can be spread on a timeline and voila you see a series of phases, probably more predictive than most waterfall life cycles
- agile mindsets stand for themselves, never heard about a waterfall mindset to contrast them with, probably because waterfall is a lifecycle model and not a way of thinking

As we know, the tail should not wag the dog, nor the elephant.

An organization is a system of units with particular purposes and specific rules and regulations to follow, like the elephant. All of these systems like finance, risk or quality have to respond to changing environments, in their specify setup. And they do. The trunk, the ears, the legs of the elephant survive and adapt, each in its own way.

Now the SW development part (the tail), which is only a rather small part of organizational IT by the way, has the good idea to reorganize itself, e.g. by forming a knot by bending itself, to better fend of the mosquitos. And it tells the other body parts to follow the example. Hmm, makes no sense.

So, society is business, governments and volunteer organizations.
'agile vs waterfall' is a misleading and ambiguous statement.

This is true. We in PMI and on this forum tend to have tunnel vision when we talk about "Agile." We're so focused on project management that we think business agility is nothing more than another way to manage projects. Unfortunately, this is a big misunderstanding.

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