Justify an Investment in a
Scaled Agile Framework Agile Release Train
We continue to go through the systematic, low-risk set of steps for determining whether SAFe is a worthy investment for your organization. We’ve arrived at Step 3 after having reviewed an Executive SAFe Overview and Leadership Training (see links above).
Step 3 is to launch an initial, pilot SAFe Agile Release Train - or ART.
However, this requires a much higher commitment of time and treasure. Let’s explore how to easily justify such an investment. First let’s review again the kinds of Business Results other organizations have realized after implementing SAFe.
Demonstrated SAFe Business Results:
Adopting SAFe is not something to take lightly - it's an investment of time and treasure.
But results like those above, even if we divide the lowest results numbers in half, significantly outweigh them.
So there’s consensus that this ‘SAFe thing’ looks promising. However, we still need to demonstrate the kind of return your organization ought to realize if it’s funded. Let’s build the beginnings of a business case to determine some of the benefits we hope to realize by adopting SAFe.
Here are a few of the typical challenges we see at many
of our clients:
- Massive amounts of rework
- Time to market/contract delivery pressures
- Regulatory compliance at the end uncovers expensive issues and slows delivery
- Long systems engineering cycles uncover late system integration breakage
- Defects found late- which cost much more, and take much longer, to resolve
- Delays due to bottlenecks with top-down decision making
- Too many meetings!
- Dependencies found late and take a long time to coordinate
- Clients are out front demanding more value, less cost and faster turnaround
Let’s just choose #1: "Massive amounts of rework."
Let’s use some industry standard numbers to put a value on the cost of rework. Below you can plug in numbers that more closely represent your organization.
Assumptions:
- 100 people (an ART is defined as between 50 -125 people)
- $100/hour fully burdened cost/person (incl salary, benefits, computer, office space, etc.)
- 2,000 working hours/year
- 40% rework (reasonable according to a number of clients!)
Calculations:
($100 x 2,000 hours) * 100 people = $20,000,000
$20,000,000 x 40% rework = $8,000,000 of rework/year!
In the ‘Business Results’ image to the left, it indicates that companies who implement SAFe realize a 20-50% increase in productivity.
If we apply a 20% productivity improvement (the lowest figure) to the 40% rework assumption, that would reduce rework by 8%, saving $1,600,000 by freeing up 16,000 hours of time. And this calculation doesn’t even consider the additional VALUE that could be created with these additional hours!
If this is even close, then an investment in a pilot ART launch seems quite modest.
Program Increment (PI) Planning
Sometimes referred to as the ‘Magic’ of SAFe, PI planning is a 2-day, co-located planning event with participation from every member of the ART team (50-125 people).
Wow you say… getting up to 125 people to the same 2-day session will eat up a chunk of my travel budget. And it will. However, co-located, face-to-face PI Planning really is the magic of SAFe, and it will return your investment many times over. However- there may be some folks who need convincing. We have a variety of models we can use to work with you to easily justify the expense. Here’s an example...
Obviously, there will be great differences in these numbers, but this is a common scenario that puts some numbers to the cost of PI planning:
True - that’s a lot of money.
But what’s the cost of building the wrong thing? Or making incorrect assumptions early in a large program that propagate over many months or years? What about unknown dependencies surfacing late, causing late integration breakage, massive delays and, yes REWORK? These are VERY expensive problems that most of our clients encounter more often than they’d like to admit.
In the example below, we’ve taken ONLY TWO of the benefits of PI Planning (Alignment and Dependency Management). It’s meant simply to be believable (and we’d be happy to explain how we arrived at these numbers!).
Soon you'll be saying,
we can't afford NOT to do PI Planning!
Congratulations!
You’ve successfully justified the investment of time and treasure to launch your first ART.
Head over to:
Preparing for & Launching an ART.
Additional Resources
Want to do more research first? Great! SAFe pulls a lot of its thinking from other thought leaders.
Here are a couple of books and resources that will challenge, and hopefully inspire, you.
SERC TALK: Can DevOps Practices Be Applied to Cyber-Physical Systems Development?
Presented by Dr. Steve Mayner of Scaled Agile, he presents to the Systems Engineering Research Center (SERC) some of the thinking behind how cyber-physical organizations (A&D, Automotive, etc.) are successfully implementing and benefiting from agile systems engineering and lean product development.
This easy to read book demonstrates how Harley-Davidson improved their 30-year average of .74 new model bikes per year to more than FOUR (4) models per-year leveraging cadence, flow and set-based design!
"Leading Change": 8-Steps to Leading Change (Kotter)
Because organizational change is hard, SAFe has incorporated Kotter’s 8-step process into its best practices for adoption. If we all agree that "culture eats strategy for breakfast," we need to address this reality head-on… and train leaders to lead! This video is an introduction.
*SAFe has also incorporated elements of Kotter's most recent book: "XLR8"
The Principles of Product Development Flow: Second Generation Lean Product Development (Reinertsen)
This book makes short work of how organizations can significantly improve outcomes by identifying ways to make objective, economic decisions including: quantifying the cost of delay, managing queues, reducing batch sizes, applying WIP constraints, etc. Lean product development is different than lean manufacturing!
Watch this video and learn more about 321 Gang.
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