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Agile/Scrum projects are often used to implement both product line strategy and operational strategy.  They can be used with customer projects – but there are challenges with that approach.

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Quick reference

Strategic Alignment

Agile/Scrum projects are often used to implement both product line strategy and operational strategy. They can be used with customer projects – but there are challenges with that approach.

When to Use Strategic Alignment

When doing strategic planning, a company should consider the use of Agile/Scrum methodology for product development, product upgrade and system upgrade projects.

Instructions

  • The Agile/Scrum methodology has the advantage of a practicable schedule and cost (at least personnel costs). With the corresponding disadvantage of variable scope. When schedule or budget is more important than scope, the Agile/Scrum methodology is often the preferred project management approach.
  • Product development projects or new product introductions that are used to advance a product line strategy are often better managed as Agile/Scrum Projects.
    • Product line strategy identifies timing and general features/functions of new product and service offerings – relating these to business strategy and market dynamics.
    • Products that are seasonal in nature or that must be ready by a specific date (introduced at a trade show) are more likely to complete on time with Agile/Scrum.
    • Story Cards and the Produce Backlog are excellent tools for managing shifting customer requirements.
  • Process or system improvement projects are often prioritized and funded through the operational strategy planning and budgeting process. Many of the upgrade and improvement projects are better managed as Agile/Scrum projects.
    • Operational strategy planning and budgeting allocates resources to improve organizational performance or capacity.
    • It is relatively easy to create a high level estimate for Agile/Scrum projects by just estimating the number and size of the Sprints.
    • When upgrade projects must be complete before a firm date, such as a planned plant shutdown, a trade show, or product line transfer; the Agile/Scrum methodology adds confidence to meeting the date. 
  • It is difficult to use Agile/Scrum with customer projects – by that I mean a project that is done under contract for a customer. While these projects often have fixed schedule and cost, which would seem to make them candidates for Agile/Scrum; they also will normally have a fixed scope, which is incompatible with Agile/Scrum.
    • Customer normally does not prioritize between scope, schedule, and cost. All three are mandated by contract.
    • Negotiate with the customer about when to use the Agile/Scrum methodology. If planning to use Agile/Scrum, get the customer’s concurrence and cooperation with the Product Owner.  Ideally the Product Owner is able to work directly with the user in the Customer organization, and not just the Purchasing department.

 

Hints and Tips

  • Since strategy planning and implementation is an ongoing process with the desired strategy constantly being changed and updated; it is often best to manage strategic projects using Agile/Scrum.
  • Be very careful using Agile/Scrum with customer or externally funded projects. If the stakeholders in the funding organization do not understand the reprioritization of Stories in the Product Backlog, they may come to believe the project is out of control. 
  • If scope is mandated in a contract, it is very difficult to use Agile/Scrum because there is no easy way of prioritizing. All scope must be done or penalties will apply. Anything not on the listed scope cannot be done, or allegations of fraud can be made.
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  • 00:03 Hi, this is Ray Sheen.
  • 00:05 Well, we've looked at some of the challenges to align the organizational
  • 00:08 processes with the Agile methodology.
  • 00:11 Now, let's look at how well Agile/Scrum aligns with strategic planning and
  • 00:16 implementation.
  • 00:17 I wanna focus first on product line strategy since
  • 00:21 Agile/Scrum is often used for product development.
  • 00:24 First, if you are not familiar with what we mean by a product line strategy,
  • 00:28 it is the plan for what types of products and services will be
  • 00:31 introduced to the market and the timing of when they will be introduced.
  • 00:34 It's used to plan market share and sales forecasts; it also
  • 00:39 drives the development of new products and customer-facing processes.
  • 00:44 The product line strategy will identify the primary elements of scope and
  • 00:48 timing for the projects, so that the business is able to take advantage
  • 00:52 of market opportunities and respond to competitors.
  • 00:55 A huge advantage of Agile/Scrum is the Timebox Sprint or
  • 00:59 Release schedule that provides a certainty in the availability date.
  • 01:04 If the business or product line is seasonal, this is crucial to ensure that
  • 01:07 the product is ready on time for the season, whatever that means.
  • 01:12 If the competition releases a new product or features, the Timebox schedule allows
  • 01:16 sales and marketing to tell customers the availability date for
  • 01:20 the company's response.
  • 01:22 In fact, it is another advantage of the Agile/Scrum methodology.
  • 01:26 The Scrum Team can change the features and functions
  • 01:29 by simply adding a new Story Card and reprioritizing the product backlog.
  • 01:33 In this manner, the product line strategy can stay very responsive to the market.
  • 01:40 So, that is the product line strategy.
  • 01:42 Now, let's look at operational strategy.
  • 01:45 By operational strategy, I mean the strategy for
  • 01:47 implementing and improving operational processes and capacity.
  • 01:51 So, this would be things like installing or upgrading the ERP system.
  • 01:54 It would include facility expansions or process upgrades in the manufacturing or
  • 01:59 service departments.
  • 02:01 These projects are normally identified and planned, at least at a high level,
  • 02:05 as part of the annual strategic planning and budgeting process.
  • 02:08 The timing for the project and
  • 02:10 the approximate level of spending are determined at the point.
  • 02:14 One of the advantages of using the Agile/Scrum approach for these projects
  • 02:17 is that it can simplify the estimate of time and money to do these projects.
  • 02:21 The estimate is based upon the number of Sprints and
  • 02:24 the size of the Scrum Team in each Sprint.
  • 02:26 The Agile/Scrum methodology works particularly well for
  • 02:29 projects with a firm completion date.
  • 02:32 The Sprint schedule and Release schedule will help to ensure that the date is met.
  • 02:36 Some examples would include the implementation of an upgrade during
  • 02:39 a one-week plant shutdown that will happen between Christmas and New Year's.
  • 02:44 When upgrade in the manner in which the customers can access data
  • 02:48 on the website that needs to be available to demonstrate at an industry trade show.
  • 02:52 Or even the case where a product line must be transferred from one facility to
  • 02:56 another by a certain date, because the first facility is being repurposed.
  • 03:02 The last topic in this general category is the customer funded or sponsored project.
  • 03:08 In some cases, a new product is being developed because a customer
  • 03:11 has given us a contract to develop the product.
  • 03:14 It's difficult to use Agile/Scrum on this type of project.
  • 03:19 This type of project usually includes a contract with a customer where the scope,
  • 03:23 schedule, and the price the customer will spend is specified.
  • 03:27 Since it is a contract, all of these are required; there is no prioritization.
  • 03:31 Just do it all, and not any more than what is specified.
  • 03:36 If you want to use Agile/Scrum, you will probably need to go through an education
  • 03:40 process with the various business leaders act your customer.
  • 03:44 If they are not using Agile methods, they will be expecting traditional project
  • 03:48 management and all the traditional project management tools and techniques.
  • 03:52 You will need to help them understand the benefits and
  • 03:55 limitations of the Agile/Scrum methodology.
  • 03:58 Using Agile/Scrum is likely to violate their procurement policies.
  • 04:01 Flexible and reprioritized scope without a formal contract change and
  • 04:06 renegotiation of price and schedule are probably not allowed.
  • 04:10 Be certain you have buy-in from both the customers' management team and
  • 04:14 their purchasing department before using Agile/Scrum in customer-funded projects.
  • 04:21 Agile/Scrum is particularly well-suited to strategic
  • 04:25 projects that have a fixed date and some flexibility with respect to scope.
  • 04:30 But, they often don't work well on customer-funded projects,
  • 04:34 because of the contractual demands of fixed scope, schedule and price.

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