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The second example relates to one of the “scariest” aspects of traditional Project Management, namely the budget. When using traditional project management (Waterfall), it is scary at the beginning because it is hard to define and get the initial approval. And later mainly because, if we are to be honest with ourselves, the initial estimates almost never match the actual needs. This happens for a number of reasons, or we could say, impediments.

 

Let’s say that we are a generic software company organized in a traditional way, based on the areas of expertise, namely vertical silos or cost-centers. The budget is distributed across these centers based on annual or even longer financial exercises. The traditional project-based approach where all these cost-centers need to contribute to the project spending with money, resources and effort creates a lot of overhead and friction. The process is slow and complicated. It leads to utilization-based planning and execution, tends to push a lot of work in progress, moves the people where the work is needed and so on.

 

These factors in turn lead to cost-centers becoming selfish units within the organization, value delivery is inhibited, “political” boundaries prevent cooperation and artificial borders are created. Even worse sometimes these silos are geographically different. The very hard challenge that a project manager faces is to connect these silos, make them cooperate, manage hand-offs and delays and fight on a daily basis to extinguish “fires”. Instead of this approach the SAFe organization of the enterprise follows the flow of value.

 

How to organize a company the SAFe way

 

The solution for organizing the company, in a high-level sequence of steps (which in reality need a lot of attention) is:

 

1. Identify what the products we are developing or producing are and what the services we offer to our customers are
2. Identify the entire sequence of steps used to deliver this value to the customers. This must include the whole sequence. This sequence is called a Value Stream and depending on the nature of the value delivered there can be two main types: operational and development
3. Identify the people who do the work, what systems they use or support the delivery, what the flow of information and materials is and what other resources might beneeded
4. The value streams will be mapped on concrete structures based on the configuration defined by the SAFe framework (solution trains and/or agile release trains). A key aspect is that the work will be moved where the people are
5. The money should be split between these Value Streams
6. The budgeting exercise should be a continuous process, meaning the redistribution of resources should follow the needs and business priorities of the Value Streams with continuous readjustments, or at least a couple of times per year

 

Everything described above should define a highly efficient self-organizing structure.

 

 

Handling overruns in a SAFe framework

 

Another big issue faced by a project manager is when overruns happen. A painful process of project accounting, re-budgeting, variance analysis, resource scramble, reassignments and so on begins. Which in fact just adds to the overall cost of the project and introduces a big amount of delays. Even worse, a “blaming game” starts between the vertical silos where the invoked reasons sound like: it was a technology challenge, it was a change in scope, it was the team or “your” team etc. The big question at this point is “Does it really matter?” because the crisis already happened, the money were already spent and the time was already consumed.

 

This problem has a very straightforward answer in SAFe. Funding Value Streams provides full control of spending with no costly and delay-inducing project cost variance analyses, no resource reassignments and no blaming game. The LPM group knows exactly what the budget for a specific value stream is, the people working within that value stream know what their priorities, their budget and resources are.

 

They are part of a program for an extended period of time (theoretically for an indefinite period) so in case of a Feature overrun the Solution managers, Product managers and business owners will just reassess the priority of continuing to work on that specific Feature as opposed to the rest of the features planned according to the road map and therefore delay them. The second option is to stop the work on the feature in question when other features have become more important.

 

Another critical aspect is that the situation needs to be communicated to the clients as well, and that the commitments might need to be renegotiated. This happens because either the budget and the delivery date are fixed and the scope cannot remain the same or, the second option is, that the budget and the scope are fixed but then the delivery date cannot remain the same. Making it transparent to the customers that SAFe (Agile) is adopted as a way of working and delivering should be a must have from the beginning.