Budgeting in a Lean Agile world

Facebook
Twitter
LinkedIn
Pinterest
WhatsApp

Budgeting. 

Not many statements cause as much dread in business or IT leaders as “It’s time to review your budget for next year”.  Budgets within any enterprise, but especially in the larger ones, are complex and difficult.  In our studies and work with Lean Agile Budgeting (LAB) we have learned that the average company spends about 30% of its yearly budget simply to manage its budget.  (Many CFO and financial people feel that this number may actually be higher).  Why is this?  Why do we put so much emphasis on something that is almost always (if we are honest) wrong?

The yearly budget cycle typically looks like this:

We spend so much time creating a budget, usually in the June-August time frame (for fiscal and calendar year sync companies).  And yet invariably when we start to implement on these budgets they turn out to be wrong.  This leads to endless change management, budget reviews, and many slapped wrists for being wrong. 

The problem is that we have based our budget cycles on predicting the future, and we as humans are terrible at predicting the future.  Our crystal ball is broken, and never really worked well in the first place.  When we base a yearly budget cycle on predicting we throw away the advantage that we all have; the ability to adjust based on new information.

Forecasting is a common practice in traditional budgeting, however, the term Forecast should not be used as a predictive tool, but as a learning tool.  We create forecasts to do ‘what-if scenarios, to learn about opportunities, and to better prepare for unknown outcomes.
When it comes to creating budgets the key is to create a forecast that allows us to learn and plan based on what we know today but also anticipates pivots and adjustments as we gain more knowledge during the actual implementation.  The key is to create a disciplined approach that allows for fast, non-disruptive adjustments.  This is the heart and soul of Lean-Agile Budgeting (LAB).

But how can this be done in today’s traditional, detail-oriented, regulated, and controlled budgeting approach?  With incremental changes.  I have worked with several companies that have begun this journey, and the key that has emerged is to treat your current budgeting process as a tangled ball of yarn.

To be successful you cannot just cut the ball of yarn in half, instead, you have to start pulling on one string at a time.  This allows you to learn in relative safety how to progress towards a budgeting process based on Lean and Agile principles and practices.  Implementing practices such as Weighted Shortest Job First (WSJF) for prioritization or Participatory Budgeting to gain more information on how to distribute the budget will begin to untangle that ball of yarn.

Imagine being able to streamline your budgeting process using Lean and Agile principles and practices to reduce this budget managing cost.  What better outcomes could you create for your customers and stakeholders?  What more important things could your finance group spend their time on to help the company thrive?

Subscribe for Email Updates:

Categories:

Tags:

AI
Jira Plans
Introduction to ATDD
Lean-Agile Software Development
Kanban
PI Planning
Scrum Values
Agile Israel Events
speed @ scale
Sprint Iteration
Lean and Agile Techniques
Sprint Retrospectives
Manage Budget Creation
Self-organization
Certified SAFe
GanttBan
Jira admin
Professional Scrum Product Owner
EOS®
Presentation
agileisrael
Rovo
Video
Agile Games
System Archetypes
Applying Agile Methodology
Agile in the Enterprise
Large Scale Scrum
Keith Sawyer
QA
Agile Techniques
ARTs
Systems Thinking
SAFe DevOps
Nexus Integration Team
Agile Program
Atlaassian
Agile Product Development
SA
Coaching Agile Teams
Agile and DevOps Journey
Agile Basics
Enterprise DevOps
PI Objectives
AI Artificial Intelligence
Perfection Game
Managing Risk on Agile Projects
Agile
Accelerate Value Delivery At Scale
Quality Assurance
Scrum.org
Jira Cloud
Agile Product Ownership
Legacy Enterprise
Lean Agile Management
Release Train Engineer
SPC
Code
Agile Release Management
Lean Budgeting
Lean Risk Management
BDD
POPM
ATDD
Business Agility
Portfolio for Jira
speed at scale
Agile Contracts Best Practices
Sprint Planning
Scrum
Product Ownership
SAFe
Legacy Code
Risk-aware Product Development
Agile Release Planning
Scrum Primer
Test Driven Development
Amdocs
Nexus and SAFe
Agile Community
LPM
Scrum With Kanban
Agile Risk Management
Continuous Planning
Kanban Game
Kaizen
Jira
LeSS
Team Flow
Value Streams
Story Slicing
RSA
Lean Agile Leadership
Kanban Basics
Agile Games and Exercises
Hybrid Work
Development Value Streams
ScrumMaster Tales
Agile Project
Lean Agile Organization
Scrum and XP
Continuous Delivery
Iterative Incremental Development
ROI
Scaled Agile Framework
Pomodoro Technique
transformation
lean agile change management
Risk Management on Agile Projects
Artificial Intelligence
System Team
Frameworks
System Integration Environments
Agile Assembly Architecture
Built-In Quality
Software Development Estimation
chatgpt
Retrospectives
Limiting Work in Progress
Webinar
An Appreciative Retrospective
Agile India
Confluence
Releases Using Lean
IT Operations
Rapid RTC
RTE
Introduction to Test Driven Development
Kanban Kickstart Example
Agile Exercises
Agile Mindset
User stories
Tools
Managing Projects
Operational Value Stream
AgileSparks
Agile for Embedded Systems
Advanced Roadmaps
Change Management
Effective Agile Retrospectives
A Kanban System for Software Engineering
Planning
Lean and Agile Principles and Practices
WIP
Atlassian
ATDD vs. BDD
Software Development
Product Management
Agile Development
ART Success
Agile Israel
Scrum Master
Continuous Integration
Process Improvement
Agile Outsourcing
Agile Project Management
The Kanban Method
Program Increment
Implementation of Lean and Agile
Tips
RTE Role
Covid19
What Is Kanban
Entrepreneurial Operating System®
Nexus and Kanban
TDD
Daily Scrum
Spotify
Elastic Leadership
The Agile Coach
Risk Management in Kanban
Certification
Scrum Guide
Principles of Lean-Agile Leadership
Professional Scrum with Kanban
Implementing SAFe
Scrum Master Role
Lean Startup
Professional Scrum Master
NIT
Acceptance Test-Driven Development
Lean Agile
SAFe Release Planning
Kanban 101
DevOps
Lean Software Development
ALM Tools
Nexus
Agile Testing Practices
Lean-Agile Budgeting
Achieve Business Agility
Agile Delivery
Games and Exercises
Engineering Practices
Agility
predictability
Nexus vs SAFe
Slides
Lean Agile Basics
Agile Marketing
Continuous Deployment
Reading List
Continuous Improvement
Kaizen Workshop
AgileSparks
Logo
Enable registration in settings - general

Contact Us

Request for additional information and prices

AgileSparks Newsletter

Subscribe to our newsletter, and stay updated on the latest Agile news and events

This website uses Cookies to provide a better experience
Shopping cart