Budgeting for agile teams


9 May 2017

As organisations move away from thinking about projects with fixed budgets, scope and timelines, focusing, instead, on long-running digital services that can evolve over time, teams need a way to see their actual expenses in the context of their plans and regularly update their forecasts and resource needs so everyone in the organisation can make timely, evidence-based decisions that keep delivery on track.

Concepts like “Beyond Budgeting” are making this a reality.

It’s simply not cool anymore, to ask “how long will this project take and how much will you spend?” As agile ways of working become the norm a “project” can now take as long as you want it to and cost as much as you’re willing to spend, all while guaranteeing reasonably good outcomes.

It’s far better to ask: What’s your current burn-rate and what value are we getting for that? How much more do you need to deliver X? What about Y? What if we postpone that by 2 months? Or do slightly less? Or make it faster? Do you need more people? Or fewer? What does that look like?

Teams are getting better at forecasting what they can do in the short & medium terms. Frameworks like OKR are making it easier to look entire quarters ahead, but planning an entire year (or multiple years) is as good as using a divining rod to find water.

It means we can make very detailed views of the current reality and easily update them in real-time and make decisions about how to move our money and energy (e.g. people) around to achieve the best outcomes. Is a team burning “hotter” than anticipated but delivering outstanding results for the business? Let’s take some money from the team that happens to be underspending and under-delivering and give it to these guys. If things change in 3 months, we can do the reverse and ensure that our portfolio always stays balanced.

Enough already. Show me the money!

To help this process, I’ve created a simple template that I’ve used with multiple clients to help them create detailed plans as far ahead as they want and then manage against the current reality of filled roles, open roles, estimated & actual spend, delivery milestones, and more. It allows teams and stakeholders to easily see where they are now, then decide what that means and what to do about it. I’ve even used this technique to manage a £500m+ portfolio by “rolling up” the data into an organisation-wide view.

With greater transparency, comes greater clarity, then better choices, and finally, better results.

I've created a 5 min demo to show you how to use this template, yourself. If you have any questions or ideas I would love it if you would get in touch.


Get the template here.

Please note: This tool contains no personal or proprietary data. All data including but not limited to names, rates, line-items, roles, and pay-grades is completely fictitious and for demonstration purposes only. See the “README” tab in the document for full terms of use.

Cover photo: Peter Kappus

Thanks for reading! I'm always looking to raise my game and meet like-minded people so if you have questions, ideas, or suggestions, please contact me.