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This question is particularly valid because: Classic or first-generation Agile methodologies do not tackle this question sometimes on purpose Scaling Agile methodologies to larger organizations raises a host of questions specific to agile development with larger teams. Among the key concerns that enterprise-level Agile methodologies must handle are: Visibility : how do you keep track of the Work-in-Progress of hundreds of small teams, and the way their work combines into features, when the teams are largely autonomous and self-organised?

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How do you get a sense of schedule or cost? Coordination : how do you get teams of hundreds of people to communicate and coordinate their work in such a way as to deliver the features for which they are responsible, with an acceptable level of quality, and in a reliable manner? Alignment : how do you make sure that these autonomous and self-organised teams all work in the right direction to further your strategic goals? Risk-management : how do you ensure that failure does not take down the whole organization? This approach is anathema to companies that are seeking to deploy agile at scale.

Some businesses in our research base are taking a different approach. Overall budgeting is still done yearly, but road maps and plans are revisited quarterly or monthly, and projects are reprioritized continually. A large European insurance provider restructured its budgeting processes so that each product domain is assigned a share of the annual budget, to be utilized by chief product owners. Part of the budget is also reserved for requisite maintenance costs. Chief product owners are charged with the tactical allocation of funds—making quick decisions in the case of a new business opportunity, for instance—and they meet continually to rebalance allocations.

SAFe Agile Tutorial: What is Scaled Agile Framework

Meanwhile, product owners are responsible for ensuring execution of software-development tasks within hour work windows and for managing maintenance tasks and backlogs; these, too, are reviewed on a rolling basis. As a result of this shift in approach, the company has increased its budgeting flexibility and significantly improved market response times. A handful of companies are even exploring a venture-capital-style budgeting model. Initial funding is provided for minimally viable products MVPs , which can be released quickly, refined according to customer feedback, and relaunched in the marketplace—the hallmarks of agile development.

And subsequent funding is based on how those MVPs perform in the market. Under this model, companies can reduce the risk that a project will fail, since MVPs are continually monitored and development tasks reprioritized. Typically there is less waste and more transparency among portfolio and product managers, and it becomes easier for the company to scrap low-potential projects early.

Revamping an operating model is a large undertaking.

Introduction to Scrum - 7 Minutes

There will be significant risks to address and short-term disruptions as new ways of working take hold. As with any large change-management initiative, such a transformation will require long-term commitments from employees at all levels, in all functions and business units. This approach makes most sense when the company has only limited support from senior management for larger changes and needs to prove the business case quickly.

For the most part, however, the separate organizations created under the lab approach tend to remain separate rather than influencing change across the organization. For this to work, senior leadership must be all in from day one, which is likely to be the case in only a small subset of companies. Under this model, individual teams are reconfigured as agile teams in waves, while elements of a new operating model are deployed in spikes.

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A large technology-solutions provider, for instance, needed to ramp up its digital capabilities fast. The company transitioned product-development teams to agile practices in waves; 5 were included in the first training and deployment cycle, while close to 20 were part of the second.

As each successive wave of teams was indoctrinated to agile, feedback was collected and training materials were developed or revised for the next set of teams. Agile coaches were also installed to guide teams. It adjusted its operating model so the product-development group could collaborate more closely with the IT operations group in a true DevOps model. As a result of these changes, time to market accelerated dramatically; because teams were cocreating products, the number of defects and the rework required decreased.

Companies that are finding small-scale success with agile development practices may be loath to mess with a good thing, figuring it best to avoid the risks that widespread adoption might present. One of the chief risks in a digital business world, however, is standing still. To keep pace with new market entrants, emerging technologies, and changing customer expectations, companies will need to find ways to extend their capabilities in agile software development to all functions and business units.

They must be willing to adapt the very fabric of their organizations and give agile methodologies the space and support they need to thrive. McKinsey uses cookies to improve site functionality, provide you with a better browsing experience, and to enable our partners to advertise to you. Detailed information on the use of cookies on this Site, and how you can decline them, is provided in our cookie policy. By using this Site or clicking on "OK", you consent to the use of cookies.

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Subscribe Sign In. An operating model for company-wide agile development. This philosophy was also focused on software development and became popular in the s and 90s. The underlying intent of RAD was that the design did not have to be complete before work could begin. The thinking was that as the software project evolved, the participants in the project would be able to refine their design thinking as they looked at some of the software already working.

This RAD thinking extended a topic that was already well known in the engineering and construction industry called design-build. The design-build concept became popular in the mid s and early s. A departure from the concept of design, then bid, then build, a design-build project was one in which a large overreaching design would be made at a high level then in more detail for early elements of the construction.

This has some of its roots in even earlier project management thinking called rolling wave. Rolling wave planning is a personal favorite. A schedule for the project is made at a summary level, and right next to it, the immediate future of the project is planned in much more detail.

Enterprise-Scale Agile Software Development (Applied Software Engineering Series) | Book Series

What all of these concepts have in common is the absence of a complete rigid schedule before the project starts. Nor are such schedules credible for these kinds of projects. Yes, it can. Many IT organizations are embracing agile methodologies as a primary method of managing development projects. The most visible benefit to the organizations using this approach is the iterative release of useable functionality. The client starts to see returns from the development as each piece is completed and, as the project progresses, the depth and richness of the development increases.

A less visible but much more important aspect of these environments is that clients naturally become an integral part of the design, working with the development team more and more as the project progresses and they can see and comment on what they are receiving. We are not recommending turning your entire project management office into an agile-only environment for non-software projects. In fact, even in software-only project management offices, common project management techniques almost always co-exist with agile techniques.

What are the challenges of scaling Agile?

It is easy to imagine this kind of structure working well in an enterprise re-organization project or an enterprise corporate merger project or an enterprise office move project. Think of the two options:.

There are, of course, advantages to each approach. The Big Bang approach is much more likely to deliver what was originally designed.

An operating model for company-wide agile development | McKinsey

The Big Bang approach also has a much higher risk of being canceled before it can deliver any value at all. The phased approach is much more likely to end up delivering something that is different from what was originally intended. The phased approach is also much more likely to be canceled once some level of diminishing returns of benefit is reached. On the plus side, the phased approach is much more likely to deliver something that the client will be happy with and, is much more likely to deliver value since it will be delivered a bit at a time with the release of each phase.

There are so many sources of great information on agile techniques that it is impossible to list them all here. Wikipedia is a good starting point. Still wondering if agile is applicable outside the software department?