COG Blog

Annual Planning in an Agile World: Prioritizing and Funding Organizational Epics

Tue, 09 Apr 2024 14:00:53 GMT

Week 3: Prioritizing and Funding Organizational Epics

Week 3 of Annual Planning in an Agile World is all about the benefits of planning and funding in discrete and regular increments. If you’re interested in reading about how I got here, you can find the previous posts here: Annual Planning in an Agile World: The Problem at Hand (creativeopsgroup.com) .

In last week’s post, I talked about creating what I call “Organizational Epics.” They are defined by gathering the Voice of the Customer and gaining a deep understanding of your business processes, as well as any root cause analysis done on processes that are less than optimal. I also talked about linking these Epics to cross-functional organizational priorities and a Value Stream (aka End-to End Process).

The next step as you think about funding, is understanding if these Epics are:

Foundational Epics – work that must be done as a dependency to enable other scope items.
Operational Epics – work that must be done in order to “keep the lights on.”
Strategic Epics – work that will enhance the organizations’ ability to delight customers, gain market share, or disrupt the industry.

It is important to understand this level of detail so that work can be done in the appropriate order, thereby increasing overall throughput. But the real key is that the Epics should be distinct and achievable. If your Epic is “Implement a new ERP system” you should probably stop your planning there. An ERP implementation goes far beyond an Organizational Epic, will take multiple years, doesn’t account for any foundational or planning work, and realistically doesn’t need $10M+ in funding for next year.

If the strategic organizational goal is to replace the existing ERP system with a SaaS product, Functional and Technology leaders should then look at breaking that Elephant into more bite-sized pieces. Related to an ERP, a starting list of Epics might be:

Develop System Architecture for a SaaS-based ERP (2 months, foundational)
Gap Analysis of Current and Future State Architecture (3 months, foundational)
Foundational infrastructure upgrades (9 months, operational)
Organizational Impact and Readiness Assessment (3 months, foundational)
High-level ERP Scope Identification (6 months, foundational)
Data Preparation (9 months, foundational)
Create an RFP for an ERP (2 months, foundational)

The above seven items are primarily foundational Epics that should be completed prior to even selecting an ERP system. The above discrete pieces of work can easily be estimated and funded, and a good Project Manager could look at each of these items, understand what needs to be accomplished, and ensure execution of those items within set timeframes. Using the above perfect-world estimates, this work would take about 12 months holistically and are the appropriate first steps organizationally and technically. It would be easy for a Resource Manager to estimate the amount of work necessary for any of these items.

Conversely, many organizations leaders think “Well, our IT department already knows all this” or “our data won’t take that long to prepare” or even “we’ll figure out the requirements during the RFP process” but this is flawed thinking. Many times, I’ve been the recipient of project and program budgets based on SWAG estimates that are underpinned by the shaky foundation of a list of unknown assumptions and risks (which never appear in the business case slides or excel workbooks).

At that point, the business case has been approved by the board, the funding is ready to go, and project and program managers are brought on board to lead these huge efforts. But as the work gets going, problems begin to arise almost immediately.

If you’ve ever heard the expression “We’re changing the tires on a car moving 60 mph” you know exactly what I mean.

The front line becomes over-worked and exhausted from trying to get the foundational work done while also doing the operational and strategic work.
Leadership becomes frustrated with the lack of progress across multiple initiatives and pushes harder for results.
RAID (Risk Assumption Issue and Decision) logs begin to bear disturbing fruit.
The level of complexity on all programs and projects increases drastically, leading to a lack of understanding around goals and vision at an organizational level.
Project Managers spend more time trying to pull together those Silo’d leaders to educate them on the foundational issues instead of focusing on the work.
Competing priorities overlap, timelines extend, and budget and resource management becomes extremely difficult.

If the organization would only plan differently these issues wouldn’t be so prevalent in the project world today. If organizations were to follow a more Agile planning process:

Work would be prioritized based on customer needs and wants.
Barries to achieving those needs and wants would be documented and understood cross-functionally.
Strategic goals are broken down into Epics that can be discretely funded, managed, and completed on time and on budget.
The PMO focuses on managing the existing capacity against the organizational backlog to ensure value is consistently delivered in the most cost-effective way.

Annual Planning in an Agile World: Focus on Value Streams

Tue, 02 Apr 2024 13:13:18 GMT

Annual Planning in an Agile World

Post 2: Focus on the Value Stream

In last week’s post (read here: https://creativeopsgroup.com/annual-planning-in-an-agile-world-the-problem-at-hand ) I talked about three key issues I see with annual planning in an agile world. The first: Disjointed prioritization not tied to a Value Stream is the focus of this week’s post.

A “Value Stream” is really a fancy term for an end-to-end process, and it’s crucial to understand the Value Stream when you are thinking about Agile (and financial planning for projects). As with any end-to-end process, it’s cross functional in nature. Take for instance, the Procure to Pay Value Stream. In most instances, this process in a manufacturing world involves the following teams:

Engineering
Procurement
Manufacturing
Scheduling/Forecasting/Planning
Receiving/Shipping
Inventory Control/Quality Assurance
Accounts Payable
Finance
Customers
Suppliers

This process can often also tangentially involve other teams as well.

During annual planning, each of these teams/groups may have individual priorities that they would like to see addressed. But if they are looking at these priorities from a silo’d perspective, and not including both technical and organizational impacts, they may not understand that accomplishing their priority may not be possible without certain predecessors having been met.

If an organization follows the structured, iterative process laid out below, it will ensure planning, funding, and milestone achievement is aligned cross-functionally.

1. Understand the needs of your customers

In many process-improvement methodologies there is the concept of “Voice of the Customer” or VOC. It’s critical to know what is important to your customers. And customer means more than just the end customer; it includes internal customers (other departments), suppliers, employees, external stakeholders. Does your organization ask customers:

What they must have versus what would be nice to have?
When/how is it painful to do business with us?
Is there something, that if done differently, would be game changing?

VOC should provide the high-level, overall prioritization for upcoming efforts. Note that any time VOC is gathered, it should be shared with employees so they understand the *why* of the efforts that will be undertaken.

It’s important to take a formal approach to this process, and it involves more than a survey focusing on NPS. Leveraging your Sales team for informal feedback, customer/ supplier/ employee focus groups, and the results of step #2 (understanding your business processes), can help drive valuable insights into how your organization is exceeding, or potentially not even meeting, the Voice of the Customer.

2. Understand Business Process

What does your organization do, but more importantly, how does it do it? Doing this step right takes time, effort, and money all on its own, so start it early, do it often, and engage people who know how to facilitate these sessions. This step can/should be done concurrently with step #1, and it can often be driven by a process improvement team. The questions to ask as you gear up for this effort:

What is the current state of your business processes – are they documented?
Where are the manual work-arounds, multiple hand-offs, or too many cooks in the kitchen?
Is there a consistent understanding and definition of key organizational metrics?
Is there a wide fluctuation of process-based outcomes?
Do your current processes help you or hurt you when it comes to meeting the VOC?

Note that the people who do the jobs should be led through the exercise of documenting what is actually happening. Do not rely on training materials or Standard Operating Procedures. That will not help you uncover your true root cause issues.

Once your end-to-end processes are documented and understood by all stakeholders in the organization (including and most importantly the Functional and Technical Leaders who are responsible for ideating projects), it’s time to look at the root causes that are keeping you from achieving the needs of your customers. These root causes should be foundational in the overall planning process.

Once root causes are identified, use creative brainstorming to identify solutions to these problems. Engage your employees to help identify solutions and note that not all solutions are technical in nature. Changing a business processes or re-aligning departments to encourage more end-to-end ownership can be great solutions to issues and not require IT investment dollars. Once a set of achievable solutions are identified, it’s time to conduct planning!

3. Plan by Value Stream

Planning is a multi-step process, and should be undertaken at least quarterly, to assess prioritization and progress on an ongoing basis. If the organization is only planning for project work on an annual basis from a silo’d perspective, there is too much room for ballooning expenses, scope creep, and continuing of efforts where the juice just isn’t worth the squeeze. Six months into a project, when you have already invested millions of dollars, feels too late to change course. At that point the front-line employees start to hear the corporate mandates to work harder, meet unrealistic deadlines, and “do what it takes.” Of course, all of this is compounded by the competing priorities and other projects that often tie up the same resources. Especially if missing functional or technical dependencies are uncovered.

Conversely, leveraging VOC and root cause analysis from business process to create a backlog of Organizational Epics allows the PMO to pivot and flex as needed. These Epics represent a set of requirements tied to a strategic objective (we’ll cover funding these Epics next week). They also provide structure and hierarchy for work that will be accomplished and allows for an organization to fully complete discrete efforts, enabling a culture of success.

As you are tying these Epics to strategic objectives, ensure these Epics are also clearly tied to a specific Value Stream. An organization can and should plan across value streams, but no organization has the capability or capacity to execute every priority for every value stream at the same time!

If Procure to Pay is your highest priority value stream, then it makes the most sense to prioritize the foundational and operational Epics for Procure to Pay.
If Quote to Order is your highest priority value stream, then why would you prioritize a new Supplier portal project?
Are there items (like infrastructure) that are foundational to all value streams? If so, then these need to be prioritized above strategic value stream objectives.

Epics should be reviewed (progress, completion, velocity) every quarter, and the work should be funded accordingly. That way, if a regulatory requirement is communicated, this work can easily be prioritized above the next set of Epics, resources can be re-prioritized, and smaller Epics can be moved up in priority to allow for full and continuous resource utilization.

When planning by Value Stream, the customers of that Value Stream are clear, their needs and wants are understood from VOC, and the organization knows where and how they are or are not delighting customers. The planning process becomes tied to the efficacy of a business process and the ability of that process to be enabled by the appropriate technology.

This planning process should be a formal process, undertaken at the same time each quarter, and should involve discussion, debate, and alignment. Think of it as Program Increment (PI) planning at an organizational level, as opposed to PI Planning at a project or program level. Each quarter the next set of objectives are undertaken based on teams’ ability to deliver on those objectives, dependencies that change the backlog priority, and overall funding for that Value Stream. Meanwhile, the work is completed in discrete phases of work that are either directly providing value or are setting the stage for value to come.

Annual Planning in an Agile World: The Problem at Hand

Wed, 27 Mar 2024 15:13:35 GMT

Annual Planning, The Problem at Hand

Working in program and project management, I am often the recipient of projects or programs that have been approved through the annual business planning cycle. Of course, the desire of the organization’s leadership is that the project be executed quickly, achieving a significant ROI. Most of the time, these projects have been ideated, board-approved, and funded not in accordance with Agile principles, but discreetly, in functional silos, according to what that a specific department, business unit, or stakeholder wants to accomplish in a given fiscal year.

Many companies believe that taking an “agile” approach to a project, while maintaining a very “waterfall” approach to annual planning, ROI, and funding, will still provide quick financial results. Instead, what I see on the front lines is:

1. Disjointed prioritization not tied to a Value Stream leading to:

Unmanageable dependencies across projects and programs
A lack of understanding of the end goals and objectives

2. Annual budget cycles not tied to Epic-based delivery causing:

Scope creep and change requests
Pressure to deliver, even if delivery on a current project is no longer warranted

3. A lack of simple, process-based metrics highlighting

Divergence between project goals and organizational goals
An inability to adequately measure the impact of a project or program

If the organization truly wants to move to an iterative approach, this must be done holistically, starting with the needs and wants of the customers, a deep understanding of business process, and the ability to measure outputs easily and consistently.

Over the course of the next few weeks, I’ll be publishing a series of posts that discuss the issues above and thoughts on how to move annual planning to a more iterative approach in order to better meet an organization's objectives.

Hello Gorgeous!

amkelly30@gmail.com (Anne Kelly) — Sat, 20 Aug 2022 01:08:26 GMT

Welcome to my "blog life"

I really never thought I'd be publishing my first blog on the website of the company I own, which sells the products and services I love and am passionate about. It's crazy what being in your 40's will do to a woman! So let's talk about words and what they mean. Everyone knows that "the pen is mightier than the sword" and "sticks and stones may break my bones but words..." and probably a hundred other phrases. Sometimes I think that musings might be of interest or value to someone else. So this is where I'm going to talk about them. I hope you find them useful, or at least interesting. And if you don't, then I hope you don't comment :-)

I picked "Hello Gorgeous" because right now, life feels gorgeous. I'm in the honeymoon phase of a lot of things:

I just launched my own company!!!
I seem to be successfully launching my own company, with paying clients on the design and management consulting sides of the house (a challenge is a challenge and a project is a project after all)
I live in a world full of food and wine and art and puppies and creativity and intelligence and friendship and love...and that means I am truly blessed

I feel like a lot of people have probably started a blog or a career with a lot less, so I'm just going to hold on to my happy with both arms and lots of gratitude and see where it takes me!