The Agile Advantage: Boosting Efficiency & ROI
Rob Sanchez
The Agile approach puts flexibility, collaboration and customer satisfaction front and center. It’s an iterative process that allows teams to adapt to changing requirements, marketplace pressures and internal/external stakeholder needs. Instead of planning out the entire product, Agile has teams incrementally delivering value by building small pieces of a larger project. These incremental pieces can each be planned and take advantage of all the knowledge the team has at their disposal. This can be hard to accept for some organizations as it means the first few iterations aren’t perfect, but the process begins to create and enhance efficiency and responsiveness that ultimately ties back to return on investment. The more Agile your team is, the faster it will see return on investment (ROI); there’s no other way to put it.
Efficiency and ROI are critical for success and sustainability at every level of business in any industry and context. Efficiency involves spending resources (time and money) wisely with lean processes and waste reduction. An efficient process is a productive and potentially profitable one. ROI is the key to showing that investments are successful and that the steps taken to create efficiency are working on a team. The two feed into one another - focusing on efficiency tends to increase ROI and focusing on ROI encourages cost-effective (efficient) solutions and processes. Both efficiency and ROI sharpen the competitive edge for product teams and organizations as a whole.
Seven Keys to Understanding Agile:
1) Iterative Development: Agile teams build small manageable pieces of a larger project. This allows the team to learn from building each piece and roll that knowledge forward into planning the next while getting internal/external stakeholder feedback.
2) Collaboration and Communication: At the heart of Agile is a cross-functional team of folks getting the work done together. The iterative process from the first point requires a steady cadence of collaboration and communication from all departments and teams involved in an Agile project.
3) Customer Feedback: With incremental value delivery, it’s possible to get continuous customer feedback. Agile thrives with feedback and thoughts of customers, but those customers can also be other departments and leadership. Incremental feedback promotes strategic alignment across teams and keeps everyone up to speed to avoid any pesky status update meetings.
4) Adaptability: If it’s not overstated already, Agile is straight-up adaptable. It can seem obvious on one level, but on another, you’d be surprised how easy it is for SaaS companies to forget about this and spend extra time planning every last detail only for the plan to fall by the wayside with new market knowledge and customer pressures. Plan a bit, then build a bit.
5) Prioritization and Focus: With many different ideas on prioritization for businesses and products, Agile cuts to the chase and puts the customer needs first. Each Agile team works to deliver the work that will create the highest value first. This is where having a good Product Manager comes in too.
6) Cross-Functional Teams: The teams that run Agile include all the members and departments that are responsible. For example, a typical Agile team will include one or more representatives from product, one or more from design and various development specializations like front-end, back-end, architecture and who could forget the all-important QA member. These teams meet regularly and communicate often bringing diverse perspectives and experiences to bear in creating the best product possible.
7) Transparency: The increased focus on communication to build efficiency and ROI leads to a transparent process with information radiators that display a clear view of value delivery and metrics on the team. This again helps with strategic alignment but more importantly, reinforces efficiency and ROI by making it easier to spot problems and improve processes.
The Efficiency and ROI Connection:
We’ve discussed incremental development, customer feedback and team metrics so far, but ROI is also something that can be measured incrementally and improved. Agile teams create and deliver value early and often to allow users and stakeholders to see the benefits of the service and/or profits faster. The flexibility and adaptability that Agile promotes allow ROI to be checked and balanced against known market conditions. This reduces the risk of investing in features or outcomes that may become obsolete before being realized.
There’s no way to get feedback, measure ROI or proceed with product development without involving the target users and market for the product. Delivering value faster means organizations can profit from opportunities and act in their chosen spaces when needed. This can free up companies or have the opposite effect and introduce chaos if there’s no internal north star or guiding vision being distilled throughout the teams. Don’t worry though as that comes along with agile and good product management.
Agile’s iterative approach also helps to mitigate risk and allows the team to find problems earlier in work. For example, finding out that the ground is unsteady before spending weeks planning the house to build on it. Teams can address the obstacles they find quickly to avoid setbacks and/or pivot the plan on the spot. There’s a certain advantage teams gain from exploring the unknown and planning incrementally.
ROI for most SaaS companies relies on much more than an initial purchase. It’s the recurring revenue that keeps the lights on and captures the interests of investors. Agile methods take in customer feedback and efficiently create value which leads to increased customer satisfaction and retention if handled correctly.
Every team is limited by their resource allocation whether it be the team itself, the hours in the week, the budget, the knowledge or interest. That’s why efficiency is the name of the game. Spending resources efficiently on creating outcomes that move the organization/product forward is the fine art of product management. Agile helps immensely with this by creating a set of standards for your teams and organizations to measure and improve themselves against when it comes to resource allocation.
The continuous improvement that accompanies Agile due to regular retrospectives with the team and constant feedback creates a better team, happier individuals and a better company culture all of which have huge roles to play when thinking about efficiency and ROI. An unhappy company will not be an efficient one (for long). Happier folks make better, more efficient decisions and products.
Conclusion:
For increased efficiency and a faster ROI, Agile is here to help. The simple iterative methods and meetings foster so many good things for your business outside of efficiency and improved ROI. It’s a clear winner when it comes to creating complex products like SaaS that require so many perspectives and moving pieces to be just right. In a landscape where every competitor is looking to get a leg up, process will determine the winners. An efficient business that can achieve ROI is a resilient one that can survive the ups and downs of a market and the changing chaos of customer needs. Implementing Agile in an organization or team is no small task, but check out our additional resources here and other great online lectures and content to learn more about Agile and changing the world of work.