Process flows
Processes and Reports
The value stream funding capability allows organizations to set financial targets for value streams in the form of benefits and revenue. A baseline is captured to monitor variance between the targets and the actual benefits and revenue the value stream generates. Financial targets support investment decision-making by providing the context against which planned and current agile work can be analyzed and prioritized, enabling you to assess your organization’s ability to take on new investments.
Video: Value Stream Funding Demo
Financial Targets Process Steps
Financial targets process flow
| Process Step | Description |
|---|---|
| Define labor costs |
Enter the cost targets for labor into the value stream budget. Budgets may be created at any level of the Work or Strategy structure on the Financial Planning Detail screen then spread down to lower levels or rolled up to higher levels. Alternatively, data may be loaded using a financial load then rolled up and edited. For more information: |
| Define non-labor costs |
Enter the non-labor costs into the financial plan. These costs should be divided into the appropriate non-labor categories. Non-labor data is often entered manually, then spread down to lower levels or rolled up to higher levels as part of the larger budgeting process. |
| Define expected benefits and revenue | Enter the revenue targets and benefits for launching the value stream. These targets and benefits can be manually entered into the financial plan. |
| Baseline financial plan |
Following the input or roll-up of financial planning budgeting and target data, a financial baseline should be taken to compare and track variances of the value stream financials across time. |
Best Practices
Create Guardrails for Spending
Once you align your budget with your outcomes, create guardrails that define spending policies, guidelines, capacity, and practices across the portfolio. This ensures that the right investments are made within each budget while giving teams the freedom to weigh new opportunities against long-term strategies.
Allocate Funding Strategically
Organizations must ensure the right investments are made within each budget. They must set politics aside, review business cases objectively, ascertain their potential business impact, and fund the top value streams incrementally to reduce financial risk.
Reassess Budgets Often
Reassess your budget regularly to analyze investments across value streams and reallocate funds to new initiatives. Continuously monitoring your portfolio enables you to pivot toward new opportunities or away from unsatisfactory projects with greater flexibility and ease.
Budget Collaboratively
Create a better-informed and effective system for distributing investments by involving stakeholders and business owners in the budgeting process. Participatory budgeting encourages leaders to share resources to achieve results within their initiative.
Use Scenario Planning
Scenario planning helps to forecast the cost and benefits of a given selection of product investments. Create and assess various scenarios of different product mixes to ensure the products you choose to invest in can achieve your organization’s strategic goals. For more information, see Prioritization and Scenario Analysis.