Budgeting is an essential part of any successful business. It’s not just about making sure that you earn more than you spend. It also involves forecasting so you know when you need to cut back on expenses and when you need additional funding to enable growth.
The one big problem with budgeting is that it can be quite rigid and doesn’t always allow for meeting the realities of current situations. This is when Agile funding should be considered. It makes things more flexible since it allows businesses to respond to changes as they happen. In this article, we will go over what using Agile funding means for your business.
Business value
The companies that are successful these days are the ones that are able to respond quickly to changes in the market or business environment. Those that are not able to adopt are usually left behind as the competition is able to absorb more of the market share.
Since most budgets can be restrictive and rigid, it prevents companies from adapting quickly to changes. Agile funding is the perfect antidote since it embraces evolving with current realities and prevents disruptions.
Value streams are necessary to create customer and business value. Agile funding is what provides the value to keep this process rolling. A Scaled Agile Framework (SAFe) is used to make sure that funding is aligned with the company objectives while also making sure that it is adaptable. It provides a cohesive strategy that works across many different parameters.
The reason this system works so well is that it is able to fund all work regardless of how the work is delivered. This puts the focus on the value the customer receives and also the value of the business itself.
Budgets should be able to be adjusted and funding gets distributed differently according to the changes. There could be new threats identified when doing a SWOT analysis and investments will require a different focus as a result.
Planning and allocation
Allocating resources where they have the biggest impact is essential to be able to respond to new threats or adapt to a changing market. A flexible budget is going to make it easier to identify where those resources should be reallocated. The Agile funding process is going to help respond to those needs since it shifts a lot of the planning to the value side of the ledger.
An example of how it provides value is that it can give insight into how large of an investment can be made to achieve a goal and still provide a healthy ROI to make it worth it. Another dimension to that example is whether the objective can be met with the current allocated investment or not.
Since planning has administration costs associated with it, Agile funding can help by lowering those costs since the planning phase is more efficient and effective. More resources go toward achieving value than they do for processing changes.
