Michael James and I recently did a talk at government IT conference on Agile software development. The overall reception was strong, but a few keen members of the audience pointed out a particularly difficult barrier for widespread government adoption of Agile: governments often have very long budget cycles (e.g., two years in Washington state).
Agile effectively deals with confines (scope, budget, and deadlines), but does not seem to address the question of forecasting budgets/resources, especially when they must be forecasted far in advance. For example, how does a government agency forecast its resource needs two years in advance, when very little is known about the projects on the horizon? Agile is effect in delivering high value once budget and resource constraints have been made, but it does not seem to address arriving at the budget itself.
Is there an Agile solution to budget forecasting and planning perciptated by government budget cycle regulations? Should Agile even broach this problem at all?
At the most recent Scrum Gathering in Boston, a similar question was posed to a group working with Mary Poppendieck about budget forecasting in the private sector. Mary’s solution was a “venture capital model”; the project sponsors request a small amount of money (seed capital) to prototype a solution and gain domain experience. Once the “seed team” had sufficient experience with the technology and domain they could better estimate the budgetary needs of the entire project as well as the likelihood for success. This solution sounds feasible in the private sector, but is this realistic for government agencies considering the length of the budgetary cycle and the quantity of projects? That is, can an agency be expected to prototype two years worth of projects prior to submitting a budget? Agile should have a better answer to this difficult problem. Any Agile-ish solution will most likely be empirical, but two years is a very long time.
These questions I ponder nowadays.
(PS: It’s been about two weeks since my last post, apologies to the faithful!)