How much does agile transformation cost

Have you ever wondered how much agile transformation costs? Let’s take a look at what might appear on your receipt when you get started. The goal of today’s article is not to discourage you, nor to provide a detailed price budget. Rather, we want to give you information on what you may need to focus on. And also to let you know which areas to look out for in order to keep your budget for other parts of the agile transformation.

Some of these parts can be very expensive and can cause the whole transformation to cost you as several agile transformations together. You may not agree with all the points we make here. Every company is different and experience may vary. Then do not hesitate to share with us what experience you have, we will be happy for them.

Agile experts

Do you have an experienced agility coaches in your ranks? Excellently! It will come in handy. 😊 But what to do when you don’t have one yet? You have several options:

• Hire a senior agile coach as an employee to your company
• Temporarily order an external senior agile coach
• Hire a consulting company to help you get started

Although it proves to be financially advantageous to have your internal employees for agile transformation, you may also need the view of an external agile coach. Choosing the right senior coach is not easy, especially if you are new to agile. Sometimes you may also not be able to find a senior employee within a short time.

During agile transformation, you can, if you decide, really change your business from the ground up. And some changes may not be easy to make, or even just start talking about them from the position of an employee. For this reason, some companies temporarily hire experienced external agile coaches or consulting companies to help with the transformation. Internal positions should sooner or later be in the ascendancy. You can also have internal people trained by external agile experts, who will then hand over the work and leave your company. It’s good to know that the transfer of hard skills can be done relatively quickly, but working with people’s mindset and culture can take some time.

If you decide to get help from consultants, compare the price offers of several companies. The differences can be significant. And remember, every agile transformation needs the active support of the company’s management. And if not, investments in agile experts or consulting companies may be wasted

Scrum Masters and Product Owners

The roles of Scrum Masters and Product Owners can be recruited by your internal people who are already in your company. But you also need to be picky about who has the right mindset for this position. If you replace project management with an agile way of working in your company, the increase in the necessary capacities may decrease a bit. For Product Owners, it is often just a change of role in the company.

For an indicative calculation of how many Scrum Masters and Product Owners, you will need to know how many teams can coach a Scrum Master and how many teams can have a Product Owner. The following numbers have proven themselves to us:

• A more experienced Scrum Master can work with two teams at once. At the same time, each team has up to 10 people.
• Junior Scrum Masters are better to start with only one team
• The Product Owner usually has only 1 team (up to 10 people). One Product Owner can have more teams if they are all dealing with the same product.

E2E teams

It’s good to know that teams that start with agility can see their performance drop for the first 2-3 months of work. After that, performance returns as the team gets used to using a new approach to work. Sometimes you’ll need to hire an extra developer, but it shouldn’t be a huge number.

Myth: It’s sometimes rumored in the hallways that agile transformation will double the cost of developing in the company if we want to build end-to-end teams. End-to-end teams are teams in which there are representatives for each system that the team needs. This is a fairly well-known myth today. 😊

When creating agile teams, work with what skill set you will need in the team rather than with a list of specific people. Based on this, you will then come up with combinations of what the individual roles in the team should be able to do. For example, I need an analyst with an overlap into testing and not 2 people where everyone can only do something.

Part of the need for the number of team members will help you solve the fact that people in the team learn something new that is missing in the team.

It will be very helpful to organize your teams by products and not by systems. You can read more in our article Are your agile teams product or project teams? Teams will be more specialized and their need for the number of people will be less than for teams focused on the system.

Technical debt

In every company there is at least a little bit of technical debt, and if not, we did not look properly. 😊Technical debt is usually incurred when the team rushes with the delivery and sews the technical part of the delivery is not done well. The architecture and design of such a solution has various flaws, or documentation is missing, and this slows down and limits the work of teams in the future.

What has not been seen in the traditional way of working for many years suddenly begins to surface in agile teams. If you have to deliver a usable output within two weeks, these historical debts have nowhere to hide. And so it is necessary to count on the fact that with the transition to agility, you will have to gradually start handling technical debt.

Uncorrected technical debt would catch up with every company sooner or later. And so the question is whether these costs can be counted in the costs of agile transformation or not. Repairing technical debt can be very expensive, but these costs would catch up with you regardless of agile transformation. The advantage is that it can be repaired gradually, over a longer period of time.

Training

Count on the fact that you will need to train all your people in agile approaches. You will also need training for Scrum masters and product owners if you are going to educate them from scratch.

You can buy the training on the market, or you can use agile experts if you have them. Agile experts can also train your internal trainers over time. Not only for financial reasons, it pays off to learn to train basic agile approaches, training yourself and over time to order only expert courses. A number of courses can also be trained by your scrum masters and product owners.

Infrastructure and CI/CD

In many companies, it is necessary to address the testing environment in connection with the transition to an agile way of working. Agile teams need a testing environment available practically all the time for software testing. It then works in a similar mode as if it were a production environment. Sometimes you may also find that you don’t have enough of a testing environments. 

If you’re affected by these issues, your people probably knew it before, regardless of the way they worked. However, moving to an agile way of working can make this problem more visible, and delivering in sprints can become quite complicated with missing testing environments.

The agile transformation receipt can also show the cost of test and deployment automation (CI/CD). They help you accelerate delivery in sprints and keep your app tested in iterative and incremental development.

Therefore, it is good to keep an eye on this item in the agile transformations budget. Increasing the number of test environments or some technologies for CI/CD can be a significant item on the receipt of your agile transformation. Again, however, the question is whether you would not eventually come to the solution of these problems on your own without agile transformation.

Finally

I hope I have not discouraged you from agile transformations in today’s article. The aim was to draw attention to some areas that can be expensive and know about them in advance. Then you should not expect unpleasant surprises in the future in the form of a depleted budget. Do you have a different point of view? Did I miss something? Write to us in the comments, we will be glad for your experience!