Integrating Scaled Agile with Integrated Business Planning

The modern version of Agile methodology was officially launched in the early 2000s with the publication of the Agile Manifesto. The intent of the manifesto was to provide guiding principles for technologists to address the shortcomings of the traditional waterfall project management model. It advocates for an incremental software delivery approach that emphasizes collaboration, adaptability, and speed - ensuring the rapid delivery of working solutions that create real value for the customer. Since then, an increasing number of organizations have adopted Agile practices to reduce innovation cycle times and break down organizational silos. This is achieved with cross-functional Agile standing teams working in “sprints”, typically lasting one-to-four weeks, to deliver change.

Agile and IBP
The history of Agile is deeply rooted in practices that were developed in manufacturing environments, such as Toyota Production Systems, which organized business activities around delivering value to the customer. Oliver Wight also embraces Lean and Agile practices in supply chains to create competitive advantage by optimizing the delivery of demand plan requirements. The use of Lean and Agile practices is also a requirement to achieve Class A in Integrated Business Planning, which further emphasizes their importance in running an effective IBP organization.

Scaled Agile (SAFe)
More recently, Agile operations have been codified into larger frameworks such as Scaled Agile (SAFe). The aim of SAFe is to provide a framework for organizations to deliver strategy through adopting Agile practices across the enterprise. Upon initial inspection, one may view SAFe to be incongruent with processes such as Integrated Business Planning (IBP), due to IBP’s monthly cadence, defined roles and formal sign-off on plans. This is far from the reality, as both IBP and Scaled Agile share a common goal - helping organizations achieve their strategic objectives through agility.

Using a dual operating approach
Scaled Agile acknowledges that it can’t operate on its own and outlines the need for organizations to run a dual operating system. The dual operating system is composed of operational value streams (traditional hierarchy) and development value streams (agile network) that need to work together to deliver strategy.

IBP is the mechanism by which leadership can understand the sufficiency of plans (including those of the development streams) in delivering the organization’s strategic goals. To reap the benefits of the Agile approach, organizations need to ensure the development streams can easily integrate plans into the IBP process. The Portfolio Management Review (PMR) is responsible for ensuring that the organization’s portfolio adapts to the changing environment and that those changes will be sufficient to support future growth. This makes it the prime integration point for Agile development streams (see figure). Changes fed through the PMR can then be reconciled with operational activities through the Integrated Reconciliation (IR) and fed back to the teams to course correct if required. This connectivity gives the executive team the confidence that they are supporting Agile development with the right level of funding, resource capacity and organizational capability.

Leveraging Scaled Agile
To ensure an organization effectively leverages Scaled Agile in an IBP environment the executive team must ensure:

• The IBP Leader has created integration points for the development value streams
• The IBP cadence and development cadence are in sync
• Development value streams are inducted into the IBP process
• IBP stakeholders are educated in the Scaled Agile process
• Integrated reconciliation is used to feed in misalignment in the dual operating system for resolution

In summary, if well managed, organizations can leverage the benefits of IBP and Scaled Agile to attain and sustain competitive advantage in the digital age. If your organization is seeking to improve the connectivity of IBP with Agile you can contact us or email me directly.

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