Agile management

What it means

Agile management came out of software development as an answer to projects that were planned for years and suited nobody by the time they were delivered. Instead of one big plan the work is split into short stretches; after each one the team shows a finished piece and the client decides what comes next.

The best-known frameworks are Scrum, which works in regular sprints of fixed length, and Kanban, which manages a continuous flow of tasks and limits how much is in progress at once. Both rest on the same idea: priorities may change, but the scope of one cycle is fixed.

Agility does not mean chaos or the absence of a plan. The long-term direction is held by a roadmap, and the first usable version of the product, the MVP, is defined as early as possible so that feedback comes from real users rather than from meetings.

How it works in practice

An agile project is a challenge for contracts, because a classic contract for work assumes a precisely described deliverable and a fixed price. In agile development the client more often pays for the team’s time in individual sprints, and the contract describes the process, acceptance of results and the right to stop after any cycle.

For accounting, what matters is what is being created. When a company develops its own software, the cost of the sprints may be capitalised as an intangible asset if the result will be used for more than a year and exceeds the threshold in the accounting policy. Maintenance and minor tweaks go straight to expenses.

Agile principles also work outside IT, for example when rolling out a new ERP or taking over a client’s bookkeeping: in stages, with a check after each step. When clients move to us, we therefore take over the current month first and fill in the history in later cycles.

What to watch out for

Without a firm budget for the whole project, sprints can easily go on for ever. An agile project should therefore have a cost ceiling, regular checks against the budget and a clear criterion for when the product is good enough to launch.

Another risk is a client who has no time. The agile approach relies on someone at the company deciding priorities and accepting the results of each cycle. If that role is missing, the team sets its own priorities and the result gradually drifts away from what the business needs.