What Your CFO Wants You to Know

Software executives often find it difficult to put themselves in the same mindset as their business and finance co-workers.  Effective communication happens when the participants share a common frame of reference.

To the extent IT leaders and workers can discuss their work and its value in terms familiar to operations and finance executives they can transform skeptics into believers and resistance into advocacy.

What CFOs Want

CFOs' top macroeconomic concerns:1. Weak consumer demand2. The federal government's agenda3. Intense price competition4. Credit markets/interest rates

CFOs' top internal concerns at their own companies:1. Maintaining profit margins2. Cost of healthcare3. Difficulty forecasting results4. Attracting and retaining qualified employees

http://www.computerworld.com/s/article/353408/What_CFOs_Want_From_IT?taxonomyId=14&pageNumber=1ComputerWorld, January 24, 2011

What CFOs Want from IT

• Say Goodbye to Bells And Whistles• Play with The Toys You Already Have• CFOs Like Cloud Computing• Know What The Business Needs Now• Show Me An ROI I Can Trust• Emphasize Short-term Benefits . . . • . . . But Don’t Abandon Long-term Investments

http://www.computerworld.com/s/article/353408/What_CFOs_Want_From_IT?taxonomyId=14&pageNumber=1ComputerWorld, January 24, 2011

Plan, Budget, and Measure

In the capital budgeting process, a company compares the rates of return of different projects and selects which projects to pursue in order to generate maximum wealth for the company's stockholders. Companies do so by considering and comparing each project’s:

• Average rate of return• Payback period• Net present value (NPV)• Profitability index (PI)• Internal rate of return (IRR)

Quantify Benefits

You Will Get Pushback on Forecasts

Questions the CFO will ask:1. How much is this going to cost? No, really, how much?2. When will we begin to see revenue/savings from this?3. How confident are you in what you’re telling me?4. What risks have you considered? Realistically, how likely is

it that this will cost more, take longer, not deliver the revenue/savings you’re forecasting?

Software Development And The Time Value of

Money

http://www.rallydev.com/agileblog/2009/02/how-does-agile-deliver-time-to-market-savings-of-50/

Software by Numbers – Low-Risk, High-Return Development by Mark Denne and Jane Cleland-Huang

Software Development And The Time Value of

Money

http://www.netobjectives.com/files/BusinessCaseForAgility.pdf

Successful application development project

http://www.netobjectives.com/files/BusinessCaseForAgility.pdf

Comparing profit and breakeven points for release strategies

Agile software development is designed to deliver value-added working software early and often

Agile Delivers Value Early And Often

Agile Delivers Value Early And Often

http://www.ibm.com/developerworks/rational/library/jul07/kroll_ambler/index.html

Agile Delivers Value Early And Often

Agile Delivers Value Early And Often

http://www.rallydev.com/agileblog/2009/02/how-does-agile-deliver-time-to-market-savings-of-50/

Agile Manifesto

Agile Principles

Our highest priority is to satisfy the customer through early and continuous delivery of valuable software

Welcome changing requirements, even late in development. Agile processes harness change for the customer’s competitive advantage.

Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.

Business people and developers must work together daily throughout the project. Build projects around motivated individuals. Give them the environment and support

they need, and trust them to get the job done. The most efficient and effective method of conveying information to and within a

development team is face-to-face conversation. Working software is the primary measure of progress. Agile processes promote sustainable development. The sponsors, developers, and user

should be able to maintain a constant pace indefinitely. Continuous attention to technical excellence and good design enhances agility. Simplicity—the are of maximizing the amount of work not done—is essential. The best architectures, requirements, and designs emerge from self-organizing teams. At regular intervals, the team reflects on how to become more effective, then tunes and

adjusts its behavior accordingly.

Agile Software Development Performance Measures

• Features delivered to production add quantifiable business value.

• Work on features that provide highest business value soonest.

• Deliver value in each sprint timeline.• Involve customers in key decisions about features in the

sprint.• Team members work at a pace and level of effort that is

sustainable over the long term.• Team members are accountable for their time, the quality of

their code, and their contribution to the team’s success.• Testing coverage expands with each production release.