Agile is the most effective way to manage product development and complex software by using incremental and iterative practices. Every company wants to know the financial benefits of agile before implementing the agile practices into their development process. ROI can be used as a planning tool to evaluate whether to include features in a release or projects in a portfolio. ROI plays an important role in agile project because it has the potential to create income from the first release of product and make profit margins with every successive release. By measuring ROI, companies can analyze the ongoing value of an agile project. Agile methodology is based on ROI potential and it helps organizations to track the individual project and performance of the organization. Let’s discuss how agile can enhance the ROI of the company.

How Agile can increase the ROI of the company?

·         Agile methodology creates deliverables on the basis of priority. In this methodology, companies put the high value requirements on the top of prioritized product backlog.

·         Agile methodology has more predictable release cycle with built-in testing process that leads to product stability.

·         Agile development process reduces the overall risk associated with the software development process.

·         The overhead cost of agile development is very low in terms of process and management.

·         Fast moving developments can be quickly coded and tested using this methodology so that mistakes can be easily corrected.

How to measure ROI for Agile projects?

·         The initial high requirements for the project are collected and then they are placed in the product backlog.

·         Then team is gathered to estimate the size of individual requirements at high level.

·         After this the overall size of the product backlog is examined

·         Then the initial velocity of the project is determined by estimating the number of points your team completes in a sprint

·         Using initial velocity the number and cost of sprints that is required in the project is estimated.

·         Companies then find various incomes or saving metrics such as the actual fiscal value of all, or subsets of product backlog, cost of delay if the product is not delivered on time.

·         After that company uses estimated income, cost figures, time and savings to calculate ROI.

Conclusion

Though it is impossible to predict the result and outcomes of the project but companies can deliver successful deliverables after each sprint using agile methodology. ROI is an important metric for any software organizations. There are many companies that can give their expert advice on all your Agile and investment-related queries. So choose the best company who can help you with Agile ROI Measurement.

Summary

This article includes information on Agile ROI Measurement. Read more to find out to measure ROI for agile projects.