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Agile Project Management: What Is It and Why Does It Matter?

November 9, 2020

From the building of ancient pyramids and industrialization of the 19th century to modern-day developments such as the Gantt chart and Critical Path, project management has always existed in some form.
This article originated from the Xero blog. The XU Hub is an independent news and media platform - for Xero users, by Xero users. Any content, imagery and associated links below are directly from Xero and not produced by the XU Hub.
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Today, project management has evolved one step further – with improved processes and technology providing more flexibility, more accountability and ultimately, more successful outcomes.

A multitude of management models

There are several approaches to project management, but these can be broadly divided into two categories.

  1. Traditional project management models tend to follow a more linear step-by-step pattern: define the objective > develop a plan to reach the objective > execute the plan > evaluate success at the end.
  2. In contrast, agile project management models tend to be more circular in their execution: define the objective > break the project down into small tasks > complete a task > receive feedback and evaluate progress > adapt and adjust course toward the objective > move onto the next task.

Traditional versus agile management

Traditional systems, which follow a more rigid, longer-term plan, are characterized by prioritizing processes and tools, defining set roles for team members, and having a slower feedback loop. They include models such as:

  • Waterfall: define requirements > design the workflow system > implement the workflow and build > test each element of the product or service > deliver the product or deploy the service > provide ongoing maintenance.
  • PRINCE2 (Projects in Controlled Environments – mark 2): present an outline to a board who determine viability > identify scope and risk, and create a plan > obtain authorization and direction from the board > delegate work and monitor progress > deliver the product or deploy the service > review performance > evaluate success and hand off.

Conversely, agile systems, which have gained momentum over recent decades, involve rapid and iterative responses to change and are characterized by prioritizing individuals and interactions, enabling team collaboration, and having a faster feedback loop. Agile models include:

  • Scrum: define requirements (as part of Sprint planning) > update to-do list to prioritize team tasks > plan a “Sprint” of work > perform Sprint with daily meetings to discuss and review objectives > carry out Sprint review, for client feedback > carry out Sprint retrospective, for team review.
  • Kanban: visualize workflow using a Kanban Board (showing to-do, in-progress, and completed tasks) > limit in-progress tasks > manage workflow and adjust > clarify processes for the team > add feedback loops for swift course correction > collaborate and experiment for continuous improvement.
  • Lean: define value for customer > map the value stream > remove waste (anything which does not add value, hinders workflow, or is unnecessary or harmful management) > respond to customer demand for just-in-time delivery > continuously improve.

Advantages of agile approach

Originally emerging from the field of software development in the 1990s, agile principles are now considered more effective by business leaders than traditional methodologies when it comes to project management. In fact, in the latest State of Agile report, 95% of companies have adopted agile approaches in some way, reporting improvements across a myriad of success metrics.

Improved project outcomes

Collaborative freedom afforded by agile approaches allows team members to experiment with the process and promotes a ‘bottom-up’ rather than ‘top-down’ management of the project. Coupled with overall transparency not found in traditional methods, these characteristics help steer the project toward a better result.

Teams who adopted agile processes reported a 45% increase in quality of outcomes following the transformation.

Scope for feedback leads to higher customer satisfaction

Seeking regular feedback makes customers feel heard, while involving them throughout the process also keeps them engaged and gives them confidence in your team’s ability. With agile approaches allowing for feedback at every stage of the project, customers are far more likely to be satisfied with the end result.

Project managers reported a 58% increase in customer satisfaction following the transition to agile.

Greater flexibility and efficiency

Since only small chunks of a project – i.e. individual tasks – are addressed at a time, agile project management enables timely responses to any changes which might arise.

Whereas with traditional methodologies, ill-fated ideas can remain in progress for a long time, wasting significant investment, agile project management saves both time and money. Project managers can quickly determine which approaches aren’t going to work, thus minimizing unnecessary investments.

Project management teams reported a 48% increase in on-time delivery after adopting agile processes, and individual projects seeing a 31% improvement in budget versus actual cost.

Increased ownership leads to higher morale

As agile teams are predominantly self-managing, team members have more ownership – and therefore accountability – over the project and more freedom in the way they work. Faster feedback during a project also helps to maintain motivation and allay anxieties about the final result.

Teams reported a 37% improvement in morale after adopting agile project management.

Agile – the new norm for project management

While traditional (and therefore often monolithic) project management approaches do have some benefits, they tend to be better suited to shorter projects, in which variables are limited.

However, for projects that comprise multiple interconnected phases, with changing requirements, timelines, and costs, agile project management has become the preferred choice for most business leaders today.

If you’re considering going ‘agile’, ask yourself the following questions:

  • Are your projects complex?
  • Do they require more adaptability?
  • Do they require faster feedback and more nimble changes?

If the answer to any of these questions is yes, your project will likely benefit from agile project management.

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