In today’s world, finance plays a major role in enabling Agile teams to remain fiscally responsible while delivering application development projects.

  1. What is OPEX and CAPEX?
  • An Operating Expense (OPEX) is an expense required for the day-to-day functioning of a business. In contrast, a capital expense (CAPEX) is an expense that a business incurs to create a benefit in the future. OPEX and CAPEX are treated quite differently for accounting and tax purposes.
  1. How does CAPEX and OPEX work for Agile teams?
  • In the world of Agile, CapEx is about all the development and innovation activities that occurs during each sprint.
  • All the pre-planning activities including Product Owner, backlog management and maintenance is considered to be OpEx. So, a straightforward way to track and account these costs is to budget all Product Owner activities as OpEx and all Application Development activities as CapEx.

Outline/Structure of the Experience Report

Attendees will learn how to finance Agile projects with emphasis on OpEx and CapEx. Also, the notion of ROM will be discussed during this presentation.

Here are some examples of ROM calculation to support Agile projects:

One of the most challenging topics in Agile Finance is how to estimate the project during the Project Initiation phase. During the days of using Waterfall, ROM was a good technique to estimate high level cost of the project, but due to the nature of the Agile methodology, a high-level estimation requires different techniques.

  • ROM works for Agile projects in respect to OPEX and CAPEX, here is how it works:
  • Total number of story points for all the Epics
  • Determine average velocity of the team.
  • For a multi-team program, add all the velocities together
  • Calculate number of sprints for proposed scope = total points / total velocity
  • ROM Schedule = number of sprints x duration of sprint
  • ROM Budget = number of sprints x average labor cost of a single sprint
  • Contingency = average % of carry-over per sprint

Example: The proposed social media/workday integration has a ROM assessment of 1000 points

Learning Outcome

  1. Audiences will learn how to estimate Agile projects with emphasis on OpEx and CapEx.
  2. Also, during this presentation, they will earn how to create ROM at the beginning of fiscal year.
  3. The other learning objective of this presentation is, when they should use OpEx or CapEx during Agile development cycle.

Target Audience

This talk is mostly suitable for Project Manager, IT Finance Specialist and Product Owners

Prerequisites for Attendees

A basic understanding of project management, product owner, finance and Agile framework would be very helpful to follow the discussion.


schedule Submitted 1 year ago

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    Virtual Agile is reality these days!

    With respect to global pool of talents and access to different markets, working with remote Agile teams is very common these days.

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    I’ll share tips and techniques how to deal with those challenges, including key metrics to measure the success.