manage well

Second part of my article on exploring how Little’s Law related to the Agile Project Management just got printed in PM World Today. Here is the abstract:

Little’s Law[1] states that inventory in a process is the multiplication of throughput and the flow-time[2]. In first paper[3] of this two-part series, we took an every-day example to discuss Little’s Law at length. We also briefly looked at the implications of Little’s Law for manufacturing and for software development. In traditional manufacturing, there is a strong emphasis on plant capacity utilization as a core driver in cost management[4]. However, a high plant capacity utilization requires (or rather leads to) high inventory to ensure the production doesn’t slow down for want of raw materials. High inventory in turn leads to a low inventory turnover, signifying poor sales[5], thus having high economic implications. Inventory is also identified as one of the seven wastes in Lean[6].

Traditional software development has evolved from the days when requirements were fairly well crystallized, and the customer was willing to wait for the release while development teams went about developing the software and delivering only when everything was done. This often meant waiting for the working software for several months while development costs were accumulating. Today, thanks to a sleepless world of global competition, there is a business need to deliver software to the customer as early and as often as possible. Among other things, this also helps keep the development costs in check. This ‘development cost’ could be construed to as the ‘inventory’ in a software project, for it represents ‘work-in-progress’ just like the raw material represents locked-up capital in a manufacturing plant. However, there is neither a systematic concept nor consistent awareness of ‘inventory’ in software project management, and hence software development community has not benefited from the learnings from its more robust and more scientific cousin, the Lean Manufacturing. Agile software development has tried to solve similar set of problems from another perspective, at times even borrowing from the Lean concepts, but incidentally, there is a significant parallel between the two of them.

In this second part of this paper will explore in details how Little’s Law is not only conceptually akin to the Agile way of software development and project management, how well its mathematical principles could be used to understand and improve financial performance of a software project using Agile philosophy.

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