Agile software development and traditional cost accounting don’t match.

—Rami Sirkia and Maarit Laanti [1]

Lean Budgets

Definition: Lean Budgets is a financial governance approach that funds value streams instead of projects, accelerating value delivery and reducing the overhead and costs associated with traditional project cost accounting.

When implementing Scaled Agile, many organizations quickly realize that the drive for Business Agility through Lean-Agile development conflicts with traditional budgeting and project cost accounting methods. As a result, moving to Lean-Agile development—and realizing the potential business benefits—is compromised, or worse, blocked entirely. To address this problem, SAFe introduces Lean Budgets as its approach to financial governance.

Details

Each SAFe portfolio operates within an approved budget, a fundamental principle of financial governance for developing and deploying Business Solutions. Figure 1 illustrates a typical Enterprise strategic planning process that creates each portfolio’s budget in SAFe.