Transitioning to Value Stream Funding Competency
Business Problem
Our traditional approach to funding prevents us from being responsive to opportunities.
Business Outcomes
- Reduced overhead by eliminating project cost accounting.
- Dynamic budget reallocation due to market changes.
- Improved alignment between budgets and strategy.
- Financial diligence through lean guardrails.
Why is the Transitioning to Value Stream Funding Competency important?
Traditional budgeting (funding projects) conflicts directly with Agile ways of working. Fixed annual budgets tied to project requirements prevent the ability to pivot as priorities change, limiting organizational agility. This traditional approach also requires detailed upfront estimates, which create a false sense of certainty and incentivize 'use it or lose it' spending. Additionally, it treats people as resources, leading to low morale and short-lived project teams, which is a mismatch with a continuous value flow model.
Lean portfolios alter this approach by directly funding value streams rather than temporary projects. Value stream funding shifts the conversation from requesting a specific monetary amount (project budget) to funding a fixed capacity (headcount plus infrastructure and tools).
The practices covered in this competency are designed to help an organization transition towards this new approach. One that supports, rather than hinders, modern, Agile, iterative execution. It allows the organization to prioritize based on economics, ensuring that investment flows to the most valuable opportunities while still maintaining responsible and rigorous financial stewardship.
Which roles would benefit from mastering this competency?
This competency is intended primarily for the Portfolio Leadership, Finance leaders, the VMO, and the LACE. It will also be useful for traditional project management roles, Business Owners, Epic Owners, Enterprise Architects, and Solution and Product Managers.