Budgeting for agile product development

Abstract

Recent reports and predictions indicate a consistent and continuous growth in the field of Research and Development. Such growth leads to increased resource investments, which have to be managed effectively to eventually achieve value maximization. This management is cohesive with budgeting. In changing environments, said effectiveness can be difficult to attain. Agile development is supposed to provide the necessary flexibility for uncertain situations and has recently seen a stark adoption incline. Unfortunately, budgeting and resource allocation have not yet been resolved for agile approaches: a comprehensive research including recent publications showed a lack of models and frameworks for the adoption and application of budgeting with agile development. Due to this lack of a comprehensive approach, as well as limitations and restrictions of existing research, this paper describes the design of a budgeting approach suitable for and compatible with agile product development. The developed solution, the Structured Agile Budgeting Process, provides a holistic and interdisciplinary way to allocate resources while still allowing the flexibility and benefits of agile development.