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Capitalization of IT Labor at Valpak

Been meaning to write this post for quite some time.  It’s not the most thrilling of agile topics so my procrastinator has been hard at work.

Let’s talk about the capitalization of IT labor!  Woo hoo!

Some of you may recall, if you’ve been following along, that Valpak was acquired by a private equity firm in January of this year.  With that came many changes including the direction from our new owners to capitalize on certain large IT projects (Valpak was previously owned by Cox Media Group which neither required nor encouraged such things).  Initially, this lead to a panic among us leaders.  How can we be agile while having to account for every minute of our time? 

After the initial panic subsided and we started doing some research, we found that there are very agile ways of handling IT labor capitalization.  In fact, we learned that there is no one right way to meet the GAAP standard.  There was hope for us after all!

Before I get down to the nitty-gritty business of capitalization, I’d like to share with you a few resources I found helpful along the way.

  • A super insightful blog post by Catherine Connor of 101 Ways on The Top 10 Pitfalls of Agile Capitalization
  • Very handy documentation from the Scaled Agile Framework (SAFe) folks on CapEx and OpEx with some great illustrations for understanding the concepts and options.
  • Last but not least, Pat Reed’s work on the Agile Accounting initiative as part of the Agile Alliance provides a great overview.  The Citrix case study is helpful too, but be be warned that if you contact the person that wrote it they will want to charge you $400/hour to answer your questions.

Now, let’s get down to it … I won’t bore you with the various permutations we attempted over the first few months (there was some pain involved).  Rather, I’ll jump to the good stuff … I have for you our IT Capitalization Policy as documented by myself and approved by our Accounting department and our auditors.

IT Capitalization Policy at Valpak

The following documents the policy for capitalizing software development costs at Valpak.  Not all projects will be capitalized.  Only certain large IT projects will be capitalized.  Projects to be capitalized will be identified each year as part of the budget process.

All software development work to be capitalized will be identified at the story level.  Stories to be capitalized will be flagged in Target Process as CapEx by the Agile Project Leader as part of the team’s process.  Budgeted projects will be capitalized using one of two methods, either by story count or actual hours.  Scrum teams will use the story count method.  Kanban teams will choose either story count or actual hours based on what is most accurate for their process.  The method applied will be consistent for any given team.  The Agile Project Leaders will maintain detailed calculations for all their teams and ensure auditability of data in Target Process.

For the story count method, stories are counted by the month in which they are completed (not necessarily released) in order to determine the percent of stories completed that are CapEx for any given team.  The CapEx percent is then applied to the number of available work hours in a given month to determine how many of those work hours are to be capitalized.  In addition, shared resources are taken into account and available work hours reduced by PTO.

In some special cases where a person on a team is solely focused on certain stories (not contributing to all of the stories in a given month), it may be more accurate to apply the story count method at the individual person level rather than the team level.   For instance, Team A completes 1 of 20 CapEx stories and that one story was the sole focus of a single person for 100% of their available work hours.  In such cases, the Agile Project Leader will determine the more accurate level at which to apply the story count method, team or person, and calculate accordingly.  Where person-level story count is applied, it will be notated in the detailed spreadsheets.

Here are several examples of the story count method applied:

  • A person dedicated to a single team who has worked every day in January (no PTO taken).  Their team completes 17 CapEx out of 20 stories in January or 85%.  There are 20 work days in January for a total of 160 hours.  This equates to 136 CapEx hours for this person.
  • A person dedicated to a single team who took a week off in January.  Their team completes 17 CapEx out of 20 stories in January or 85%.  There are 20 work days in January for a total of 160 hours but they took 40 of them as PTO for a subtotal of 120 hours.  This equates to 102 CapEx hours for this person.
  • A person split (shared) 50% between two teams in January.  Team A completes 17 CapEx out of 20 stories in January or 85%.  Team B completes 10 CapEx out of 15 stories in January or 67%.  There are 20 work days in January for a total of 160 hours.  This equates to 68 CapEx hours for this person for Team A (160 hrs x 50% x 85%) and 53.6 CapEx hours for this person for Team B (160 hrs x 50% x 67%).  If this split person took PTO, it would be taken out of the monthly available hours first.

The actual hours method may be applied by Kanban teams where it is determined to be the more accurate approach for their process.  Actual hours will be recorded by each team member for CapEx stories in Target Process.  The Agile Project Leaders will collect and report the actual CapEx hours for all team members each month.

For project leadership roles like Agile Project Leaders, a projected allocation will be applied each month to their available work hours.

 


My Mom, The ScrumMaster

Picture1A very special Mother’s Day edition of iamagile.

Have I told you the story of the woman that reinvented herself as a ScrumMaster in just 3 short months?  Well, that’s the story of my mom, Dottye Stewart.

As the story goes, this isn’t the first time my mom has reinvented herself.  She started out as a widowed mom to two daughters, pursuing higher education to be a positive role model for my sister and me.

After earning her MBA in Finance back in the 80’s, she did the consulting circuit for a while then quickly gained success in the life insurance industry as a marketing and business development executive.   After finding herself in a dead end job with a dead end, and morally corrupt, company last year (I won’t name names but I’m certain you could figure it out), she came to me and said, “I’m going become a Scrum Master”.  Admittedly, I laughed a little on the inside thinking there is no way someone can reinvent themselves into a Scrum Master at this point in their career.  Boy was I wrong!  If you ask my mom, she will tell you she’s been an agile leader throughout her entire work-life.  Not because she’s been subjected to my agile ways, but rather because of something called “facilitative leadership” that she learned while at GE Capital.

In October 2016, my mom began attending Tampa Bay Agile meetups regularly and, being the extreme extrovert in the family, she quickly became the social director for the ScrumMasters Guild, personally connecting with each and everyone.  Before 2016 was over, my mom had earned the Professional Scrum Master (PSP) and the ICAgile Certified Professional (ICP) and was being personally mentored by some of the best Agile Coaches in Tampa Bay from the AgileThought team.  By January 2017, my mom was gainfully employed at Bankers Financial as an Agile Coach and ScrumMaster.  That takes us to today.   While Bankers has been great training ground, she is openly pursuing new opportunities as ScrumMaster to continue along on her agile journey.

I guess the apple doesn’t fall far from the tree or, in this case, maybe the tree follows the apple.  I hope you are pleased to meet My Mom, The ScrumMaster.

Happy Mother’s Day Mom. You make me so proud to be your daughter!


How Do You Like Motherhood?

It’s been a while since I last posted … December, I think.  Some of you may recall, I was pregnant.  I gave birth to a healthy, handsome baby boy, Jetsen Edison Davis, on February 2nd and I’ve been so consumed with motherhood that I just haven’t had any interest or time for much else, including blogging.  Well, I’m back to work and I’ll be back to blogging soon enough.  I’ve got a few ideas percolating now.  Meanwhile, let me leave you with the answer to the question I’m asked most nowadays:  How do you like motherhood?

So far, I’m finding motherhood to be the most fulfilling thing I’ve ever experienced in my entire life.  To me, motherhood has been more fulfilling than any degree I’ve earned, award I’ve won, or relationship I’ve had … and yes, even more fulfilling than agile.  Until recently, I didn’t truly understand the love I would feel for this little being.  It’s truly magical!


About An Agile Pregnancy

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A few months ago my husband and I announced that we were expecting in February 2017.  Being the geeks we are, we announced “It’s a boy!” soon after with a line of binary code (that truly drove our families and not-so-geeky friends nuts trying to figure that one out).

It wasn’t long before I became overwhelmed by the sheer number of activities needed to prepare for Baby Davis’ arrival, involving nursery and supplies, classes and books, doctors and tests, and everything in between.  I’m convinced the gestation period for a baby is 9 months because the preparations take equally as long.

Being the proud agilist I am, I quickly turned to agile.  Yes, that’s right, agile can be applied to pregnancy too!  Here for your amusement and enlightenment is the first draft of my Baby Davis Trello board complete with a backlog organized by trimester.  Enjoy!

baby-davis-trello


The Top 10 Impediments You Avoid at OnAgile 2016

The 2nd annual OnAgile is upon us! OnAgile is the virtual conference put on each year by the Agile Alliance. It will be held live on Friday, October 20th and available on-demand for 90 days. The theme this year is Agile Transformation: the Enterprise, the Team & You.

Not only is OnAgile a super value at just $49 for members and $79 for non-members (not to mention the group discounts), but it’s also the world’s most convenient Agile event. In fact, there are many an impediment to avoid by attending a virtual conference and OnAgile is no different. With that in mind, I have for you “The Top 10 Impediments You Avoid at OnAgile”.

  1. Experience an amazing speaker line-up without having to get up from your cushy ergonomic chair or even leave your plush 10,000 thread count bed (if you choose to stay in bed, beware laptop burn which would create a whole other impediment). It’s like having the likes of Esther Derby, Jurgen Appelo, and Niels Pflaeging over for lunch, except you get to control their volume and even mute them on occasion. The full speaker line-up can be viewed here.
  2. No need to miss your morning stand-up … unless of course you really wanted an excuse to.
  3. No need to beg your boss to fly you across the country to attend a live conference. In fact, you are doing him or her a favor … better yet, you are doing the company a favor. And, at the cost of a couple extra-large pizzas, you could always choose to foot the bill yourself and avoid talking to your boss altogether.
  4. No pat-down from the TSA because you forgot to leave your Snoopy toenail clippers at home.
  5. Clothing optional! That’s right! So you missed laundry day because you were in flow for 12 hours on your latest side project. No clothes, no problem! Go commando for all we care. However, if you will be experiencing OnAgile from your office we strongly encourage the use of clothing.
  6. No waiting in line to ask a question behind that guy that’s not really asking a question but rather explaining a huge problem that only a consulting engagement can solve.
  7. So your all-too-diligent ScrumMaster has you already booked to groom the backlog on October 20th. Don’t fret! You don’t have to experience OnAgile live to experience OnAgile. All of the speakers’ presentations, content, and even the Q&A remain available to you to access over and over again for up to 90 days.
  8. With a front row seat to OnAgile, there’s no chance of getting caught next to that guy that came straight from an all-nighter at the conference party.
  9. No more racing to get to a conference room to see Johanna Rothman before it fills up. Trying to convince the volunteer that you are fine to stand the whole time never quite works out. At OnAgile, everyone gets in to see the speakers and I mean everyone.
  10. With a super-modern virtual conference platform displayed on your monitor, you will look plenty busy when your boss stops by to give you a new assignment or your spouse asks you to take out the garbage.

If you are interested in avoiding all of these impediments and more, be sure to register for OnAgile 2016 now. The event will be live on October 20th and then available in a recorded format for 90 days thereafter.

Help us spread the word using the hashtag #OnAgile on your social networks!


My Radio Debut on That Business Show

I had another first this week.  It wasn’t something on my bucket list but it certainly pushed me out of my comfort zone.  I appeared on live radio on July 6th on That Business Show’s Working Women Wednesday hosted by Jamie Meloni.  You are just now hearing about this because I didn’t want to let anyone know to listen live (except my husband, of course) for fear of sounding like a complete idiot.  In fact, I chose the July 6th date thinking many people would be out on holiday and there wouldn’t be anyone around to listen anyhow.  Leading up to the day of the show, my proud introvert self went through my usual 4 (or maybe 6 but who’s counting) stages of fear.  It didn’t help that Jamie sent an email two days prior mentioning live video streaming and an in-studio photographer.  What? Now video and pictures too!  Finally I reach the last stage of fear which was final acceptance.  I was brushing my teeth that morning and realized, “Damn. This thing is really going to happen”.  No tropical storm or South Tampa flood or widespread power outage was going to save me.  And so, I did it!   And I can’t, I won’t, say I liked it because that’s the introvert in me, but I will say that Jamie made it fairly quick and painless and I hope somewhat more entertaining than just listening to me give a talk.

Now, I share with you the video recording of this traumatic life event after having run it past good friend, Toby Morris, giving him direction to tell me whether to blog it or bury it.  In Toby style, he said to bury it on the front page of my blog, so here you go.

Video & Recap

Next, I’m off to begin the 4 (or 6) stages of fear for, not 1, not 2, but 3 panels I’ve committed to over the next 3 months.  Ugh!