Curious about whether agile training delivers a good return on investment? This article breaks down key benefits of agile training, including boosts to financial returns and team efficiency. It also introduces ROI calculations, key metrics, and success stories so you can assess the value of agile training.
Key Takeaways
- Agile training enhances organizational capability, leading to benefits such as improved efficiency, customer satisfaction, and employee engagement, as evidenced by real-world success stories.
- Identifying key performance metrics, both financial and non-financial, is important for evaluating the effectiveness of agile training and maximizing its benefits within organizations.
- Calculating the ROI of agile training is crucial for aligning financial goals with project outcomes and assessing the overall value of improvements generated by the training.
The ROI of Agile Training
Agile training, like any training, comes with a cost. But are the benefits worth it?
The short answer is yes. Evidence shows that the investment in agile training–for teams, leaders, and individuals–pays off.
Agile training accelerates organizational effectiveness, empowering employees to make swift decisions and respond quickly to market changes.
A study from global consulting firm McKinsey found that when companies take a comprehensive approach to advancing agility (one that includes agile training) they see the best results.
The study found that these “highly successful agile transformations typically
- Delivered around 30% gains in efficiency, customer satisfaction, employee engagement, and operational performance;
- Made the organization five to ten times faster; and
- Turbocharged innovation.”
A Broadcom study of 160,000 projects across 50,000 teams found teams who learned to apply agile practices such as limiting work in process (WIP):
- Cut time-to-value in half
- Reduce post-release defects by 75%
The same study found that when organizations understand and follow agile guidelines for team composition and structure, they are
- 60% more productive
- 40% better able to predict deliveries
- 60% more responsive to user and stakeholder needs
Examples from Successful Transformations
Real-world examples further illustrate the impact of agile training for teams and leaders.
Best Buy Canada transitioned from a waterfall development model to Scrum with the help of corporate agile training, workshops, and coaching. Company leaders estimate this transformation led to:
- $40 million in cost savings
- Improved time to market
- Increased incremental revenue
- More robust revenue protection
When Mountain Goat Software helped Salesforce transition to agile, across the entire enterprise in just 3 months, they did it through a combination of upfront training and coaching followed by a 12-month investment in continuous improvement.
Their internal stakeholders were thrilled with the results. One remarked that the transition “delivered total transparency and unbelievable productivity–a complete win.” No wonder they were thrilled, with results like these:
- 61% reduction in time between each major release
- 94% more features delivered per time period
- 38% increase in developer productivity
How to Calculate the Value of Agile Training
Any calculation of the ROI of agile training requires two estimates: the benefits of the training and the cost of the training. You can see the calculation in the following formula:
Mountain Goat has made this calculation easier with a free Agile Training Cost / ROI Calculator.
If you can’t wait, jump right to the calculator. But you’ll get better results if you read the short sections on benefits and costs.
Step 1: Estimate Productivity Gains
As McKinsey and Broadcom have proven, agile training programs have many benefits. To make things easy to quantify, however, when thinking about the cost vs benefit of agile training, I recommend focusing on only one: productivity.
Productivity is the speed with which a team turns new ideas into new functionality that achieves business goals.
Research on agile team productivity improvements found that the median improvement for agile teams was 88%, with a minimum of 14%. I recommend starting with an estimated improvement of 30%, the amount from the McKinsey study. You can adjust up and down from there using our ROI Calculator.
Step 2: Estimate Teams Current ROI
Most teams or departments have no idea how much value they provide to the organization. To make it easier, our ROI calculator defaults to 15%, which is the average ROI across the tech industry. This means that for every dollar spent on the team (compensation, etc.), the organization earns $1.15 in return.
The ROI For an average agile team, then, is the cost of their salaries + 15%
Step 3: Estimate the Cost of Agile Training
Many organizations make the mistake of thinking only about the direct cost of agile training–the amount they’ll pay a training provider.
We recommend using the following formula to arrive at an accurate estimate of the true cost of agile training:
Direct Cost of Training
The cost of the training itself depends on the training provider. Private training from Mountain Goat Software combines a fixed fee for a minimum number of participants and a per-person amount for any participants who exceed that amount. It fits well with our philosophy that it's essential to train the whole development team
Cost of Participant Time
Teams must take time away from work to train. We use the following formula to arrive at an approximation of this cost.
Travel
Travel costs can be a consideration for training.
- Time ((the cost of the time spent traveling to and from training)
- Expenses (flights, hotel, etc.)
The Agile Training Cost / ROI calculator includes inputs for these values.
Step 4: Use Calculator to Arrive at an Estimated Training ROI
With all of these estimates in hand, plug the numbers into our free Agile Training Cost / ROI Calculator to calculate the ROI you can expect from agile training.
The Value to Expect from Agile Training
Most projects are successful if they return 30% on their investment. Although the ROI calculator can provide a rough estimate of the value of training, you’ll want to temper this with your own analysis of some factors that are harder-to-quantify.
Remember, Quality Matters
The first is the quality of the training provider. The more confident you are that the training will be effective, the higher the benefits you might expect to receive.
Consider Secondary Benefits
The second are the proven benefits of agile that are not included in the ROI calculator, including faster time to value, greater predictability, improved innovation, higher user and stakeholder satisfaction, and better quality. I want to talk about two of those harder-to-quantify benefits briefly: faster time to value and greater predictability.
Agile Training Helps Teams Achieve Faster Time to Value
Agile teams deliver value every iteration, so they are able to get working product lands in customer hands much more quickly. You can see how agile teams deliver value more frequently in the animation below.
Research supports values of 37% - 50%, but unless your teams are delivering very slowly now, I recommend assuming a 10% improvement to avoid overestimating the benefit here.
Agile Training Helps Teams Grow More Predictable
High performing agile teams know how to create accurate estimates and reliable plans of what they can deliver and by when. Expect well-rounded agile training to improve predictability by up to 10%.
Find a Provider to Help Teams Get It Right
Finally, remember agile teams are more likely to deliver the right features in addition to delivering them more quickly. Finding a training provider who truly helps teams think about and deliver the right features will change the calculus on your predicted return.
When considering the value to expect from agile training, I encourage you to use the free Mountain Goat agile training ROI calculator to arrive at an initial ROI number. Then add to it the softer factors of quality, secondary benefits, and the value of delivering what customers actually need.
