Introduction
So here's a thought: One of the great things about Agile (actually this is quite common in many 'methods'), is that it attempts to measure the value added to an organization by developing software.
Except it doesn't.
It merely measures cost in a comparative manner, i.e., one that doesn't use your local currency but instead each item is measured relative to another. For example, the classic function point of one database table hooked up to a single web page might be 3 points whereas 3 pages might be 9.
Great, we can make an attempt at measuring the cost of 1 point and hence gauge the cost of and the work achieved every arbitrary period. We can even compare the price of the work done with that of our original budget (and wonder where all the missing money is). Except Agile never has anything to say about the upside as we never measure the benefits of the software we create and very rarely the money we saved.
I'd love to tell my customers: Due to my work, past clients have saved £X or increased their revenue by £Y. But I've never had the opportunity to measure either.
If you've read anything about the 'Lean Startup', then you would also have heard about the Build-Measure-Learn feed back loop and the methods of Lean Accounting. In short, what we should be doing (if we want to be building an ever improving business) is running continuous science experiments and devising objective measures of success with respect to cashflows. Each time we build a product or add a feature, we should be able to measure the success (or failure) of it and the techniques we used to build it.
Lean Accounting has some serious merit, however I don't see much take up in the world of finance, possibly because we leave marketing and management to people without scientific training or worse some businesses by their nature are designed to be cash cows.
