Agile Capitalization: Stop the Spreadsheet Madness!

"Agile capitalization." The very phrase sends shivers down the spines of many finance and IT professionals. It sounds complex, abstract, and frankly, like a major headache. But what if I told you it doesn't have to be any of those things?

The agile twist

The challenge arises because traditional capitalization methods were designed for waterfall projects, with clearly defined phases. Agile development, with its iterative nature, muddies the waters.

The myth of complication

The biggest misconception is that agile requires a completely different approach to capitalization. The truth is, the underlying principles remain the same: you're still determining the capitalizable value of an asset and depreciating it over time.

Ditch the double entry

Many organizations force developers to track their time in separate systems, just for capitalization purposes. This creates overhead and resentment. People can tell when their time is being wasted.

The solution: Integration and collaboration

The key is to integrate financial tagging within your agile execution system. Here’s how it works:

• Finance defines the tags: The finance team creates a set of standardized tags that align with their capitalization policies.
• Developers tag their work: Developers (or product owners) assign the appropriate tags to their tasks within the agile system.
• Roll-up is automated: The SPM tool automatically rolls up the tagged data for financial reporting.

The real value solutions like Clarity bring is making capitalization a whole lot easier.

Collaboration is key

This approach requires a close working relationship between finance and delivery teams.

Stop making it harder than it needs to be

Agile capitalization doesn't have to be a complicated, manual process. By integrating financial tagging within your agile execution system and fostering collaboration between finance and delivery teams, you can streamline the process and gain valuable insights into your software investments. Here are some keys to success:

• Embrace integration: Find the software that makes agile integration for capitalization a breeze.
• Collaborate: Agile doesn't have to be a headache, as long as proper communication is taking place.