2 min read

How Jira and Quickbooks Work Together To Streamline Financial Processes

By Ashley Halleck on Jul 15, 2020 12:49:41 PM

2020 Blogposts_Pros & Cons of WFH copy

Before I joined Praecipio Consulting, my background was in financial services, so I had never heard of the Atlassian suite of software before. My work-life consisted of strictly Excel, email, and a Bloomberg terminal. Needless to say, I was a bit confused during my first week as to how Atlassian’s software (in particular, Jira) would work with my new role in accounting. The more I learned about Atlassian’s software, the more I asked myself, “How does process management software geared towards developers apply to a financial controller?”

It’s safe to say that my early assumptions about Jira couldn’t have been more incorrect. I can seamlessly link every transaction to ongoing projects, open accounting issues, and everything under the sun that exists in Quickbooks (our system of record). I can’t tell you how much easier it is to simply reference a Jira ticket in a Quickbooks transaction instead of having to go through the arduous process of saving everything to Quickbooks. As a result, I am now as dependent on Jira as I am on Quickbooks!

How it works

Here at Praecipio Consulting, we created an Accounting project in Jira Service Desk, which is where we prioritize all invoicing and client correspondence. Once we create the ticket, it is assigned to the appropriate resource, and then all correspondence with the client or internal employees is attached to that issue, either through comments or cc'ing the ticket when sending an email. We use issue types like Accounting Submission, Generate Invoice, Billing Question, or Task. Each of these issues has unique fields and unique workflows that ensure it ties directly to an entry in Quickbooks and follows the necessary steps for entry.

In addition to using Jira Service Desk for invoicing and client correspondence, we integrated Salesforce and Jira to automatically create leads for licensing and projects alike. The workflows are specific to the opportunity type and auto-create the appropriate subtasks for accounting and sales. These issues are automatically assigned to the appropriate resource as you move each lead through its workflow. We reference each issue in Jira to the appropriate bill or invoice in Quickbooks, creating traceability for each opportunity. This integration ensures that we don't overlook any step in the process, from the closing of a sale to sending the final invoice.

Lastly, we use Tempo Budgets to perform billing closures on all of our projects. Budgets provides a perfect snapshot of the management of our planned vs. actual profit margin, revenue, and costs. This allows us to see which projects were over or under budget and ensures everything was billed accurately per each statement of work. 

 

To say the least, I do not know how I would do my job without Jira, Jira Service Desk, the Tempo suite of products. These tools aren't just solutions for developers; team members within any business unit can use them to improve their processes.

As we start the second half of the year, there is no better time than now to evaluate how you can automate tasks and streamline your accounting processes. Connecting Quickbooks to Jira could just be the solution that you never knew you needed!

Topics: jira accounting finance tips quickbooks
8 min read

Project Cost Accounting in Agile | Part 2 of 3

By Amanda Babb on Apr 5, 2019 12:00:00 PM

Second of Three

This is the second of a three series blog. When we last left our intrepid writer, we learned that the secret of Project Cost Accounting in Agile is Nothing. Fixed Teams means Fixed Costs. Fixed Teams means predictable velocity. In Kung Fu Panda 2, however, there is a danger lurking on the horizon: Lord Shen (a peacock) believes in a prophecy which leads him to destroy all pandas in China. He also yearns to regain the respect of his family by conquering China with a new weapon. In many organizations, Lord Shen is the dreaded spreadsheet: the ability to modify project costs based on resource leveling and moving Teams to the work.

Embrace the Past

Let me make this clear: tools are only as effective as the hand that wields them. Lord Shen took gunpowder, used in the making of fireworks, and developed cannons to defeat China. Something that was devised to bring joy to the masses was changed into something destructive which, had it not been for the fortitude of Po and the Furious Five, could have ended disastrously for China. Let's take a look at why project cost accounting can lead us to further victory by embracing our past while securing our future.

The Agile Team Seeks Balance

The Agile Team seeks to maintain balance: deliver the right functionality at the right time producing as much value for the business as possible. Scrum Master, Product Owner, and Team must work together to understand and provide the value. When business value is monetized, it becomes an easy value to track as a KPI, but hard to predict. What did we get for the $260,000 of labor costs we incurred for the team? In fact, what did we get for the $2.6m of costs we incurred for the Agile Release Train (Team of Teams)? If we were able to make revenue on the effort, then the math is simple: subtract the revenue from the costs and we see our net gain or loss. But we all know that actual financial management in any organization is decidedly more complicated. At least in the United States, there are tax breaks for Research and Development, differences between capitalizable and operational funding, and other financial aspects that many people who are much smarter than me spend their careers managing. Is there a way of reconciling our past models with our current and future state of agile? Can we gain the inner peace Master Shifu states Po (and by proxy, the audience) have yet to attain?

PI Boundary

There has been a debate raging on in the agile community around this concept for a few years. While I do not have all the answers with respect to this topic, I have a few ideas. One organization in particular comes to mind where this worked beautifully: a Value Stream with four Agile Release Trains (ARTs) was given their annual investment of $100m to be spread across seven Strategic Themes. The owners of each Strategic Theme came up with a series of initiatives and prioritized them against one another at each PI Boundary. Since Train costs are fixed at the Program Increment (PI) Boundary, if an initiative was completed, its cost was removed from the $100m pool. Any additional variables such as number of Sprints if an initiative was completed mid-PI were accounted for at the PI boundary as well. Simple, elegant, decentralized.

Lean Budgets

However, there was still the need to understand how much of that chunk of money remained at each PI Boundary and whether additional funds could be allocated to another Strategic Theme or another vertical within the company if money was left over. In Kung Fu Panda 2, Po, upon being confronted with a pack of wolf bandits sees a symbol and flashes back to his youngest memories: he's seen the symbol before, but cannot grasp the importance of it. He only knows it's something to pay attention to. Much like when, in SAFe, we discuss the concept of Lean Budgets. We instinctively know this is something to pay attention to, but we still cling to project cost accounting as our method of reconciliation. Below is an example of Lean Budgets in SAFe. 

Project Cost Accounting in Agile past and future

https://www.scaledagileframework.com/lean-budgets/

Value Stream

The Lean Budgets concept strives to balance governance and empowerment while providing a simple funding model for a given Value Stream. A Value Stream is the organizational structure that provides a continuous flow of value through solutions to the customer (aka the Execution Engine). For example, a Value Stream can be a factory or a hospital. It can also be a development organization - as long as it is focused around solution delivery to a customer. Many organizations struggle to define Value Streams and instead loosely group teams together under a resource manager or other traditional reporting structure and call it an Agile Release Train. While effective on the surface, it complicates coordination across efforts. It's not until a common solution and purpose is defined that the organization can move forward. Lord Shen, as a common enemy across districts, aligns the Valley of Peace and Gongmen City. The teams come together with the needed resources to eventually defeat Lord Shen, but not without trials and tribulations. It is not easy to align an organization to value delivery just as it was not easy to eventually defeat Lord Shen.

If Teams are Fixed, Costs are Fixed

As I stated in the previous post, if Teams are fixed, costs are fixed. If Trains are fixed, costs are fixed. The only funding needed to produce a solution is to cover the cost of the Train. And the cost of the Train should be predictable through a PI. Assuming a single Train in the Value Stream, if each project team costs $260,000 per year, then a Train with 10 teams costs $2.6m per year. Divide the cost of the Train by the number of Sprints in the year (26), then multiply by the number of Sprints in the PIs (typically five), $50,000 is needed for the Train in the PI. Provide the Value Stream $50,000 and watch them work.

Once a Value Stream is defined, Lean Budgets then states it is important to "Empower Value Stream Content Authority." Storming Ox and Croc sit, defeated, in Gongmen City prison. It's only when the Furious Five and Po join them and demonstrate their ability to win a single battle that the two become empowered enough to try and save their city. Before this initial battle, there was no plan other than escaping Lord Shen. The Stretch Goal was to also destroy his cannon. There was no meticulously created work breakdown structure. There were no step-by-step dependencies. There was a single solution the Train needed to implement: learn Lord Shen's plan, escape Lord Shen, regroup to create a plan to defeat him. Our Train (Storming Ox, Croc, the Furious Five, and Po) completed their objective and stretch objective simply by understanding their value and executing on a single purpose.

Project Cost Accounting Starts with the Goal

If, as an organization, we instead try to use project cost accounting, we hinder the Train's ability to provide value. Project cost accounting starts with the goal: defeat Lord Shen. To defeat Lord Shen, we need all three Kung Fu Leaders from Gongmen City: Thundering Rhino, Storming Ox, and Croc. If we have all three, we can defeat him in a day and move onto the next project...er...battle. Three resources for eight hours = 24 resource hours. At $50/hour (our typical cost per hour), $1200 to defeat Lord Shen. This leaves the Furious Five and Po to defend a village from wolf bandits who, in fact, are Lord Shen's minions. The solution does not address the problem as a whole: Lord Shen is the root cause of the battles thus causing the Teams to move to the work. As we move through the story, it took the entire Train to defeat Lord Shen in just one battle and had Po and the Furious Five team members had content authority (knowing what Master Shifu knew about Lord Shen), they might have been able to save Thundering Rhino.

Evidence = Value Delivery Priorities

There are three other parts of Lean Budgets we haven't addressed: Provide objective evidence of fitness for purpose; Approve Epic-level initiatives; Exercise fiscal governance with dynamic budgeting. Let's take objective evidence first. The System Demos and DevOps model addressed in the Program Level of SAFe provides the organization the ability to provide objective evidence. Is it working code in production with dark features toggled on? Yes. Value has been delivered to the customer. Did our intrepid warriors escape? Yes. They were able to escape Lord Shen. However, what happens if value was not delivered? What happens if it takes another PI to deliver the solution? Taking the foundational approach from the project cost accounting model, we have to fund the Train for a second PI. Instead of $50,000 to deliver the solution, it is now $100,000 ($50,000 per PI times two PIs). However, if the cost of the Train has already been accounted for, this is a simple shift in priority, not a movement of funding. You don't have to find another $50,000. Instead, you negotiate whether it makes sense to continue the effort or abandon it based on other value delivery priorities. The path to inner peace starts to become clear.

Approve Epic-Level Initiatives

This ties beautifully into the next part of Lean Budgets: Approve Epic-level initiatives. As we established, the funding is there. If after evaluating the fitness for purpose, the choice is to abandon the effort, the Trains and Teams do not disband. Instead, the work changes as priorities shift toward the next Epic-level Initiative - moving the work to the Teams and Trains. The costs remain constant: only "how" changes, not the "what". The Epic-level initiative is still to defeat Lord Shen: it is the approach that changes for Po and the Furious Five ultimately giving them the flexibility to deliver the victory to China. The Teams and Trains shift to the new strategy and work toward the solutions continue.

Fiscal Governance with Dynamic Budgeting

Lastly, we address the final step on the path toward Inner Peace: Exercise fiscal governance with dynamic budgeting. Much like achieving inner peace, this is not something that is achieved quickly. The recommendation from SAFe is this is addressed semi-annually whereas project cost accounting re-evaluates every work effort once complete. If the effort is small (e.g. 1 month or two Sprints), the allocation of funding to the Team or Train must be evaluated off-cadence meaning mid-sprint or mid-PI. Depending on the internal procurement procedures, this can become a Herculean effort for Business Owners, Epic Owners, and oft times, the Team or Train. It is an unnecessary distraction and thoroughly disrupts the execution. Remember the Kung Fu Leaders of Gongmen City. The first battle with Lord Shen was lost when defined to a specific Team without the proper resources and an unrealistic estimate of the level of effort. Subsequent battles also proved project cost accounting failed the Team: the Furious Five were imprisoned, Po was injured and near death only to be saved by a soothsayer showing him the truth of his past.

Using Agile to Secure the Future

Po reached Inner Peace by embracing the tragedy of his past and letting go. However, we have to remember the lessons we've learned throughout the story. Understanding our past makes us better prepared to embrace our future and win battles. Project cost accounting is a great model when running an organization that is aligned to cost centers. But by realigning cost centers to Value Streams, the burden of project cost accounting is lessened and planning processes can become more efficient. When aligning to the quintessential tenet of agile, trust, you, too, can achieve inner peace.

Topics: accounting scaled-agile roi program-increment lean-budgets project-management
5 min read

Project Cost Accounting in Agile | Part 1 of 3

By Amanda Babb on Mar 28, 2019 5:13:43 PM

First of Three

If you've read my other blog posts or watched one of my webinars, you should be familiar with my tendency to intertwine somewhat unrelated concepts together. I like doing this because it gets folks thinking: thinking about serious business and process things in a totally different context. This is the first of a three series blog. Today's topic: The secret ingredient is nothing.

pandaSecret Ingredient

In DreamWorks Animation Kung Fu Panda, Po states to his dad, Mr. Ping (a goose), that he doubts he is his son. Mr. Ping looks at Po very seriously and announces he has something to tell Po. Po, at his most vulnerable, and by proxy, the audience, expects the Big Reveal: Po the Panda is not the son of Mr. Ping the Goose. Instead, Mr. Ping reveals the Secret Ingredient in his Secret Ingredient Soup: nothing. This leads to Po's epiphany that he in fact is worthy, is the Dragon Warrior, and, with the Furious Five, can defeat Tai Lung. Po has had the ability all along and nothing can stop him if he believes in himself.

Project Cost Accounting

Most organizations work with what is called a Project Cost Accounting model. If an effort provides the most value to a specific cost center, the cost center is responsible for estimating costs as well as the length of time for the project. While other costs such as rent, infrastructure, licensing, etc., are factored in, the most expensive resource is the people. The Project Cost Accounting model respects capacity management and resource leveling. If we need to release something in six months (26 weeks) and it will take 26,000 hours: 26,000 hours at 40 hours per week for 26 weeks is 25 people. Multiply the hours by the average cost rate ($50/hour) and the effort will cost $1,300,000 plus "other costs" such as infrastructure and the like. The Project Manager asks for the funding from the specific cost center and the project moves to execution mode (moving the Teams to the work). In reference to Kung Fu Panda, Master Oogway states that Po shall be the Dragon Warrior much to the dismay of the Furious Five and Master Shifu. No effort to dissuade him shall be heard. Raise your hand if you've ever started or managed a project that has left you feeling slightly dazed, incredulous, or rather disheartened.

Iron Triangle of Project Management

So you embark on your quest...er...project. Master Shifu tries to train Po using the traditional methods that were successful for the Furious Five. This leads to hilarious confrontations between the two as little progress is made and Master Shifu resents his time spent with Po. Much like Master Shifu tries to fit Po (and the team) into his model, the Project Cost accounting model adheres to the Iron Triangle of Project Management as well as several other assumptions. The other assumptions include: skill set is equal across resource types, resources are fully dedicated to the project, resources are in place on day one of the project, and work starts day one of the project. We know this is not how it plays out in the real world. Skill sets differ based on experience or technology, resources are usually split between multiple efforts, hiring and onboarding processes delay resource start dates, and work will start on the first day, but not everyone will have work to start on the first day.

An Agile Team is Fixed

The fact remains the Project Cost Accounting model is flawed when managing agile development teams. The strength of the agile Team is their ability to self-organize and create a predictable Velocity. Even before Po joined the Furious Five, Tigress, Mantis, Crane, Viper, and Monkey became legends throughout the Valley of Peace by working well together. An Agile Team is fixed: the number of resources should not change. Project cost Accounting comes into direct conflict with agile planning: because my team of six people is fixed, I will only ever be able to get 240 hours out of the team per week (40 hours per person per week). If the project is estimated at 26,000 hours, it will take 108 weeks to complete and exceeding the release timeline by over a year and a half. While an agile Team removes the assumptions of equal skill sets, dedicated resources, day one start, and day one work start, the 6-month deadline is still real.

Agile Team Dynamics

Tai Lung is headed to the Valley of Peace and he will arrive within a specific timeframe. The Furious Five (plus Po as a noob) then head off to defeat Tai Lung before he reaches the Valley of Peace. As we know, the confrontation does not go well. The team slinks back to the Valley of Peace bruised, broken, and defeated in more than the physical. In-fighting, blame, distrust: there's a reason as adults we relate to kids' movies. In this moment, Po is "that guy". Po's mistakes put Tai Lung's defeat at risk and prolonged the timeline. It also impacted the entire Valley of Peace and allowed danger to further encroach on the innocent. Raise your hand if you've ever felt the same during the course of a project.

If only we had thrown an army at Tai Lung! We could have easily defeated him before he arrived in the Valley of Peace. This incorrect assumption based on Project Cost Accounting then destroys the trust of the PMO in the agile organization. The dynamic of the team as it comes together only by playing off each others' strengths and weaknesses and acting as a team.

Don’t Disrupt the Team

Once the Team is set, it should not be changed based on Resource Leveling or Project Cost Accounting. Instead, moving smaller pieces of work to the Team results in greater throughput. Prioritizing the smaller pieces of work correctly to fit a deadline is critical as well. Po's training was very disruptive to the Furious Five and Master Shifu's Inner Peace. However, once the Team organized and defeated Tai Lung, they were able to save Kung Fu in Kung Fu Panda 2 and expand the lessons learned by Po to a whole village of pandas in Kung Fu Panda 3. The same can be said of Agile Teams or Teams of Teams. Adding a person to a Team to a Train or adding a Train to a Solution Stream based on Project Cost Accounting will disrupt the predictable velocity of the Team or Train and will likely discourage them from innovating or taking risks. The same goes for removing a Team or Train. Adding resources as dictated in Project Cost Accounting will cause disruption and will not allow you to vanquish your enemies...er...complete your project any sooner.

More Secrets

The Secret to Project Cost Accounting in Agile is this - There is no secret. If you follow the concept of an Agile Team, Project Cost Accounting and ROI in an agile framework is simple. If Teams are fixed and Agile Release Trains are fixed, resource costs are fixed. SAFe embraces this within Lean Budgets. It simply requires the organization to completely change how project financials are planned and reported. Stay tuned for next week’s blog, part 2 of 3, where I’ll share more secrets of Project Cost Accounting in Agile. 

Topics: accounting scaled-agile roi project-management

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