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In this Community Article, we explore how Jira Align supports financials, from budget and forecasted spend to estimated and accepted spend.
For customers trying to transition away from traditional PPM tools toward more Lean Portfolio Management friendly solutions, Jira Align will meet you where you are. We recognize large enterprise organizations often have chargebacks from one business unit to another. We understand that executives need to see if the spend on portfolio-level commitments is trending above or below budget allocations. And we empathize with Portfolio Managers, who want to set investment guardrails to guide how much funding is allocated to delivering against themes associated with a portfolio and Planning Increment.
Let’s start at the beginning with a Funding Plan. As an executive, I would use the Funding Plan to provide a real-time financial view to a subset of the organization, to enable tracking against its allocated funding levels. The report displays the parts of the organization that are specified in a strategic snapshot, which is used to establish both the strategy and funding for the organization.
It offers leadership an opportunity to view progress in organizational terms, using the organization structure hierarchy, instead of the usual program-based view. The report shows funding and costs from one or more selected snapshots, down to portfolio, program, and time period allocations, so that you can effectively manage funding levels in context.
In the Portfolio Room, Financial Leadership have the ability to view budget values noted in the funding plan, forecasted and estimated spend, and view actual spend, relative to portfolio-level deliverables and within a defined Program Increment, time period, or snapshot.
In Jira Align, to support Lean Portfolio Management practices, both time periods and work items at a portfolio-level will have budgets. Budgets are a direct input field so a user can either enter a value directly or pull in a value from a 3rd party system, via our REST API.
Once a budget has been established, a high-level forecast is captured. At this level, related programs and teams will be asked how many weeks per time period they think will be necessary to complete the defined work and a Forecasted Spend will result. Forecasted Spend is derived, based on people costs and past performance of participating teams and programs.
Independent of the forecast, programs provide estimates for their work. The work here is contributing toward the higher level commitment. The estimate types used are relative to the programs within their respective portfolio. Estimation types include Weeks, T-Shirts, and Points.
Estimated Spend is calculated by adding together all of the program level estimates related to the portfolio-level work item.
As work is completed by the teams in Jira, for each story completed, an accepted spend value is calculated by adding together the spend of all stories related to the portfolio-level work item.
When calculating spend, there are two costing methods to choose from, per portfolio.
These two costing methods are used in conjunction with how teams track their work, which is either by points or by hours.
And when reporting hours, the total number tracked by team members working on child tasks associated with the work item can be via native fields in Jira or via an integration with the Tempo Timesheets plugin, found in the Atlassian marketplace.
Because budgeting for capital expenditures is essential for a business to operate and grow in a healthy and profitable way, CapEx indicator flags are available on both portfolio-level and program-level work items.
As an executive, we all have a funding plan and a distributed investment mix, going into a time period. We allocate a good percentage of our budget toward capitalized deliverables that will surprise and delight our customers. But we also reserve budget to keep the lights on and invest in our platform.
But as work is estimated, we start to see the distribution deviate from our plan…
…and as work is being completed in Jira, we see our accepted spend deviate even further from our plan.
So what happened?
Sometimes, work just takes more or less than what we planned. Sometimes, as seen here in the pie chart, misaligned work is cannibalizing our budget. If I want to know specifically what misaligned work is consuming my budget dollars, a single click will show me the teams and the calculated spend.
Within the Investment vs Spend dashboard, the aggregate estimated and accepted spend values are clickable. We can get a more complete story and we can act on it, while there is still time.