Beyond Budgeting: A Performance Management Model for Software Development Teams

Abstract

Abstract. The Beyond Budgeting performance management model enables companies to keep pace with changing environments, to quickly create and adapt strategy and to empower people throughout the organisation to make effective choices. We argue that this performance management model may be ideal for agile software development. Although drawn from different disciplines, both are designed for a customer-orientated, fast-changing operating environment and the Beyond Budgeting model suggests a useful overall framework for research in the performance management of agile software development teams. This paper uses the model as a lens to examine the performance management of agile software development teams within a large multinational. The findings show that some traditional performance management processes (most notably the budgeting process), which were designed to aid in the performance management of software development teams may impede the performance of agile teams due to their suitability adherence to the requirements of the systems development lifecycle model.

Productivity of agile teams: an empirical evaluation of factors and monitoring processes

“…Highsmith [2006] also refers to Beyond Budgeting [Hope and Fraser, 2003], a performance management model from the accounting literature. This model is conceptually similar and appears to align well with agile methods, since it aims to deal with a changing business and operating environment [Lohan et al, 2010]. The model consists of leadership and process principles that should be used together in a holistic way, improving organizational performance management [Bogsnes, 2008].…”

“…However, at the same time, there is an increasing interest on agile performance measurement systems, both in academia [Lohan et al, 2010] and industry [Highsmith, 2006]. Highsmith [2006] argues that we must change the way we measure performance to build agile organizations.…”

“…Beyond Budgeting advocates a high-performance climate based on relative success, accounting them for customer outcomes; people freedom to make local decisions that are consistent with governance principles and the organization's goals; place the responsibility for value-creating decisions on frontline teams; and open and ethical information systems. Lohan et al [2010] investigated the organizational issues and challenges that affect the performance of agile software development teams through the lens of Beyond Budgeting. They found that traditional organizational structures and processes intended to improve performance might end up impeding the performance of the agile team.…”