Moving from Project funding to Product funding falls in the “big deal” category for companies. It’s a bit like a household budget created once a year to one updated every month. But, like a budget that changes in response to household conditions (think pleas for a new cell phone from persistent teenagers), the Product funding mindset is essential for companies who want to transform from an Agile organization to one with agility. It’s a must-have if organizations want to respond nimbly to changing marketing conditions.

Before we jump too far ahead, let’s start with a quick examination of each methodology.

Project Funding versus Product Funding: What’s the Difference?

The Project funding model aligns with typical Waterfall processes.

  • Projects, by nature, are timeboxed with assumed start and stop dates.
  • Teams and resources can often be spread or “peanut-buttered” (apologies to those with nut allergies) across several projects simultaneously.
  • Annual planning activities usually take months, with teams required to give estimates based on high-level requirements.

Product Funding in ServiceNowIn contrast to Project funding, Product funding aligns with typical Agile Scrum or Agile Kanban processes:

  • Products are not timeboxed but tend to exist as long as the Products are profitable.
  • Teams and resources are static, often supporting a single Product or Product Group.
  • Planning and budgeting are simplified as work is brought to these static teams.
  • Product backlogs are prioritized and ranked, with teams continuously moving to high-margin Products.

With those differences in mind, let’s talk about tools. There’s an overwhelming number of tools that support Agile development methods such as Scaled Agile Framework (SAFe). There are also many tools that support a Product Funding model. However, few tools combine and enable both methods as well as ServiceNow.

ServiceNow Investment Funding

The ServiceNow Investment Funding module allows organizations to configure a Product hierarchy that supports budgets and actuals for CapEx and non-CapEx work. While ServiceNow allows multiple configurations, one of the most popular hierarchies might look like this:

  1. Portfolio
  2. Product Groups
  3. Products

For example, let’s imagine an eCommerce company with an International Shopping Portfolio consisting of the following Product Groups and Products:

Go From Project Funding to Product Funding - ServiceNow - Rego Consulting

On an annual basis, budgets are allocated to the overall Portfolio and then doled out to each Product Group. The result? The need for classic annual planning activities all but disappears. Instead, there is a constant review of an ever-evolving proposal backlog drawn down from the available budget allocated to each Product.

Additionally, SAFe work Items such as Epics, Features, and Stories are then created against a particular Product. It’s important to note that Epics can belong to multiple Products with proportionate budgets extracted from each Product. This activity happens throughout the year and allows organizations to shift to market demands rapidly.

Simply put, the speed of business today doesn’t support the principles behind planning Projects for an entire year. By shifting from a Project funding model to a Product funding model, organizations can:

  • Maximize revenue by moving Agile teams to support higher profit-margin Products
  • Pull the highest-ranking Initiatives from a backlog of Product Ideas
  • Calculate the ROI to justify why a particular Initiative deserves attention

For more information, check out Rego Consulting’s free webinar on Investment funding through ServiceNow.

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Let Rego Be Your Guide

Rego’s expert consultants are here to guide you on your ServiceNow Product funding journey, whether you are an expert or just beginning. Contact us today to see how we can help. 

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