Epics will eventually generate benefits. Instead of adopting a fixed working order, the work at hand is carefully prioritized to generate the highest possible value at any
given time. The value that an epic generates is associated with the duration of time the teams work on it. On a yearly basis the total portfolio costs are fixed, and the generated value can differ based on your prioritisation of epics to complete. Traditional portfolio management allocates costs (people, licenses, machines) to a project. “How much does it cost?” and “does a certain spending fit within the budget?” are the principal questions. The focus is primarily on money. Traditional budget controlling generally means looking back instead of forecasting future developments.

This is in direct conflict with many of the core values and principles that define agile working. Agile budgeting primarily focuses on the outputs of a project. What is the extra value that a team, person, epic, product, or feature generates? Is my current project workforce delivering the highest possible value? These are the typical questions that you must answer when you’re dealing with an agile portfolio. Because you pretty much know what a portfolio is going to cost, agile portfolio mainly focuses on the benefits. Hence, in an agile environment, you are steering based on benefits rather than expenses. Controllers who areused to traditional methods of finance control often find it difficult to grasp these important principles of the agile concept.

Combining an agile approach with traditional budgeting methods often creates striking mismatches. The main reason? Agile workflows typically use relatively short (two to
four weeks) “sprint” work cycles. You can adjust and optimize your backlog after every sprint, which leads to a very short control cycle. This highly flexible mode of operation contrasts sharply with timescales for traditional project management. These timescales, along with the corresponding resources and financial budgets,
often cover months or even years. The discrepancy between these two essential principles of workflow planning can lead to several issues, including delays, missed
opportunities, excessive cost overruns and lost benefits.The different starting points that govern agile workflows and traditional forms of portfolio management areanother area of particular concern.Traditional portfolio management is based on a fixed budget. You have a certain amount of money to your disposal and subsequently select the projects that fit your budget.