Without Revenue Visibility, Does Agile Look Like an Expensive Hobby?

Cost Center vs. Agile: Can We Really Change the Rules of the Game?

Imagine you’re me: head of a cost center (IT Operations, let’s say). Your job, your team’s bonuses, even your department’s survival, mostly hang on one metric: cost efficiency. Keep expenses low, meet deadlines, and avoid rocking the boat. That’s the game.

Then leadership announces: “We’re going Agile!”

Cue the Fanfare: Agile is supposed to make us faster, more responsive, and value-driven. IT will finally step into the limelight as a business enabler, not just a cost sink. Sounds great, right? But here’s the catch: we’re being asked to adopt Agile while still being measured and incentivized as a cost center. Agile and cost efficiency? They’re oil and water in the world I live in, and the cracks are already showing.

When Agile Meets the Cost-Center Playbook

Agile practices aren’t just a mismatch, they actively clash with everything a cost center is measured by:

• WIP Limits: Fewer tasks in progress might improve flow and reduce bottlenecks, but in cost-center metrics, it looks like we’re producing less. Fewer "completed tasks" means worse performance on paper.
• Mob Programming: "Wait, you're paying four people to work on one task?!” In a cost-per-output world, collaboration looks inefficient, even if it saves time and errors in the long run.
• Discovery Work: Prototyping, research, and validating ideas upfront? Forget it. We’re judged on tangible deliverables, not on learning or reducing future waste.
• TDD: Investing time upfront to write tests that prevent defects? To cost-accounting logic, this delays delivery and increases expenses, even though it prevents expensive bugs later.
• OKRs (Objectives and Key Results): Even OKRs, intended to align teams around meaningful outcomes, often get twisted in a cost-center world. Instead of focusing on delivering customer value, our OKRs gravitate toward metrics like staying on time, within scope, and under budget, because that’s what we’re rewarded for.

The Bottom Line: Agile practices often make short-term metrics look worse, especially when costs and revenues are accounted for in separate silos. From my local cost-center perspective, these practices look inefficient, even though they may create value elsewhere. And when your department’s survival depends on those isolated metrics, embracing Agile can feel like career suicide.

The Real Killer: Metrics That Don’t Evolve

I tried to sell the dream: “If we reduce defects and deliver the right things, the company wins long-term!”

Finance: “Cool story. Can you prove it? Tie it to revenue?”

Spoiler alert: I can’t. Cost centers don’t get near revenue streams. Even when IT work indirectly drives sales or improves customer satisfaction, good luck putting a dollar sign on it in a way finance will buy.

So now I’m stuck:

1. Play Agile Honestly: Risk bad numbers (from a cost center point of view), budget cuts, and headcount losses.
2. Fake It: Run sprints and retros while secretly sticking to the old game.

Both options suck. One risks my team’s survival, the other sells out everything Agile stands for.

The Elephant in the Room: Should My Department Even Exist?

If we’re honest about what Agile really means, my department, IT Operations as a standalone unit, probably shouldn’t exist in its current form.

Agile isn’t about siloed departments optimizing their piece of the puzzle. It’s about cross-functional teams aligned around delivering value to the customer. That means breaking apart functional silos like mine and combining skills from IT, design, product, and business into self-contained teams focused on end-to-end outcomes.

In theory, I’m fine with this. It makes sense. But let’s not kid ourselves, it’s a political minefield.

• Functional Managers Become Obsolete: In a world of cross-functional teams, the role of a functional manager like me starts to fade. My power, my influence, and my team’s cohesion, all become less relevant.
• The Uncertainty Factor: What would I even do in this new world? There’s no clear roadmap for what happens to managers when silos break down. And while I can embrace the unknown, many others will dig in their heels to protect their turf.
• The Power Game: Let’s be real, some managers will resist Agile not because they disagree with the principles, but because it threatens their power, status, and the systems that keep them relevant.

This isn’t just a process issue; it’s a deeply human challenge that demands broad, committed engagement from the entire C-suite to drive meaningful change.

Why This Isn’t Just My Problem

This isn’t about me being bad at selling Agile, it’s a systemic issue baked into how organizations are structured:

• Cost Centers Stay Cost Centers: Departments like mine, labeled as cost centers, are judged solely on controlling expenses. It doesn’t matter if we deliver tools that enable multimillion-dollar sales, if it doesn’t show up directly on the revenue line, it’s invisible in the books.
• Revenue Teams Live in a Different Universe: Their world revolves around aggressive revenue targets. They’ll push for faster deliverables, often at the expense of quality or sustainable practices, because for them, speed equals sales, even if it leaves a trail of inefficiencies downstream.
• P&L Aggregation Hides the Truth: Costs and revenues get lumped together at such a high level that it’s nearly impossible to identify which expenses actually contribute to value. For example, IT might build a system that accelerates sales closures, but the benefit is buried in the overall revenue figures, leaving IT looking like an expense sink rather than a value driver.

The problem isn’t Agile itself. Agile practices don’t fail because they’re flawed, they fail because they’re forced into a system designed for cost control and siloed thinking, not value creation. Until we address these structural misalignments, Agile will continue to struggle to deliver its full promise.

Some Ideas, But No Magic Fix

I’ve brainstormed a few ways forward, but let’s be real, they’re all uphill battles:

1. Redefine the Metrics: Collaborate with finance to move beyond traditional cost-control measures. Introduce metrics like throughput, lead time, or value per feature, and crucially, make the connection to revenue clear and visible across all teams.
2. Reorganize Around Value Streams: Instead of departments like IT Operations, form teams with all the skills needed to deliver value from start to finish. (This might mean my current role disappears, something that’s hard for many managers to accept.)
3. Align Incentives: Stop tying my bonus to cost control. Reward long-term value instead.
4. Cross-Functional Alliances: Get cozy with revenue teams and show how we make their wins possible.
5. Run Small Experiments: Use quick wins (like WIP limits on one project) to prove Agile’s worth.
6. Dollarize the Value: Find ways to translate Agile benefits (like reduced defects) into finance-approved metrics.

Over to You

This isn’t just my story, it’s our story. Every cost-centered team in an Agile “transformation” faces this tension. The system punishes the very changes it’s asking us to make. And breaking down silos, while logical, comes with massive uncertainty, for teams and managers alike.

So what do we do?

Have you faced this? How did you navigate the political and structural roadblocks? Is breaking down functional silos truly the answer, or is there a middle ground we haven’t explored?

Let’s figure this out together. How do we make Agile work in a world still counting money the old way?