budgeting, estimation, planning, #noestimates and the agile …€¦ · •high-level estimation...

Phone: +1-610-644-2856

Measure. Optimize. Deliver.

softwarevalue.com

Budgeting, Estimation, Planning,

#NoEstimates and the

Agile Planning Onion

Michael HarrisPresident & CEO

©2016 DCG Software Value

All Budgets, Estimation and Plans Are . . .

Fantasies. . . more or less

2


Why Do We Budget, Estimate & Plan?

• Why centers on answering 4 very basic questions:

1. When will “it” be done?

2. How much will “it” cost?

3. What is “it” that I will actually get?

4. What can I afford?

3


Budgeting v Estimation v Planning

Budgeting

• How much money should I allocate?

• Which projects or products should we fund?

• Which projects will return the greatest amount of value?

Estimation

• What can be delivered?

• When can we deliver?

• How should teams be allocated?

Planning

• What tasks need to be completed?

• Who needs to complete specific tasks and when?

4


Classic Budgeting, Estimation and Planning

• The budgeting process is a forecast that helps make decisions about

which pieces of work are to be done.

• The estimate (believed to be more accurate) makes a project about

when the work will be completed (estimates the four questions).

• Planning provides tactical, task-level guidance.

5

Too high

1.5x

2x

1,25x

.8x.67x

.5x

*Probability

.25x

4x

P1 P2 P3 P4 P5

Actual

-

Too Low

ConeofUncertainty

-

Good Guess

Estimation

Budgeting

Planning


The Cone of Uncertainty

Too high

1.5x

2x

1,25x

.8x.67x

.5x

*Probability

.25x

4x

P1 P2 P3 P4 P5

Actual

-

Too Low

Cone

of

Uncertainty

All work has a cone of

uncertainty

– Sales, Testing,

Messaging

All: different steps and

widths!

-

Good Guess

Estimation

Budgeting

Planning

6


Time . . .

7

Budgeting

• Primary Stakeholders: Executives, Finance, Deal Makers

Estimation

• Primary Stakeholders: Project Managers, Team Members, Middle Management

Planning

• Primary Stakeholders: Team Members, Project Managers

P

r

o

j

e

c

t

T

i

m

e

l

i

n

e


Budgeting Answers

• How much money should I allocate for software

development, enhancements and maintenance?

• Which projects or products should we fund?

• Which projects will return the greatest amount of value?

Most organizations have a portfolio of work that is larger

than they can accomplish; therefore, they need a

mechanism to prioritize.

8


Planning Flow In Agile

9

Mike Cohn’s Planning Onion


Defining An Estimate

• Targets

– Statement of a desirable business objective

– Example: Taxes must be paid by April 15th

• Commitments

– A promise to deliver

– Example: I promise not to leave my taxes until the last minute

• Estimates

– A prediction

– Example: Preparation of my taxes will require many pots of coffee,

a large part of a bottle of aspirin, an internet connection and

around two weekends to complete.

10


Impact of Ineffective Estimating

• Impact of major schedule slippage is often dramatic:

1. Unrecoverable revenue losses

2. Not first to market

3. Public failure

4. Possible legal repercussions

• Corporations are more significantly impacted by schedule pressures

than any other factor

11


Does The Past Predict The Future?

A story of childish

hijinks, black paint,

a truck and straight

roads.

Sometimes

prediction

depends on

the context.

12


Estimation Pathologies (Jim Benson)

• The three-level process described above, if misused, can

cause several team and organizational issues.

• Proponents of the #NoEstimates movement often classify

these issues as estimation pathologies.

• Jim Benson, author of Personal Kanban, established a

taxonomy of estimation pathologies that includes:

13


Estimation Pathologies (Jim Benson)

• Guarantism – a belief that an

estimate is actually correct.

• Swami-itis – a belief that an

estimate is a basis for sound

decision making

• Craftosis – an assumption that

estimates can be done better

• Reality Blindness – an insistence

that estimates are prima facie

implementable.

• Promosoriality – a belief that

estimates are possible (planning

facility)

14


#NoEstimates

Reflects A Continuum of Thought

15

Throughput#NoProject

Woody

Zuill

Vasco

Duarte

• Break work down in small

chunks

• Assemble minimum viable

product (MVP) for feedback

• Generate continuous

feedback and re-planning.

• Break work down in small

chunks

• Continuously measure

throughput.

• Average throughput used for

forecasting

#NoEstimates Continuum


When Does #NoEstimates Work?

• The idea of #NoEstimates can be applied at the level of planning and

estimation IF the right conditions are met. Conditions include:

– Stable teams

– Adoption of an Agile mindset (both team and organizational levels)

– A backlog of well-groomed stories

• For a sprint a team can easy answer:

– When will “it” be done?

– How much will “it” cost?

– What is “it” that I will actually get?

– What can I afford?

16


Planning Onion and Timing

17

Budgeting

Estimating

Mike Cohn’s Planning Onion

Analogy

Parametric - Light

#NoEstimates

(Type II)

#NoEstimates

(Type I)


Case Study Context

Large software development firm, moderately hierarchical culture, several very large projects and many smaller

Mixed of SCRUM/XP, Kanban, SAFe for some large programs, Plan-based projects and independent testing

Strenuous budgeting process with tax accruals

Entrenched Program Office provides administrative functions

Mixture of internal projects and outsourced work.

18


Change Begins with a TMMi Assessment

19

• Assessment Process

– Survey

– Process and Artifact Review

– Interviews

• Analysis and Reporting

– Gap Analysis

» Strengths and Weaknesses

» Heat Maps

» Prioritized Improvements

• Action Planning

Process and

Artifact Review

Interviews

Synthesis

Planning

Survey

65%

35%


Putting Assessment Results Into Action

20


Evolution

• High-Level Estimation (product and release):

Release plans and product roadmaps were easily built from forecasts

for all external products and internal applications with 500 users or

more.

• Agile teams with a track record of delivering value on a regular basis.

Were allowed to leverage #NoEstimates for planning. Other conditions

include:

– Stable Teams

– Agile Mindset (both team and organizational levels)

– Well-groomed Stories

– Integrated testing personnel

• All projects and products are required to find a way to answer the

classic questions whether the work is done by single teams or by

scaled Agile programs.

21


Technique Pallet

• Budgeting Techniques

– Analogy (Macro)

– Business Case

– Roadmapping

• Estimation-Level Techniques

– Parametric Estimation

– Analogy

– Planning Poker and Rate (form of release planning)

– #NoEstimates (Flow)

• Planning Techniques

– Work Breakdown Structures (Plan-Based – non-integrated testing personnel)

– Points (various – FP mostly) and Sprint Planning

– Points (various) and Continuous Flow (Kanban)

– Stand-Up Meetings

– #NoEstimates (Flow)

22


Not All Happiness – Contractual Agile

• All outsourced contracts being transitioned to fixed cost

and date contracts leveraging a hybrid Scrum / Plan Based

project management solution.

• The PMO actively tracks these vehicles.

• #NoEstimate techniques are not allowed in this

organizations contract vehicles.

– Raja Bavani, Senior Director at Cognizant Technology

Solutions stated in a recent conversation with Tom

Cagley that he thought that #NoEstimates was a non-

starter in a contractual environment.

23

https://www.linkedin.com/company/1680?goback=.npv_5631740_*1_*1_NAME*4SEARCH_6g1s_*1_en*4US_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_tyah_*1&trk=prof-0-ovw-curr_pos


Final Thoughts

• All budget, estimates and plans are by definition are

imprecise

• Only be accurate within a range of confidence

• The single number contract which generates anger and

frustration fueling #NoEstimates movement

• #NoEstimates and classic estimation are tools to generate

feedback and create guidance

• The goal is usually the same, it is just that the mechanisms

are very different

24


Questions?

Mike Harris, CSM, SPC4

President

DCG Software Value

[email protected]

+1.610.644.2856 x22

Tom Cagley, CFPS, CSM,

CTFL, SPC4

Vice President

DCG Software Value

[email protected]

(440) 668-5717

25

mailto:[email protected]

mailto:[email protected]

budgeting, estimation, planning, #noestimates and the agile …€¦ · •high-level estimation...

Documents