budgeting, estimation, planning, #noestimates and the ...€¦ · were allowed to leverage...
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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
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©2016 DCG Software Value
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?
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©2016 DCG Software Value
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?
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©2016 DCG Software Value
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.
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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
©2016 DCG Software Value
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
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©2016 DCG Software Value
Time . . .
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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
©2016 DCG Software Value
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.
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©2016 DCG Software Value
Planning Flow In Agile
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Mike Cohn’s Planning Onion
©2016 DCG Software Value
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.
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©2016 DCG Software Value
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
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©2016 DCG Software Value
Does The Past Predict The Future?
A story of childish
hijinks, black paint,
a truck and straight
roads.
Sometimes
prediction
depends on
the context.
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©2016 DCG Software Value
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:
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©2016 DCG Software Value
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)
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©2016 DCG Software Value
#NoEstimates
Reflects A Continuum of Thought
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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
©2016 DCG Software Value
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?
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©2016 DCG Software Value
Planning Onion and Timing
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Budgeting
Estimating
Mike Cohn’s Planning Onion
Analogy
Parametric - Light
#NoEstimates
(Type II)
#NoEstimates
(Type I)
©2016 DCG Software Value
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.
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©2016 DCG Software Value
Change Begins with a TMMi Assessment
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• 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%
©2016 DCG Software Value
Putting Assessment Results Into Action
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©2016 DCG Software Value
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.
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©2016 DCG Software Value
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)
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©2016 DCG Software Value
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.
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©2016 DCG Software Value
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
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©2016 DCG Software Value
Questions?
Mike Harris, CSM, SPC4
President
DCG Software Value
+1.610.644.2856 x22
Tom Cagley, CFPS, CSM,
CTFL, SPC4
Vice President
DCG Software Value
(440) 668-5717
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