Agile and Project Funding

Do you know of any organization which does not have an annual budgeting process?

Do you know of any organization which does not do an ROI analysis before deciding to fund a project?

There may be smaller projects which come out of the discretionary fund of a sponsor but any project of decent size would need to go through a process of ROI calculation and an annual budgeting process.

If this is the reality then how does it gel with agile practices?

How do you estimate the total cost of the project – a practice which is discouraged in Agile?

How do you estimate how long it is going to take even before you know the velocity of the team?

How do you arrive at the complete scope even before you have done your first sprint?

Incremental funding and failing fast may be a great ideas but how will it work in typical organization setup?

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4 Responses to “Agile and Project Funding”
  1. Gene Hughson says:

    Planning, budgeting, and estimating is a wicked problem, regardless of the methodology in use. As you infer above, it’s unlikely that an organization will go along with an open ended commitment to pump cash into a project that “will be done when it’s done”. By the same token, demanding precision where none can be expected only encourages someone to lie to you. The middle way is to accept that estimates evolve. Early estimates will have fairly wide error bars that narrow as more information is received. Changes will require adjustments to the estimate.

    Ideally, one would break a large project into multiple smaller ones that could be delivered incrementally. Smaller projects are easier to estimate since the destination becomes more sharply in focus the closer we get to it. That’s not always possible, however. In that case, the understanding needs to be that the farther out an iteration/sprint is, the less certainty there can be around the estimates. In a previous position we used a range of +/- 40% for initial scoping.

    One final thought: it’s always best to have those who will do the work provide the estimates and time must be allocated to having the team both create and refine them.

    • Udayan Banerjee says:

      How to marry this with organization budgeting cycle is the big question.

      • Gene Hughson says:

        Indeed. It’s definitely helpful where an enterprise uses shorter cycles (6 month in the case I noted above) instead of longer. One tool we used to use were scoping projects where the team could do some preliminary prototyping, etc. to increase everyone’s confidence in the projections.

Check out what others are saying...
  1. […] Agile and Project Funding « Technology Trend Analysis says: September 7, 2012 at 10:40 am […]

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