Wednesday, April 16, 2008

Estimating blasphemy?

I am working with my team on a new project; we still are in the Inception phase, so even if our ideas are quite clear there are also many foggy aspects. Anyway, we've identified almost all the stories we shall need (the domain is well known) and we are estimating them with story points.

This project will be quite different from all the others we've worked on for many different reasons, so there will be a lot of uncertainity; I then reported to the management that our first estimate will actually be a guesstimate, thus possibly ranging from 60% to 160%. The Project Management Institute (PMI) has an equally broad, but more pessimistic, range for this stage of the project (75% to 175%).

As expected, the management reaction was less than cold, and I was told we had to narrow the gap between the worst and best estimates - a perfectly legitimate request. The problem is that we do not have enough informations at the moment, and only when we'll have an approved product definition we will be able to get to an 80% to 125% range (close enough to the PMI budgetary estimate), but luckily that should happen in a few days.

I'm afraid that will not be enough, because the second question after "how big will it be?" is always "how much will it take?", which obviously leads to "how much will it cost?". Estimates in story points are only a pure measure value, and a duration must still be derived. We cannot use our historical velocity values because, as said, this project is very different from the ones which generated them, so we'll have to run at least a couple of small iterations, observe the values and make a more or less reliable forecast.

Luckily our managers deserve their jobs and they understood our motivations, so I've been able to reach an agreement upon a spike in which we will very lightly touch all the layers of the application and the new technologies we've identified in some previous pilots.

This was another example of how an honest conversation can lead to a win-win situation: the team will not have the pressure of an irrealistic plan and the management will be able to take decisions and actions on the basis of sufficiently reliable informations.

1 comment:

Dr. PDG said...

Hi Moz,
Try checking out what the Association for the Advancement of Cost Engineering International has to offer for advice. They have a much more robust approach to cost estimating and cost control than PMI does, and while AACE caters primarily to any organization who use CAPEX as the primary means to fund their projects, I am quite confident what you are looking for, AACE will be a better reference than PMI.

Dr. PDG, Jakarta

Dr. Paul D. Giammalvo, CDT, PMP, CCE, MScPM
Senior Technical Advisor, PT Mitratata Citragraha, Jakarta/Singapore/Anchorage/Amsterdam
Adjunct Professor, Project/Program Management, Lille Graduate School of Management, Paris, FRANCE
Curriculum Development Consultant/Adjunct Professor, Asset and Project Management, University of Western Australia, Perth,
Board of Directors, Global Alliance for Project Performance Standards (GAPPS) Sydney, AUSTRALIA