Budgeting, Estimation, Planning, and #NoEstimates: They All Make Sense for Agile Testing

transcript

W10 Agile Testing 5/4/16 13:45

Budgeting, Estimation, Planning, and #NoEstimates: They All Make Sense for

Agile Testing

Presented by:

Michael Harris

David Consulting Group

Brought to you by:

350 Corporate Way, Suite 400, Orange Park, FL 32073

888-‐-‐-‐268-‐-‐-‐8770 ·∙·∙ 904-‐-‐-‐278-‐-‐-‐0524 -‐ info@techwell.com -‐ http://www.stareast.techwell.com/

Michael Harris David Consulting Group Michael Harris has more than thirty years of broad management experience in the IT fieldâ€”in R&D, development, production, business, and academiaâ€”and held numerous senior executive positions in Fortune 500 companies. An author and speaker on a range of topics related to the value visualization of IT, Michael is considered a leader in the software development industry. He became president, CEO, and majority owner of David Consulting Group (DCG) in 2006. Michael is a co-‐author of The Business Value of IT: Managing Risks, Optimizing Performance, and Measuring Results. Read more at valuevisualization.com.

Phone: +1-610-644-2856

Measure. Optimize. Deliver.

softwarevalue.com

StarEast 2016

Budgeting, Estimation, Planning,

#NoEstimates

and the Agile Planning Onion

Michael Harris President & CEO

All Budgets, Estimation and Plans Are . . .

Fantasies

. . . more or

Why Do We Budget, Estimate and Plan?

Why centers on answering a four very basic questions:

– When will “it” be done?

– How much will “it” cost?

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

– What can I afford?

Budgeting v Estimation v Planning

• How much money should I allocate?

• Which projects or products should we fund?

• Which projects will return the greatest amount of value?

Budgeting

• What can be delivered?

• When can we deliver?

• How should teams be allocated? Estimation

• What tasks need to be completed?

• Who needs to complete specific tasks and when? Planning

Classic Budgeting, Estimation and

Planning

– The budgeting process is a forecast 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.

Too high

.8x .67x

*Probability

P1 P2 P3 P4 P5

Actual

Too Low

Cone of Uncertainty

Good Guess

Estimation

Budgeting

Planning

The Cone of Uncertainty

Too high

.8x .67x

*Probability

P1 P2 P3 P4 P5

Actual

Too Low

Uncertainty

All work has a cone of

uncertainty

– Sales, Testing,

Messaging

All: different steps and

widths!

Good Guess

Estimation

Budgeting

Planning

Time . . .

Budgeting

• Primary Stakeholders: Executives, Finance, Deal Makers

Estimation

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

Planning

• Primary Stakeholders: Team Members, Project Managers

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.

Planning Flow In Agile

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.

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

Does The Past Predict The Future?

A story of

childish hijinks,

black paint, a

truck and

straight roads.

Sometimes

prediction

depends on

the context.

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:

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)

#NoEstimates

Reflects A Continuum of Thought

Throughput #NoProject

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 easily answer:

– When will “it” be done?

– How much will “it” cost?

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

– What can I afford?

Planning Onion and Timing

Budgeting

Estimating

Planning

Mike Cohn’s Planning Onion

Analogy

Parametric - Light

Integration Planning

Standup Meetings

#NoEstimates

(Type II)

#NoEstimates

(Type I)

Case Study Context

Large software development firm, moderately hierarchical culture and several very large project 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.

Change Began With A TMMi Assessment

• 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

Putting Assessment Results Into Action

Evolution

• High Level Estimation (product and release):

Release Plans and product road maps were easily be 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 of when, what and how much work will cost whether

the work is done by single teams or by scaled Agile programs.

Technique Pallet

• Budgeting Techniques

– Analogy (Macro)

– Business Case

– Road Mapping

• 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)

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.

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.

Questions?

Mike Harris, SM, SPC4

President

DCG Software Value

m.harris@softwarevalue.com

+1.610.644.2856 x22

Tom Cagley, CFPS, CSM,

CTFL. SPC4

Vice President

DCG Software Value

t.cagley@softwarevalue.com

(440) 668-5717