Agile Projects Need Budgets, Not Just Estimates

The concept: Agile Projects Need Budgets, Not Just Estimates, from an article in the Harvard Business Review  Agile Projects Need Budgets, Not Just Estimates makes a great point about preparing estimates. Their basic assumption is that to perform estimates one needs to break everything down to tasks of a few days. And that is too much work. We couldn't agree more. The article goes on to show how for budgeting one needs not just a single point estimate but a risk curve and the number associated with a probability.... That a budget is a commitment, not just an estimate with no responsibility along with it. Again, that is right out of SEER's playbook.

Imagine when needing to budget, going to SEER-SEM, answering a few questions, using one of the quick scope methods, and geting a risk driven estimate  for an agile project. Then mapping that to a budget based on probability. Again that is exactly what SEER-SEM does, along with schedule risk, reliability, and more.

The HBR  author linked to a general purpose ballpark estimating (budgeting)  tool. But for software systems SEER-SEM is specific to the domain. In the example below the risk chart shows that there is a 70% probability of not exceeding a budget of $400,000. If the budget is $200K there is only a 20% probability of success... that is an 80% probability of overrunning, or not providing minimum required functionality, or deploying software that is not fully tested.  This 20% probability project should probably not be attempted as is. This kind of information, along with the anticipated value to the organization, makes for better decisions.

This is exactly one of the SEER use cases.  In addition to helping people make proper decisions and deliver projects on time, SEER sometimes alerts people to the infeasibility of a project before it is attempted.

For more information on SEER-SEM click here.

Cost versus budget analysis for better decision making