Creating Estimations in Software projects[Agile]: 1

Managing Cost is not an easy task. Though some well defined processes do exist to manage costs, some of the old processes like RUP have loads of artifacts associated with them. PMBOK outlines five process for managing the Scope, six for Time and three for Cost. The good part about PMBOK is that you can always select the process groups and customize them the way you need them (depending on the project management methodology you are using).

Talking about PMBOK, let’s see how it can help in executing Agile Projects. PMBOK is a group of processes where you select the processes upfront. In Waterfall, you define the scope upfront and then keep iterating [using scope control and change requests]as the project moves on; while Scrum [Agile Project Management Process] is both an iterative as well as an incremental process.

The challenge here is to create an incremental delivery with the PMBOK.  To achieve this, there is an iteration on initial design, scope and estimation which is done on a broader level, so that the finer details of the features can be changed during their own iterations [later during the delivery phase].

ESTIMATION SPRINT is done to base estimate the Cost. To do this there has to be a rough estimate on Scope, Time, Quality, Integration and Resources needed to carry out the Project. Here, care should be taken to not go into detail at this stage. The estimate should be a rough order of magnitude – or a ball park estimate [-25% to +50%]. The contract with the sponsor should be favorable to the development cycle.

The deliverables from the SPRINT are:
The Project Plan, which includes
Initial Scope Estimate [WBS / WBS Dictionary]
Initial Time Estimate [with Activity List/Attributes]
Initial Time Estimate [with Activity List/Attributes]
Initial Resource Estimate [Staff Plan / Roles and Responsibility]
Initial Cost Estimate [Cost Baseline]
&
Feasibility and initial Architecture and Configuration Setup

SCOPE ESTIMATION:

1. Scope Planning
   It is a base document which tells us about how to manage the other four processes. It’s a combined outcome of the experience of the scrum master, the organization and the community. There has to be common Scope Planning document in an organization [which can be customized for different projects. This shows how agile PMBOK is - it has room for customization]. This should be created once during the lifetime of the project, and it describes the broader scope of the project.
2. Scope Definition
   According to PMBOK the inputs to the process are

   	Inputs
   1	Scope management plan
   2	Project Charter
   3	Approved change request for iteration
   4	Preliminary scope statement
   5	Organizational process assets

   In Agile where changes are embraced [the product owner is in the team], PMBOK establishes a control mechanism which tries to control and document the changes. This makes PMBOK a bit time consuming. But as PMBOK is configurable, where you can select the sub-process t0 work with. I would suggest by re-defining the “Scope management plan” and “Approved change request for iteration”, as per you convenience [Agility].
   Using these inputs the goal is to use techniques like

   Stakeholder analysis

   Product analysis

   Alternatives identification

   Expert judgement

   to create a Scope statement which has:
   Project Objectives
   Project Scope Description
   Project Requirements
   Project Boundaries
   Project Deliverables
   Project Acceptance Criteria
   Project Constraints
   Project Assumptions
   Initial Project Organization
   as the head points. Again the heads are important, but what goes in can be controlled. Since it only an ball park estimation, we need to see what goes in for the Assumptions and Project Constraints. Also need to clarify the time-lines for the deliverable, Weekly/monthly or as per the sprint duration.

3. Create WBS
   WBS can be created in two ways, either based on Phases [ Project Management | Design | Construction | Testing] or based on Delivery [ Project Management | Software | Hardware | User Documents]. If you’re using Agile Methodology, then it has to be delivery based. It takes all the inputs from the Scope Definition Process and output from the Scope definition to give a Work break Down Structure, WBS Dictionary, Scope Baseline. In the example given below, WBS is broken into iterations- first iteration being PM Docs and architecture setup, followed by iterations based on the users identified.

   SAMPLE WBS [Based on Delivery]

   

4. Scope Control
   Though the Product Owner is part of the team, it does not mean that we don’t need to control the scope. The Scope needs to be controlled if the there is a cost ceiling and the revenues are attached to the time and delivery. Though we don’t need a control board to accept the change request – it can be done immediately after the Sprint, with the consultation of Product owner. In the Estimation Sprint (or Iteration –1), the scope definition is on  broader terms. If there is an Architectural change or there is a change which will change the Scope, Cost or Time by more than 30%, then it should be taken care of in iteration 1 [a backlog will be created with the accepted change for further iterations].  Else, the changes can be taken care of in the respective Iterations.
5. Scope Verification
   Is immediately done by the Product Owner at the end of the iteration. Here, a verification is done on the deliveries of this iteration.

Similarly, there are Processes for Cost, Time and Quality Estimations. Once these Estimations are done, they are put forward to the client for approval. The first iteration happens to bring out the complexities involved in the delivery. Other Iterations are carried out by fixing Cost and time, then by finding what all features or use cases can be delivered in that cost.

Next step will be estimating the Time.
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