Agile 101: Estimating Cost/Time

Tom Mochal, PgMP, PMP, TSPM is the president of TenStep, Inc., a methodology development, consulting and training company. Tom won the Distinguished Contribution Award from the Project Management Institute for his work spreading knowledge of project management around the world. He is a speaker, lecturer, instructor and consultant to companies and organizations around the world.

  Agile   Estimating   Scrum   Stakeholder Management   ProjectsAtWork  

You can do better than subscribing to the slam that you only know an Agile project is complete when the budget is gone. After some initial assumptions, you can determine estimated duration and cost of your project within a couple iterations — an estimate that becomes more accurate as velocity is established.

Agile projects tend to be exploratory rather than predictive. The requirements and expectations of the Agile project are uncovered over time rather than understood all at once. This leads to more initial uncertainty in the estimated project cost and duration.    

On the other hand, your managers and sponsors still want to have some idea of the size and scale of the entire Agile project. For example, it makes sense that they would want to know whether the project will be completed in eight months or two years, and whether it costs $100,000 or $1,000,000.   

The Agile team has some disadvantages in this area versus a traditional project team. The traditional team would spend more time in a planning process and more time understanding the requirements up front. The Agile team is more focused on execution. Nevertheless, it is still possible to provide some guidance on estimated cost and duration.

Business Planning and the Business Case

Before a project starts, there is some up-front planning that needs to take place from a …

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