What do you do when they start asking for cost per point?
This issue often arrives wrapped in requests that are pure in their intent and seem to be reasonable requests from the business…
How much are we spending each month and how many points are we delivering for that spend?
Since we are now estimating work in User Story Points, we need to be able to determine how much to charge for the work that clients are asking for. So how much does a point cost us?
We need to evaluate the change requests so we can decide which ones to move forward with and which ones to reject. We’re estimating them in User Story Points, which gives us a relative idea of risk, complexity, and effort, but not cost. We need to be able to translate points to dollars so we can understand if the value we’d receive from the change is worth the cost.
I had a student recently who was qetting requests like this from the business, so I asked Agile Coach Troy Lightfoot to join me for a podcast where we could unpack the issues that often come with the cost per point question, the pros and cons of tracking it, and some things to take into account when you formulate your response to the request.
Links from the Podcast
Trying to figure out when you will be ready to ship is incredibly challenging. Many Scrum teams track historic velocity, or story points completed in a Sprint, and then use the average number of points completed per Sprint as a way of making an educated guess as to when they could deliver when they’d expect to deliver a certain number of story points in the future. There are, however, many who feel that this approach is no better than just making a completely random guess, and there is evidence to support the value in taking a different approach.
In this episode of The Reluctant Agilist, Troy Lightfoot explains his approach to Probabilistic Forecasting, what it is, why it matters, and how it is a better way of planning than using a more traditional approach.
Books Recommended In the Podcast
Tools mentioned in the podcast