I also have the same questions earlier, how the budget can be predicted in Agile. You may not be able to accurately estimate the efforts and resources required. It will be good to see the replies. Saving Changes...
Agile budgeting can inly support top-down estimation. It cannot be exact. Saving Changes...
Alistair DuguidTechnical Delivery Manager| Informatica CorporationShelton, Ct, United States
But then again, very little in budgeting can be exact, agile or not! Saving Changes...
Humberto RamosPM Consultant| NSNMéxico D.F., Distrito Federal, Mexico
Some say that scope is not pre-defined in agile, but it is defined by the amount of committed budget. Agile or not, budget needs to be defined from the start, unless the money owner agrees to budget a percentage of business sales (with no end date defined).
With what basis such an undefined budget may be committed, with no clear ROI?, It is not a matter of training the Budget owner in agile, because if such were the case, then financial market should be trained as well. Financially you need to define a benefit target (Scope vs Cost) so to invest diligently the owner/company/stakeholder money.
At the end of the day, budgeting, managing, monitoring and controlling follow similar paths:
In water fall project the sequence is:
- I hand you may expectations
- You translate them into high level requirements and ask money for them (project charter)
- We fight
- We compromise (we signoff the charter)
- You decompose high level requirements into detailed baseline; (Project charter update, we fight, we compromise, new signoff)
- You manage the project (get what we agree with the money agreed)
- We supervise closely budget consumption vs scope achievement
- Budget changes are possible under a reasonable amount (contingencies reserves)
In Agile:
- I hand you may expectations
- You translate them into Sprints (black boxes of scope) and define a Budget
- We fight
- We compromise (some sort of budget and scope agreement and signoff)
- You manage the project (get what we agree with the money we agree)
- We supervise closely budget consumption vs scope achievement
- Budget changes are possible under a reasonable amount (contingencies reserves)
Scrum masters please correct me where I may be wrong…
Saving Changes...
As more and more stories are finished upto customer satisfaction, the budget cannot be accurate or final. That is the beauty of Agile. So, in short we can have some money set aside for the project but cannot be final. Saving Changes...
