Dividing Development cost into different budgets

Last post 06:57 pm August 19, 2021
by Daniel Wilhite
2 replies
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09:06 pm August 18, 2021

Hi all,

I’m facing a challenge and I need a piece of advice.
We have a scrum team that is responsible for an integration layer. To simplify, the integration layer is connecting stakeholders' systems instead of direct systems connection.

Each connection is divided into user stories based on the requirements. The cost of the integration development for each connection is deducted from the correspondent client budget.

The suggested solutions are not accurate and not according to the scrum principles:
Solution 1: Ask the development team to register the hours spent on each user story.
Solution 2: Calculate a price for user story point. To simplify, I create the following example:
A Sprint with 10 user story points, the development team costs 100 euros per Sprint, Therefore, the story point is 100 / 10 = 10 euros.

How can we find the accurate cost without ruing the scrum way of working? Knowing that user stories from different clients are picked up in the same Sprint.
 

09:40 pm August 18, 2021

We have a scrum team that is responsible for an integration layer

Why just a layer? How do they then create a Done and feature-complete increment every Sprint?

How can we find the accurate cost without ruing the scrum way of working?

By having a Product Owner who understands and accounts for value. Costs are just one of many factors he or she is likely to consider. A good PO will take care not to fall into the trap of knowing the price of everything and the value of nothing.

06:57 pm August 19, 2021

Joining in with @Ian Mitchell, you have left off a very good third option. 

Solution 3: calculate a cost based on the value placed on each item by the customer.  Then they have the ability to directly influence how much they choose to spend and you can forecast how much of their items you could deliver given the money that they are willing to spend.   Your Scrum Teams are then challenged to produce the most value in the most efficient ways without sacrificing quality. 

This method will actually help the customers to appreciate the work more. If you deliver the value they want in a reliable, timely fashion they will also be more likely to see reasons to spend more money with you. 

Your two solutions are based upon the development team making guesses about how much work they can do that will satisfy the customer.  My options places the emphasis on the customer providing insight into what they value most and allows your team to focus on those items.