how to begin?

Last post 07:12 am September 25, 2014
by Ludwig Harsch
6 replies
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01:19 pm September 9, 2014

Hi.

How I can make a budget for a project with SCRUM? ie, it is assumed that time can not be defined since it is made when the project is done, but to quote should be projected over time. What are the steps to make a budget?

Thanks in advance

07:09 pm September 9, 2014

Do you have a product backlog? If so, are you able to define what you think an initial release might consist of? Perhaps you can use this information to make the case for some "seed funding" for an initial 30-day sprint. At the end of the sprint you can demonstrate a potentially shippable increment of the product. You can potentially use this success to justify more funding. I've never had to do this myself, but that's how I'd pitch it.

09:53 am September 10, 2014

Hi aldolavin,

I am not very experienced in Scrum, so my conclusion may very well be doubted. But here is my point of view:

The Scrum Guide says the following about estimates regarding the product-to-be:
1. "Product Backlog items have the attributes of a description, order and estimate."
2. "The Product Owner is responsible for the Product Backlog"
3. "The Development Team is responsible for all estimates."
4. "More precise estimates are made based on the greater clarity and increased detail; the lower the order, the less detail."

So, in my understanding of the Scrum Guide, you could do the following (in addition to mrichman's advice):
1. In agreement with the Business Goal and relevant stakeholders (possibly including the Development Team), the 2. The Product Owner creates a Product Backlog that considers all functionality of the product in question (though on a very high level, without too much detail).
3. The Product Owner asks the Development Team to estimate all Product Backlog Items.
4. The Product Owner communicates the estimates as budget forecast to management, making clear that it is nothing but a forecast as there is way to much uncertainty and risk for a definite budget.
5. As more information becomes available (e.g. as time or the first Sprint go by), the Product Owner updates the Product Backlog, and along with the Product Backlog he updates the estimates of the Product Backlog Items. (Frequent Inspection and Adaptation).

I hope my suggestion is of any help.

When you have managed to get your budget, would you please share your experiences?

Thank you and best regards,
AnotherDotCom.

10:23 pm September 11, 2014

aldolavin,

Your organisation needs to focus on creating value and assigning resources accordingly rather than simply forecasting cost

12:51 pm September 14, 2014

> What are the steps to make a budget?

Ideally, the steps should be to fund a product one increment at a time. Incremental funding is the most applicable model for agile investment, and you should consider it as a first option. However, this is a major shift for organizations that are used to managing capitalized and operational budgets.

02:27 pm September 24, 2014

How to do that? I mean ... I think I understand ... incremental funds ... but how do you do it?

1.-You agree with the client to create a meeting product backlog, which is uncertain.
2.-According to this, the first Sprint Backlog is created, the definition of story points that translate in time, quality, effort = $$? Here you can estimate the cost for the first sprint? Thus, the cost is based on Sprint?

However, many customers do not want to pay for something that is increasing over time, they do not know if have all the money.

I'm thinking more small customers and SMEs.

07:12 am September 25, 2014

Think about it this way: Usually they pay for 18 months to get something they didn't want. Now they pay for 1 month to get something they didn't want, BUT they have the opportunity to give feedback, so after paying the 2nd month the result should be much better, and maybe they don't even need to pay for 18 months, because they are satisfied much earlier.