In this article, I’ll show how using a well-known Agile technique can reduce cost AND increase value for your next software project.
This article is an Executive Briefing. It’s deliberately short for quick consumption. If you need more information, call us on 01752 690 365 or contact us.
What we Currently do
Do you know how much of a software project is spent on requirements gathering, design and planning? According to the seminal work The Mythical Man Month, it’s 33%. One third of your project is spent on thinking, and documenting what you want.
That’s an eye-watering sum made worse by the fact that once the work has been done, it’s worthless! You can’t sell it. It has no value anywhere other than to your organisation who may not even implement it. Put it another way, on a sample project with a £1M budget, we just spent £330,000 on a very expensive document. That’s a huge overhead.
Large cost, Little value
What we Should do
Agile Teams like to concentrate on work that they know is going to be done. They don’t like to waste time documenting something that may never see the light of day, so they don’t.
Instead of creating a huge document, they start with something like a User Story workshop. The idea of this is to create a list of things that are wanted for the product. This list is then ordered based on what is most important to the organisation. This way, the organization’s highest value items get done first.
The items in the list usually consist of a short description of what’s wanted. Items at the top of the list, that are going to be worked on imminently, are more closely inspected and detailed. This way, we only invest time in work we know is going to be done.
User Story workshops usually last only a few days, even for quite complicated projects. The cost of this, especially compared to the traditional approach described above, is tiny.
Little cost. Large value.
A Financial Comparison
Let’s boil this down to real money.
For this simplified comparison, we have a team of nine people and a budget of £1.1M, giving a project duration of about two years. Average salary per person is £60K giving a day rate of £264.32 which is calculated by annual salary / 227 (Days worked per year allowing for personal and public holidays).
Agile Teams spend approximately 10% of their time refining the items on the list and one day per month on planning their work. This equates to an overall 13.3% of their time devoted to requirements gathering, design and planning. The cost of this effort over the term of the project is £146,300 of which £11,894 is overhead (for a five day User Story Workshop).
Traditional software teams would consume 33% of the budget, meaning £366, 300 of which £366, 300 is overhead (the entire requirements gathering, design and planning).
Traditional Approach: Large Cost. Agile Approach: Little Cost
A Chronological Comparison
For a software product, value is realized when the product is delivered.
In traditional development, value would be realized in two years..
In Agile development, value would be potentially realized after 30 days (each Agile Sprint produces a potentially releasable product increment)
Traditional Approach: Value delivered late. Agile Approach: Value delivered early.
Before you embark on your next software project, consider engaging an expert to help you run a User Story Workshop. You’ll increase value and lower costs. Call us on 01752 690 365 or contact us for a chat. We’d love to help you.
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