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Estimation - Delivering Business Agility without Estimation
The document discusses the concept of business agility, emphasizing the need for organizations to quickly adapt to changes without relying on traditional estimation methods. It critiques conventional estimation, suggesting that relative estimation and understanding flow efficiency are more effective approaches for modern project management. The author advocates for delivering small, independent work items and highlights the importance of reducing wait time over optimizing work time to enhance productivity.
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Estimation - Delivering Business Agility without Estimation
- 1. @sudiptal ESTIMATION: DELIVERING BUSINESS AGILITYWITHOUT ESTIMATION Sudipta Lahiri Headof Engineering and Products, Digite 1
- 2. @sudiptal BusinessAgility ■ Ability ofa business system to rapidly respond to change by adapting its initial stable configuration (https://en.wikipedia.org/wiki/Business_agility) 2
- 3. @sudiptal We preach somepretty “weird” stuff… to achieveAgility! “Projects” is a bad term! No(almost) Estimation! Zero Budgeting! No Managers but “servant-leaders” Don’t allocate work... let people pull their work! Multi-tasking is a bad thing! Tracking utilization is a bad thing! Testers and Developers will collaborate! We will deliver more, faster with lesser planning, estimation...! That’s exactly opposite to what we did all this time! 3
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- 5. @sudiptal Digite’s Business AgilityWebinarSeries ■ Designed to unravel some of these “weird” ideas… ■ Covering topics of Delivery from Estimation => Planning => Forecasting =>Tracking to ■ Covering topics of SDLC from Requirements => Build &Test => Deployment ■ Let’s start by understanding the “starting point…” 5
- 6. @sudiptal Today’s applications arevery different… 6 Deliver with SMALL, INDEPENDENT,TESTABLE work items that have BUSINESSVALUE and allow you get MARKET FEEDBACK… … we need to do this “rapidly”! High degree of quality is assumed.
- 7. @sudiptal ESTIMATION How does estimationfit in this context? 7
- 8. @sudiptal How were Estimatesused? Ideation / Conceptualization Project Planning / Baselining Execution / VarianceTracking Project Completion 8 Estimation Basis1 2 3
- 9. @sudiptal Great intent but… 9 1pm 1.15pm1.3pm 1.52pm 2pm 1.5pm 1.15pm 1pm0.87pm 0.75pm 1.25pm 2.5pm No winner in this process!
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- 12. @sudiptal Great intent but… 12 ? TimeSheet Data Questionable accuracy!
- 13. @sudiptal Net, the “intent”remains an intent! Ideation / Conceptualization Project Planning / Baselining Execution / VarianceTracking Project Completion 13 Estimation Basis1 2 3 Decades of user/customer commitments and revenue forecasting is based on this premise of Estimation
- 14. @sudiptal ESTIMATION: FRESH PERSPECTIVES Let’sdiscuss this next… 14
- 15. @sudiptal Perspective I: Relativevs Absolute Estimate ■ Relative estimation is accurate… Absolute estimation is “highly” inaccurate! 15
- 16. @sudiptal Perspective II: UnderstandingLT distribution LeadTime histograms From Lean Kanban University curriculum… Mode ■ LT Distribution is aWeibull Distribution with a long tail – Mode, Median and Mean are all different – Mean > Median > Mode – Using Mean as a basis for planning the future is simply incorrect, unlike Gaussian distributions 16
- 17. @sudiptal Perspective III: “Howsure are you?” ■ Your boss always knew this… the “gut feel” estimate ■ The “gut feel” has a mathematical basis! ■ When asked for a estimate, always ask: – What level of confidence? ■ It forces business to think! ■ A more aggressive estimate is associated with a lower level confidence % – Giving you more space if the estimate turns out to be inaccurate 17 From Lean Kanban University curriculum… Mode
- 18. @sudiptal Flow efficiency measures thepercentage of total lead time is spent actually adding value (or knowledge) versus waiting Flow efficiency % = Work Time x 100% Lead Time Flow efficiencies of 1- 5% are commonly reported. > 40% is very good! Low Flow Efficiency does not mean people are idle; they are doing other things Often, they have high WIP because they are working on multiple things in parallel 18 Perspective IV: Understanding Flow Efficiency
- 19. @sudiptal Flow efficiency trend ■SwiftKanban Flow efficiency trend chart 19 Realistically, the number = This number/Average User WIP
- 20. @sudiptal Low Flow Efficiency(vs) Estimation ■ If your FE = 25% and your LT = 100 days, it meansWorking time = 25 days! ■ If the cardWorkingTime = 25 days andWaitingTime = 75 days, then… – Spending effort to get greater accuracy in Estimation and conclude thatWorking Time “could be” 20 days or 30 days, is counter-productive – Instead, spend time to identify how you could reduce the 75 daysWaitingTime by 50%.That is far more productive! ■ Remember, we wanted things to get done “rapidly” 20
- 21. @sudiptal What did wecover so far…? ■ The futility of the traditional estimation models…. – Garbage in => Garbage out! ■ The new perspective on Estimation – Relative Estimation – LT distribution => FatTail => Planning based on mean is mathematically wrong – Always ask the question – what confidence % do you want with the estimate? – Understanding low Flow Efficiency systems 21
- 22. @sudiptal WHAT ISTHE PATH FORWARD? Differentscenarios; different approaches… 22
- 23. @sudiptal Approach I:Velocity basedtracking! ■ Simple, fast, cute! – No guesses – Enough to predict date, team size, effort! ■ Critical success factors: Stable System – Full backlog (a Story Map)! – Small, independent stories that are getting completed and delivered quickly – Dependencies are a disaster – Unstable team => normalized velocity per person! 23
- 24. @sudiptal Approach II: ForecastCompletion dates 24 19-May-2019 Due Date Forecast Date ■ LeadTime histograms From Lean Kanban University curriculum… Mode ■ Simple, fast, cute! – No guess; Predict date – not team size/effort ■ Critical success factors: Stable Conditions – LowWIP; Dependencies are a disaster – Small, independent stories delivered quickly
- 25. @sudiptal Big bang initiatives ■Large projects, large enhancements ■ Use Approach I ■ Forecast effort, duration based on Velocity – Associated to a confidence % – Build a Story Map to get the full backlog (starting point) Continuous flow of items ■ Production Support, Maintenance Tickets ■ Use Approach II ■ Forecast Completion Date based on past LT distribution – Associated to a confidence % – Almost zero effort, instantaneous 25 Two key scenarios
- 26. @sudiptal Game Changer: Askingthe right question From “When can I get it” To “When do you need it” 26
- 27. @sudiptal Game Changer: DemandShaping ■ Demand > Supply, for most of us! ■ If Forecast Date < Due Date, then: – Don’t spend bandwidth now on this; work on another high priority item… maximize Opportunity potential! 27 19-May-2019 Due Date Forecast Date ■ If Forecast Date > Due Date, then highlight the RISK on the Board
- 28. @sudiptal The “visible” anti-patterns! ■8hrs/Story Point! ■ Variance tracking = Baseline Story Points – Actual Story Points 28
- 29. @sudiptal In closing… ■ Modernday applications need to be delivered with small, independent work items that can be delivered fast and allow you to collect market feedback – We cannot predict anymore what will work in the market ■ Estimation is at the heart of many planning and execution “ills” – It is waste; keep it simple and do it as little and as fast as you can ■ Low Flow Efficiency systems:Value in reducing “WaitTime” than to predict (and optimize) “Work time” ■ UseVelocity to forecast big scope work that is broken into small, independent work items; use Lead Time distributions to forecast one independent work item! ■ We have covered the why and how of Agile Requirements and Estimation – In subsequent webinars, we cover how Planning, Forecasting and Execution have undergone a radical change to build modern day systems… and how you can sell this to your Leadership! 29
- 30. @sudiptal ■ Reach meat: – @sudiptal – slahiri@digite.com – lahiri.sudipta@gmail.com THANK YOU! 30 “Absorb what is useful, discard what is useless and add what is specifically your own” Bruce Lee