The next piece of software is to be developed as quickly as possible by two teams and they now have to answer how long it’s going to take. Team A says 5-8 months and Team B 6-9 months. But the department head is under pressure to give a date. He decides to simply take 7 months as the average of the two teams and so the rest of the project plan ends up based on averages. Basing on the book "The Flaw of Averages," this presentation explains why average-based plans fail on average and provides a way to avoid this trap at least when it comes to software development estimates.

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The Trap of
Averages
How to avoid it in
software development
estimates
Rome
March 22-23, 2019
By Daiany Palacios

2. #CodemotionRome19 @DaianyMargarita
Daiany
Palacios
System Analyst
KN FreightNet
daiany-palacios.com
linkedin.com/in/daiany-palacios

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Your head may be on a freezer and
your feet in an owen...
but on average you are fine

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It‘s just not accurate

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Let‘s take the real estate example...
An average house
price is...

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...just not accurate

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Still, many plans in the world are based
on average values

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not the exception
Software
development
plans are

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Team A
Team BSoftware House

11. Ralph, the Project Manager takes the
average estimate
of the two teams
#CodemotionRome19 @DaianyMargarita

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It‘s just
not
accurate

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15. Whenever an average is used to
represent an uncertain quantity, it
disturbs the results because
it ignores the impact of the inevitable
variations
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16. We need to act on a
distribution
rather than on
single
values
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Many programs can
simulate uncertainty

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For this we use the
Monte Carlo Simulation

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Here is how it works
1 2 3 4
Input

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With 85% of probability we will be ready by
Feb 25th or earlier
It’s a probabilistic forecast

21. We need to think
probabilistically
and not
deterministically
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22. #ContinuousForecasting
#CodemotionRome19 @DaianyMargarita
https://xkcd.com/612/

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Some
important
facts
for the whole thing to work...

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The Flow
of the development process…
…needs to be well
taken care of

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Predictability
is more important…
…than the pure
speed of delivery

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“Our ability to accurately and reliably answer
customers’ question “when it will be done?”
is the true measure of predictability”
By @danvacanti

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What are the
Benefits
#Continuous
Forecasting

28. #ContinuousForecasting
does not mean
#NoEstimates
for us
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We avoid
the trap of
averages
We provide a
more realistic
forecast
We reduce
the waste
of time
We keep a
better eye on
the course of
the team
Some benefits we have from
#ContinuousForecasting

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Time to
Wrap Up

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The Trap of Averages
How to avoid it in software development estimates
04
03
02
WHAT IS THE PROBLEM?
Plans based on average fail on average, because they ignore the impact of variations.
Well-considered projects are doomed to disappointing results.
01
Designed by PresentationGO.com
WHAT TO DO?
Act on a distribution of values and their likelihood of happening, instead of using
single values (an average).
HOW TO DO THAT?
Use a Monte Carlo Simulation for a probabilistic forecast based on historical data.
Adopt a Continuous Forecasting strategy.
WHAT ARE THE BENEFITS?
Chances of hitting the estimated date are increased. Waste of time is reduced.
The team can use its precious time to build awesome things instead!

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Averages are a
trap…
… and now you
know how to avoid it
When estimating, remember…

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Thank
you!
daiany-palacios.com
linkedin.com/in/daiany-palacios