The Freakonomics of Estimation

The Short and Sweet

  • The purpose of estimation is not really to measure productivity in the traditional sense but rather it is to estimate how much scope can be delivered in a period of time.
  • Story points and poker are a waste of time.
  • Estimation must only be considered in a broader sense as scope is variable from iteration to iteration and even from day to day in order to pursue maximum business value in the face of inherent uncertainty.
  • Estimation is fraught with the potential to create negative incentives an moral hazards. See the Freakonomics of Estimation.
  • Deeply involving the business in the development project removes any skepticism about productivity.
  • Break work down into deliverable chunks on requirement cards that represent one to three days work.
  • Count how many cards get done on average per iteration.
  • Track the average number of new cards per iteration and if they come from splitting of other cards that turned out to be bigger than three days worth of work.

Relevant Agile Manifesto Principles

Agile Manifesto Principle #1 ‘Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.’

Agile Manifesto Principle #2 ‘Welcome changing requirements, even late in development. Agile processes harness change for the customer’s competitive advantage.’

Agile Manifesto Principle #3 ‘Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.’

Agile Manifesto Principle #4 ‘Business people and developers must work together daily throughout the project.’

Agile Manifesto Principle #5 ‘Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done.’

Agile Manifesto Principle #7 ‘Working software is the primary measure of progress.’

Agile Manifesto Principle #8 ‘Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a constant pace indefinitely.’

AgileSweet Economics and Practices

Cards are the primary unit of measuring work.

By breaking cards down to between one to three days worth of work the cards are sufficient. It is not practical or accurate to break tasks down to less than this.

See Also