Seeking the exact answers

“No battle plan survives contact with the enemy.”
— Helmuth von Moltke

Sooner or later you will have the business asking questions like “How much is it going to cost?”, “What will I get?” and “When can I have it?”.  The honest answer to this which often provokes a reaction of surprise are: “How much do you want to spend?”, “Tell us what you want” and “As long as it takes” respectively.

Technology projects are complex and high risk, and in particular there is high uncertainty especially before any actual development taking place.  The Cone of Uncertainty [McConnell] describes the uncertainty in estimates of software development project cost, effort, and duration, throughout the lifecycle of a project.   The degree of uncertainty is very large at the beginning of the project, which is often when decisions are made about project pricing and contracts which results in unrealistic project plans and expectations.

Agile or traditional, estimates on duration and costs are inherently very vague at the beginning of a project.  For some complex projects, this uncertainty can last much later in the development process.

We are so accustomed to fixed price, time & cost projects, but in reality they are anything but.  None of this information is new.  However, project sponsors consistently latch on to the initial estimates project managers propose for the schedule and cost of a project at the start when the least is known and when there is the highest variability.  And because project sponsors don’t understand project complexity and other factors influencing cost and schedule when requirements change and emerge, they may see the project as a failure if costs increased, even if the changes improved the value delivered to the business.  Unfortunately, business executives’ lack of understanding about project management influences their perception of IT project success and failure [CIO].

There is inherent uncertainty, even in well-run projects.  This is especially true in projects that involve complex software, large systems, large development effort, new application domains, new users.  Furthermore, unlike manufacturing or building a house software development is a creative process and largely knowledge work which does not fit a cookie cutter model.  We need to recognize that the Cone of Uncertainty implies substantial risks for traditional fixed-price and fixed-scope projects.  The Cone of Uncertainty indicates we cannot predict the future accurately and that we need to restrain from traditional thinking.  If you can’t predict the future, don’t plan it in detail.

A barrier to agile is the lack of the comforting predictive detailed plan whereby we plan out the uncertainty in a project, plot the path, determine the end date and the cost then produce the nice reports along the way.  Interestingly enough whenever we question “are those plans ever right?”  the response is often negative.  Yet we place so much faith in them and they absolutely have to be there because it would be too scary to proceed without one.

Agile practitioners will do an order of less magnitude less effort to come up with a plan and provide answers to the questions “How much is it going to cost?”, “What will I get?” and “When can I have it?” that are just as good and just as inaccurate as traditional approaches.

We strive to ask for exact answers when exact answers don’t exist (estimates are just an approximate judgment or calculation – it’s a guess, but we seem to forget that).    Reality will come to light soon enough.  Striving for exact answers typically results in both time and money being wasted with little improvement in accuracy of the estimates to show for it.

An agile project will come up with a baseline view of how much the project will cost and when it is likely to be finished.  The only difference to traditional thinking is that agile is very explicit right from the start that this is not accurate and the team will strive to understand more as soon as we start working it.  We want to get to the actual development effort where we regularly deliver high quality, working software that maximizes the business’ ROI.

There is an amazing feeling of relief when agile teams can become comfortable with uncertainty and a freedom to actually discover what is needed at the appropriate time.  Instead of relentlessly following the pre-defined plan agile teams will adapt to the inevitably changing conditions.

Being on time, on budget and to specification means nothing when we have delivered the wrong product with low quality that has no business value.

So rather seeking the exact answers, should we be asking if we are delivering business value?

This entry was posted in Lean-Agile, Project Management and tagged , , , . Bookmark the permalink.

2 Responses to Seeking the exact answers

  1. PM Hut says:

    Hi Chris,

    Your statement “Technology projects are high risk…” provoked me into thinking that why are they high risk in the first place, and when did they become high risk? How come that before we didn’t have Agile, and Software used to be out on time, on scope, and on budget, and only a few people were working on the whole project. Something has changed since then…

    In any case, I think your post is excellent and I would like to republish it on PM Hut ( http://www.pmhut.com ). Please either email me or contact me through the “Contact Us” form in case you’re OK with this.

    • Chris Chan says:

      Using the banking industry, one indication that Rob Thomsett has provided that may provide an explanation to why projects are high risk is that banking technology lasted an average of four years in the 1960s, 70s, and 80s, modern organizations are deploying new products in under three months. In addition to this rapid technology and business change, the number and complexity of the systems have grown. We also integrating legacy systems with newer systems.

      More than happy for you to repost. Thanks for sharing.

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