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57289Re: [scrumdevelopment] How to perform estimation for custom (billable) work

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  • Adam Sroka
    Oct 16, 2013
      The best way to do it is optional scope. Deliver something every sprint. When your customer is happy with what you have delivered they can quit. You should know what it costs to run the team for a sprint. Add your margin to that and you know what you have to charge (To mitigate risk maybe negotiate for a minimum number of sprints and/or add additional margin to cover downtime between projects.) 

      If you need to calculate how many sprints it will take to complete some quantity of work, and you haven't had time to establish a velocity yet, the most realistic way to accomplish that is to look at how long it took you to develop products in the past. Come up with a range based on past performance and assume that it will take similar effort this time. 

      That may seem like an oversimplification, but it has the advantage of being based on something you know. It blows my mind that people think a bunch of small guesses added together are somehow more efficacious than one big guess. At least with the big guess you still have your eye on the ball and aren't bogged down in minutiae. 

      On Thu, Oct 10, 2013 at 4:24 PM, <vilson_a@...> wrote:

      Hello everyone,


      I was wondering if you guys could help me out with this problem. Although I have worked in an Agile environment before, even as an Scrum Master, this is actually the first time I’m working in a company (currently implementing Agile) that does custom (billable) work.

      I am sure most of you have had the opportunity to deal with this situation, and I was wondering how you have worked it out.


      Estimation to price the “project” is currently done in hours, and of course it is a completely unrealistic number. Since I have been a Scrum master before, I am trying to help the Dev Manager figure this out.

      Just to clarify, for regular product roadmap items we do estimate in points (Fibonacci).


      Please let me know if any more detail is required.



      Alex Pereira





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