the 100k proposition
DESCRIPTION
A while back a client asked me to help him persuade a development team to pay for my coaching out of their budget, and to show them why it might be worth doing. It turned out that they trusted me enough that I didn't need to persuade them (and I didn't cost them £100k either!) but the challenge stuck with me, and this is the presentation I made as a result. It also serves as a note of the kind of financial benefit you can get from doing Agile well.TRANSCRIPT
The 100k Proposition
Liz KeoghApril 2011
Meet the Team
PM Analyst Tester
Developers
Assumed Costs per Day
£700
£350
The Team’s Budget
£800kover
1 year
The Team’s Scope
4 features every 2 weeks
(80 features)
Quality
75% of features are used
10% of timeis bugfixing
Quality
A bug takes ½ day on average
Each week, 4 devs fix 8 bugs
Over the project, devs fix 320 bugs
The Goal
To show how Agile trainingfor a new team
can pay for itselfby reducing the costof an £800k project
by £100k.Coach
Descoping a feature
Hmm! They won’t really need that.
Descoping a feature
Each feature takes 1 dev 10 daysand 1 tester 2 ½ days
Saving:12 ½ x £350 = £4375
Descoping a feature
If we get 50% of unused features out
Saving:12.5% of £800k = £100k
Done!
That was easy!
Can we do it without
descoping?
The Goal
To show how Agile trainingfor a new team
can pay for itselfby reducing the cost
of the projectwithout reducing
the scope.Coach
Finding a bug earlyOops! We
found a bug!
Oops! Let me fix that…
Finding a bug early
Now:
½ hour = £25
In 2 months:
½ day = £175
Saving: £150 per bug
Finding a bug early
If we do it for ½ the bugs,saving over the project
½ x £150 x 320 = £24,000
Increasing code quality by 25%
This is much
better!Do I get to do
something new then?
Increasing code quality by 25%
4 dev days per week -> 3½ tester day per week -> ¼(fewer bugs to write up too)
Saving: £436.50 per week
If this happens ½ way through the project:
Saving: £8730
Increasing code quality by 25%Hold on. We take ½ hour now, not ½
day!
For ½ the bugs…
Cheat. You can’t count it twice!
Increasing code quality by 25%
4 dev days per week -> 3 (x ½ the bugs)2 dev hours per week -> 1 ½ (x ½ the bugs)½ tester day per week -> ¼
Saving for ½ the project: £5,730
Co-location and collaboration
If you could do the same project again with the same people and the
same requirements and technologies, how long
would it take?
Co-location and collaboration
At least 60% of a project is learning.
Co-location and collaboration
Increasing the rate of learning by 10% (really 20% but not counting other things twice) = 60% x 10% x 800k
Saving: £48,000
Co-location and collaboration
Co-location isimpossible
here!
That’s a shame. Let’s look at some other practices…
Learning comes mostly from
Co-location 50% £24,000Stand-ups 17% £8,000Retrospectives 17% £8,000Breaking down stories 8% £4,000Showcases 8% £4,000
Saving without co-location: £24,000
Late Change in RequirementsTime taken to agree change and update documentationreduced from 1 day to 1 hour
10% of analysis needs changing
6 hours x £50 x 10% x 200 days
Saving: £6,000
Automated testsThe cost of testing goes
up linearly as the code grows.
Automated tests
Cost of developers helping with automated tests at 1 day every 2 weeks: £7000
Not needing to hire another tester in the last ¼ of the project: £17,500
Saving: £10,500
Motivation and effectiveness
I get to see my work working!
I get feedback on mine!
More time exploring, less time writing bug reports!
Motivation and Effectiveness
If motivation makes teamonly 4% more effective
Saving: £32,000
Practices Total earnedFinding bugs early £24,000Increasing code quality £5,730Learning practices £24,000Changes in requirements £6,000Automated testing £10,700Motivation & effectiveness
£32,000
Total £102,430
Done!Done!
The numbers provided here are fairly conservative, and these are just
some of the benefits Agile can offer.
The Real Benefit
The real benefit of Agile over Waterfall happens when we showcase or release, and find out we did the wrong thing.
Ideally, we’re only wrong by 2 weeks, instead of 1 year.
The Real BenefitOr, we get to release early, and start getting benefit from the right thing.
That means 6 months extra of earning money from the early release.
Either way, that’s a lot of cash.
Agile.Why wouldn’t you do it?