how_do_i_convert_points_and_velocity_to_dollars
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| how_do_i_convert_points_and_velocity_to_dollars [2016/10/03 10:49] – [Benefits of Using This Approach] hpsamios | how_do_i_convert_points_and_velocity_to_dollars [2020/06/10 12:44] (current) – ↷ Links adapted because of a move operation hans | ||
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| ====== How Do I Convert Points and Velocity to Dollars? ====== | ====== How Do I Convert Points and Velocity to Dollars? ====== | ||
| - | Or "How do I figure out how much I've spent on something?" | + | > Or "How do I figure out how much I've spent on something?" |
| - | + | > Or "Do we still need to track time in a time tracking system for progress reporting?" | |
| - | Or "Do we still need to track time in a time tracking system for progress reporting?" | + | |
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| - | ====== Premise ====== | + | |
| One base idea with agile to focus on completion of work rather than the effort it takes to get the work done. So, for example, we track the remaining work on a story rather than the counting the number of hours we spent on a story. This makes sense because while the effort might be interesting, | One base idea with agile to focus on completion of work rather than the effort it takes to get the work done. So, for example, we track the remaining work on a story rather than the counting the number of hours we spent on a story. This makes sense because while the effort might be interesting, | ||
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| In other words we determine the cost by proportioning the work associated with the thing we are interested in (here epic_or_feature) over the burdened cost of the team. | In other words we determine the cost by proportioning the work associated with the thing we are interested in (here epic_or_feature) over the burdened cost of the team. | ||
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| + | The burdened cost of a Team allows us to factor in things like different labor rates in the different countries if that is important to the organization. | ||
| ====== Benefits of Using This Approach ====== | ====== Benefits of Using This Approach ====== | ||
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| * Does not require additional reporting (“oh the UI is so simple everyone can do it” is just another road bump for people who should be focusing on producing value) | * Does not require additional reporting (“oh the UI is so simple everyone can do it” is just another road bump for people who should be focusing on producing value) | ||
| - | In reality, if the work is large enough you’ll find an close enough approximation by simply counting the number of user stories in an epic as you do the work and proportioning the cost of the team that way (law of large numbers takes over - see [[blog:do_we_need_points_to_generate_a_release_burn-up_chart|Do We Need Points To Generate a Release Burn-up Chart?]] for more on this thinking). In the same way I expect you’ll eventually find that if you do to proportioning of cost via hours, you end up with pretty close to the same result as points. Many argue that ratios of points produce a better result than hours since it is more complete and both the people doing the work and the managers of that work talk about the same thing. | + | In reality, if the work is large enough you’ll find an close enough approximation by simply counting the number of user stories in an epic as you do the work and proportioning the cost of the team that way (law of large numbers takes over - see [[do_we_need_points_to_generate_a_release_burn-up_chart|Do We Need Points To Generate a Release Burn-up Chart?]] for more on this thinking). In the same way I expect you’ll eventually find that if you do to proportioning of cost via hours, you end up with pretty close to the same result as points. Many argue that ratios of points produce a better result than hours since it is more complete and both the people doing the work and the managers of that work talk about the same thing. |
| You can also come up with a "cost / point" calculation based on team velocity and cost (eg For a quarter, divide the total cost of the team by the total points completed by the team, (including Product Owner, Scrum Master, team members and the appropriate percentage of part-time contributor salaries). You now have the “cost per point”). Some will find this useful for looking ahead when estimates are required for projects, for example. | You can also come up with a "cost / point" calculation based on team velocity and cost (eg For a quarter, divide the total cost of the team by the total points completed by the team, (including Product Owner, Scrum Master, team members and the appropriate percentage of part-time contributor salaries). You now have the “cost per point”). Some will find this useful for looking ahead when estimates are required for projects, for example. | ||
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| * Easily come up with ranges that represent future probability. For example you could say "if I do this work at my minimum velocity which represents a 90% probability that I will get it done, then the cost / date will be X while if I do this work at my average velocity which represents a 50% probability that I will get it done, then the cost / date will be Y". Plans can then be evaluated based on these probabilities. | * Easily come up with ranges that represent future probability. For example you could say "if I do this work at my minimum velocity which represents a 90% probability that I will get it done, then the cost / date will be X while if I do this work at my average velocity which represents a 50% probability that I will get it done, then the cost / date will be Y". Plans can then be evaluated based on these probabilities. | ||
| - | {{page> | + | {{page> |
| {{tag> | {{tag> | ||
| - | ~~LINKBACK~~ | + | |
| - | ~~DISCUSSION~~ | + | |
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