Introduction

The quality of a project is dictated by three factors: scope, budget, and time

The combination of these factors is called: Project Management Triangle

Up to the manager to to achieve a proper trade-off

"Good, cheap, and fast. Pick two!"

Triple Constraint

Las class we discussed scope

This class will discuss time and cost

Time Management

The first 90% of the code accounts for the first 90% of the development time.

The other 10% of the code accounts for the other 90% of the development time.

 Tom Cargill, Bell Labs

Time Management

Time is often the variable that has the least amount of flexibility

Many projects have hard due dates: Christmas, Tax season, Competition, Contracts, etc.

Poor time management can also lead to extra costs

Time Management

After a scope has been determined, focus switches to the order in which activities are carried out

A number of tools have been developed over the years such as Gantt Charts and PERT Charts (Network Diagrams)

These tools help determine the order, dependencies, and how long a project will take

Dependencies

Dependencies (or relationships) dictate the logical sequencing of project activities

A clear understanding of dependencies is requried to build proper charts and diagrams

“Begin at the beginning," the King said, very gravely, "and go on till you come to the end: then stop.”

Dependencies Examples

Wireframing depends on Requirement Gathering

Front-end Development depends on Wireframing

Back-end Development depends on server setup*

Testing and Deployment depends on CI

Types of Dependencies

There are three types of dependencies:

→ Mandatory dependencies hard logic

→ Discretionary dependencies are agreed upon

→ External dependencies regards non-project activities

Gantt Charts

List project activities vs their start and finish dates

The Critical Path determines the earliest completion of a project

The more activities are in this path, the harder it is to make a proper prediction

Gantt Charts

Network Diagrams

Network diagrams can show dependency relationships

The Program Evaluation and Review Technique, PERT, is the most popular network diagram

PERT Charts

Each milestone is represented as a node

Tasks connecting milestones are shown as arrows

Following arrows allow one to follow dependencies

Each arrow has up to three timestamps: optimistic time, most likely time, and pessimistic time

PERT Charts

What is Cost?

“Resource sacrificed or foregone to achieve a specific objective ”

“simply put: money”

Cost Management

After estimating scope and timeline, a cost analysis is required to start up a project

Costs come from multiple sources: personnel, equipment, real state, licenses, etc.

In what follows we will cover Cost Estimation Techniques and Budgeting in Scrum

Cost Estimation Techniques

Top-down Uses similar projects as basis

Bottom-Up Uses the WBS as a basis

Parametric Uses metrics such as cost of line of code

Estimation Problems

Quick Estimation Rushed to meet deadlines

Lack of Experience Most devs are not accountants

Biases Leading to underestimation

Definitions

Profit   revenue - expenditures

ROI   ratio by which revenue exceeds investment

Cost Overrun how much actual costs exceed estimates

Budgeting in Scrum

The Product Owner is reponsible for budgeting

Two main components:

  Personnel costs: team

  Fixed costs: hardware, software, infrastructure

Budgeting in Scrum

For personel costs, it is best to get the cost per sprint

Each member has a daily rate and an allocation rate

daily rate × allocation rate = daily burn rate

daily burn rate × number of days = sprint burn rate

Total sprint cost: sum of the cost of all members

Budgeting in Scrum

Let's assume that we have three developers

Each developer has a daily rate (for weekdays), which can be calculated as annual salary/260

Each developer has its own allocation rate between different projects

Each sprint takes two weeks (10 weekdays)

Budgeting in Scrum

Budgeting in Scrum

If the project is expected to last for a total of 6 sprints:

Total Personnel cost: 10,000 * 6 = 60,000

If fixed costs are 20,000...

Total Cost: 80,000

Budgeting in Scrum

It is always good to have a 10% - 15% contingency

For the example, this would result in: 80,000 * 10/100 = 8,000 in contigency

Total Cost (including contigency): 88,000

Budget overruns should be reported early