In many organisations, planning has become an end in itself, the accumulation of Points the driving force. More and more time is being spent wrangling over estimates, and for what? Plans aren’t becoming more accurate, reliable or valuable. The first step is admitting we have a problem. We’ll explore some good (and not so good) reasons to estimate and plan. We’ll talk about the limitations and common abuses of the Story Points / Velocity approach. I’ll then introduce you to a more powerful, reliable and nuanced approach to forecasting your future progress with Monte Carlo simulation. You’ll have a better idea of where you’re headed, and you can even retire your planning poker cards and leave long estimation sessions behind.

1. Agile Estimation and Planning
(that doesn’t suck)
Craig Drayton
@craigdrayton

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Why are we estimating again?
So we can monitor deviations from the
planned scope and schedule?
So we can measure performance,
and hold people to account?

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Agile
planning
has gone
horribly
wrong.

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Two genuinely useful reasons to forecast
Make investment decisions
Based on our best estimates of value, cost and risk,
should we do this thing? When should we do it?
Meet date expectations
Are we likely to deliver by a date that matters to us?
If I find out that we’re not, I can take action.

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Estimation and forecasting:
The least interesting thing about building a product
Do you practice incremental delivery -
you’re working on small batches in iterative cycles,
maximising feedback while limiting cost and risk?
Do you have modern Product Management practice -
you’re driven by outcome (not output), and you’re
prototyping and experimenting to discover what works?
… well, just keep doing that!

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Oh, you’re still here?
If estimating cost and forecasting delivery dates
is important to you, there’s good news…
… there are ways to do it that don’t suck.

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What is forecasting, anyway?
Forecasting is using past data,
to calculate the likelihood of future outcomes,
assuming that the future looks like the past.
The most popular agile forecasting method today:
Estimating in Story Points,
Forecasting based on Velocity.

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What’s wrong with velocity?
Average October day in Melbourne:
Cloudy, light winds, high of 19.7°
4 October 2016 in Melbourne:

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Monte Carlo Simulation
1. Start recording the time that you
complete each work item.
1. Calculate how much time passed between each
successive completion (‘Takt time’)
1. Marvel at your newfound ability to predict the future

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Monte Carlo Simulation
4. Simulate your progress through your backlog.
NOW
Backlog
18 Days

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Monte Carlo Simulation
5. Do this thousands of times.
NOW
18 Days
15 Days
21 Days
18 Days
20 Days

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Monte Carlo Simulation
5. Calculate the proportion of simulation runs that finish
on or before each date.
This is the probability of completion by that date.

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But what about estimation??

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Do all my stories need
to be the same size?

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Know why you’re forecasting.
Misuse of forecasting is harmful.
If you forecast using an average value,
you’ll be wrong half of the time.
Forecasting only works if your
future is similar to your past.
Key takeaways

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OK, how do I get started?
People have built spreadsheets that do the math &
simulation for you:
● https://goo.gl/EaJjFr
● http://bit.ly/SimResources
Or, talk to me about getting a free beta account with Mazzlo,
a predictive analytics and forecasting app for agile delivery.
craig@mazzlo.co

18. elabor8.com.au
Thank you!