SCRUM is a popular software building methodology used by IT companies worldwide. Yet many companies encounter difficulties when using SCRUM, but especially when budgeting the work done in SCRUM. Generally budgeting is done with the Time & Material framework when using SCRUM. But combining the frameworks to successfully budget projects is harder than it seems. We’ve learnt that from experience. That’s why we’ve prepared a set of guidelines that can help you in budgeting your projects.
Convincing your CFO to use SCRUM can be quite difficult if the method is presented as work without limited budget and vague scope. It is worth noting though that CFOs and managers are heavily focused on identifying and minimizing risks. That is why it’s essential that each budget is tailored specifically to a given project. Since, requirements and work processes differ from project to project it’s important not to standardize your budgeting.
Here is an example of how a project can be done with SCRUM:
- 10% of the time/effort – collecting requirements and scope
- 85% of the time/effort – analysis, design, development, testing and deploying next versions of the product in cycles of 2-week sprints
- 5% of the time/effort – closing the project
After 60% of time in the SCRUM project we have a working system with the list of features realized in 40-50%. The system has real business value.
Business value is what companies want and SCRUM delivers. Well, planned projects create a smooth workflow in the company and add business value. However, there are some risk which you may be exposed to.
To minimize risk, you can use the following approach:
- Introduce a separate analysis and design a phase to move all the requirements from the „ ambiguous” to „clear” and „moderate changes anticipated”.
- Risks associated with unclear requirements are determined and estimates for them increased several times.
- High priority ambiguous requirements are implemented first so that potential overruns in these areas leave room for maneuver in choosing functions in the following sprints.