Agile estimation is the process of evaluating the required effort to complete a work item. Emerging in the development field, the practice of weighing work is now widely applied among Agile teams.
The Agile philosophy is a collection of values and principles designed to help manage work more efficiently. In the broad sense of Agile, estimation refers to expert opinions about when a piece of work can be completed based on its complexity. The term “Agile estimation” gained popularity in software development, and it is used to quantify the duration of a given development work item.
Let's discuss how estimation is managed in an Agile environment, the good and bad sides of estimation, and some of the widely used techniques.
The Agile way to work management is focused on customer satisfaction, adaptability, and frequent value delivery. To comply with the 12 principles of Agile project management, teams reach out to various methodologies and frameworks to help them streamline work processes, improve their flexibility and deliver quality value faster. A cornerstone of this mission is the ability to determine how long work would take before value can be delivered to the customer.
Agile methodologies/frameworks such as Scrum use story points based on past team velocity to estimate the required effort for completing user stories in a team’s product backlog. Methods such as Kanban, on the other hand, rely on historical workflow data to create probabilistic outcomes for the duration of single or multiple work items.
Agile teams tend to take a one-dimensional approach when it comes to estimating work’s duration. Properly sized work items help Scrum teams, for instance, prioritize the next iteration and plan their capacity better. To arrive at those estimates, development teams use various techniques.
Estimates can help break down, plan and prioritize work and ultimately improve the efficiency of managing Agile projects. Proper work sizing can be beneficial to project management in various ways.
The Agile philosophy is rooted in the ability to adapt and spread agility across organizational levels. Weighing the work is a critical step in that mission which, if not addressed adequately, can easily turn into a pain point in Agile project management.
Estimating is a team activity. Every team member should be involved in the work estimation process. Let's not forget that Agile proclaims collaboration, communication, and feedback on all levels as the path for delivering value with increased quality and at a fast pace.
Estimating a project's duration accurately is an important step toward better coordination between departments and teams, work prioritization, and better planning (at least initially). However, today's hectic market demands more reliable approaches to work estimation. As such, forecasting techniques are often used by Agile teams to obtain data-driven insights on how to improve and manage risks in a more efficient manner.
This is the philosophy that a data-driven method such as Kanban promotes. Let’s uncover how Agile managers can narrow down the duration of work initiatives with Kanban in practice.
The Kanban method of work management is rooted in the Lean and Agile management ways. At its core lie the people, learning, and continuous improvement. The Kanban adaptive approach relies on practical techniques for forecasting the completion of work such as workflow data. As a result, Kanban project leaders manage to account for the volatility and uncertainty of today’s business environment.
The Kanban method allows managers to use specialized tools to forecast the expected duration of various work pieces by collecting historical data about cycle time and throughput for specific work types.
The first step to do that in Kanban is to stabilize the flow of work. One of the key prerequisites to creating a stable workflow is understanding how teams handle the incoming and completed work and trying to match the “arrivals” and “departures” in your process.
To do this in practice, Kanban teams map their workflows on Kanban boards and use WIP (work in progress) limits to create a pull system. Eventually, they aim to continuously optimize that system so they can align work demand with actual capabilities and create a stable flow of work.
To monitor and analyze your workflow, the Cumulative Flow Diagram, for example, is an invaluable chart where Kanban teams can track the most important metrics of their flow - cycle time, throughput, and WIP.
Cumulative Flow Diagram (CFD)
By applying those and other practices, Kanban teams can make their workflows more predictable. The accumulated workflow data can be then integrated within tools such as Monte Carlo Simulations to move to forecasting based on probabilities for work delivery. With Monte Carlo simulations, for instance, you can answer how many work items your team could complete for a specified time period. Or, get a realistic forecast about when a given amount of work items can be finished.
The analytics tools in Kanbanize, for example, use real data, so various uncertainties and risks are also accounted for.
Monte Carlo When simulation in Kanbanize
The process of evaluating the required effort to finish a specific work item, also known as estimation, can be achieved using a variety of approaches derived from the various Agile methods. Agile teams employ different estimating techniques such as:
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