Estimates are never wrong! Reduce the cost of delay than trying to right the estimates.

Estimates are just that, estimates. They are never wrong and never right! Many teams get into the trap of getting the right estimates. In the process of getting the right estimates, they lose the focus on the product vision. This can reduce

  • The effectiveness of the team leading to higher Cost of Delay(CoD)
  • The efficiency of the team leading to higher cost of production 

If the teams don't build the right product, they end up increasing 

  • Cost of rework
  • Cost of relearning 
  • Sunk cost 
  • Opportunity cost

The cost of delay is much more than not getting estimates right. Higher the cost of delay, lower the revenues and lower the ROI. Lower ROI can lead to unhappy work environments, chasing cost reductions and loss of brand image. Scrum is well suited to reduce the cost of delay through incremental delivery. 

ROI also depends on efficient ways of working. Wastes in Product Development can significantly reduce the ROI even if the revenues are higher. Scrum provides a cadence for teams to take a step back, reflect on ways of working to reduce cost of production as well. All in all Scrum is well designed to increase the ROI for the organizations by helping teams to reduce both Cost of Delay and Cost of Production.

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Outline/structure of the Session

This session focuses on highlighting how Scrum helps increase ROI through a game. The tentative agenda is:

  • Discussion on Complex and Adaptive Systems using Cynefin Model.
  • Learn about different contracting models applicable for Complex projects.
  • Play a game to learn how to calculate Cost of Delay and Cost of Production.
  • Discuss types of assumptions that teams make that lead to higher CoD.
  • Discuss various techniques like prototyping, lean startup and incremental delivery to reduce CoD.
  • Discuss how to forecast without estimates.
  • Continue the game to learn different wastes in Product Development.
  • Discuss and try various techniques to reduce Cost of Production.

Learning Outcome

In this session, you will learn:

  • What is Cost of Delay?
  • What contributes to Cost of Delay?
  • Different ways to reduce Cost of Delay.
  • Wow Scrum can help reduce Cost of Delay every Sprint?
  • Deal with fixed bid Projects.
  • What is Cost of Production?
  • What contributes to Cost of Production?
  • Different ways to reduce Cost of Production.
  • How Scrum can help reduce Cost of Production every Sprint?

Target Audience

Agile Enthusiasts, ScrumMasters, Coaches, Developers, Managers, Leaders

schedule Submitted 2 years ago

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