In this presentation, we explain how Estimation used to be done, its futility, what insights do we learn from the Lean-Agile BoK and how Agility can be delivered without Estimation. Business Leaders still need an understanding of effort, cost and timeline... and all these can be delivered without wasting time on Estimation.

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ESTIMATION:
DELIVERING BUSINESS
AGILITYWITHOUT
ESTIMATION
Sudipta Lahiri
Head of Engineering and Products, Digite
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BusinessAgility
■ Ability of a business system to rapidly respond to change by adapting its initial stable
configuration (https://en.wikipedia.org/wiki/Business_agility)
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We preach some pretty “weird” stuff… to achieveAgility!
“Projects” is a bad term!
No(almost) Estimation!
Zero Budgeting!
No Managers but “servant-leaders”
Don’t allocate work... let people pull their work!
Multi-tasking is a bad thing!
Tracking utilization is a bad thing!
Testers and Developers will collaborate!
We will deliver more, faster with lesser planning, estimation...!
That’s exactly opposite to what we did all this time!
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maguzz.henislie.com
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Digite’s Business AgilityWebinar Series
■ Designed to unravel some of these “weird” ideas…
■ Covering topics of Delivery from Estimation => Planning => Forecasting =>Tracking
to
■ Covering topics of SDLC from Requirements => Build &Test => Deployment
■ Let’s start by understanding the “starting point…”
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Today’s applications are very different…
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Deliver with SMALL, INDEPENDENT,TESTABLE work items that
have BUSINESSVALUE and allow you get MARKET FEEDBACK…
… we need to do this “rapidly”!
High degree of quality is assumed.

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ESTIMATION
How does estimation fit in this context?
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How were Estimates used?
Ideation /
Conceptualization
Project Planning /
Baselining
Execution /
VarianceTracking
Project
Completion
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Estimation Basis1
2 3

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Great intent but…
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1pm
1.15pm1.3pm
1.52pm
2pm
1.5pm
1.15pm
1pm 0.87pm
0.75pm
1.25pm
2.5pm
No winner in
this process!

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Great intent but…
10https://renierbotha.com/2010/10/07/the-art-of-it-effort-estimation/

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Great intent but…
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Great intent but…
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?
Time Sheet Data
Questionable
accuracy!

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Net, the “intent” remains an intent!
Ideation /
Conceptualization
Project Planning /
Baselining
Execution /
VarianceTracking
Project
Completion
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Estimation Basis1
2 3
Decades of user/customer commitments and revenue forecasting
is based on this premise of Estimation

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ESTIMATION: FRESH PERSPECTIVES
Let’s discuss this next…
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Perspective I: Relative vs Absolute Estimate
■ Relative estimation is accurate…
Absolute estimation is “highly” inaccurate!
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Perspective II: Understanding LT distribution
LeadTime histograms
From Lean Kanban University curriculum…
Mode
■ LT Distribution is aWeibull
Distribution with a long tail
– Mode, Median and Mean are all
different
– Mean > Median > Mode
– Using Mean as a basis for planning the
future is simply incorrect, unlike
Gaussian distributions
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Perspective III: “How sure are you?”
■ Your boss always knew this… the “gut feel”
estimate
■ The “gut feel” has a mathematical basis!
■ When asked for a estimate, always ask:
– What level of confidence?
■ It forces business to think!
■ A more aggressive estimate is associated with a
lower level confidence %
– Giving you more space if the estimate turns
out to be inaccurate
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From Lean Kanban University curriculum…
Mode

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Flow efficiency measures
the percentage of total
lead time is spent
actually adding value (or
knowledge) versus
waiting
Flow efficiency % = Work Time x 100%
Lead Time
Flow efficiencies of 1-
5% are commonly
reported. > 40% is
very good!
Low Flow Efficiency does not
mean people are idle; they are
doing other things
Often, they have high WIP
because they are working on
multiple things in parallel
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Perspective IV: Understanding Flow Efficiency

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Flow efficiency trend
■ SwiftKanban Flow efficiency trend chart
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Realistically, the number =
This number/Average User WIP

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Low Flow Efficiency (vs) Estimation
■ If your FE = 25% and your LT = 100 days, it meansWorking time = 25 days!
■ If the cardWorkingTime = 25 days andWaitingTime = 75 days, then…
– Spending effort to get greater accuracy in Estimation and conclude thatWorking
Time “could be” 20 days or 30 days, is counter-productive
– Instead, spend time to identify how you could reduce the 75 daysWaitingTime by
50%.That is far more productive!
■ Remember, we wanted things to get done “rapidly”
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What did we cover so far…?
■ The futility of the traditional estimation models….
– Garbage in => Garbage out!
■ The new perspective on Estimation
– Relative Estimation
– LT distribution => FatTail => Planning based on mean is mathematically wrong
– Always ask the question – what confidence % do you want with the estimate?
– Understanding low Flow Efficiency systems
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WHAT ISTHE PATH
FORWARD?
Different scenarios; different approaches…
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Approach I:Velocity based tracking!
■ Simple, fast, cute!
– No guesses
– Enough to predict date, team size, effort!
■ Critical success factors: Stable System
– Full backlog (a Story Map)!
– Small, independent stories that are getting completed
and delivered quickly
– Dependencies are a disaster
– Unstable team => normalized velocity per person!
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Approach II: Forecast Completion dates
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19-May-2019
Due Date
Forecast
Date
■ LeadTime histograms
From Lean Kanban University curriculum…
Mode
■ Simple, fast, cute!
– No guess; Predict date – not team size/effort
■ Critical success factors: Stable Conditions
– LowWIP; Dependencies are a disaster
– Small, independent stories delivered quickly

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Big bang initiatives
■ Large projects, large enhancements
■ Use Approach I
■ Forecast effort, duration based on
Velocity
– Associated to a confidence %
– Build a Story Map to get the full
backlog (starting point)
Continuous flow of items
■ Production Support, Maintenance
Tickets
■ Use Approach II
■ Forecast Completion Date based on
past LT distribution
– Associated to a confidence %
– Almost zero effort,
instantaneous
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Two key scenarios

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Game Changer: Asking the right question
From
“When can I get it”
To
“When do you need it”
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Game Changer: Demand Shaping
■ Demand > Supply, for most of
us!
■ If Forecast Date < Due Date,
then:
– Don’t spend bandwidth
now on this; work on
another high priority item…
maximize Opportunity
potential!
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19-May-2019
Due Date
Forecast
Date
■ If Forecast Date > Due Date,
then highlight the RISK on the
Board

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The “visible” anti-patterns!
■ 8hrs/Story Point!
■ Variance tracking = Baseline Story Points – Actual Story Points
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In closing…
■ Modern day applications need to be delivered with small, independent work items that can be delivered
fast and allow you to collect market feedback
– We cannot predict anymore what will work in the market
■ Estimation is at the heart of many planning and execution “ills”
– It is waste; keep it simple and do it as little and as fast as you can
■ Low Flow Efficiency systems:Value in reducing “WaitTime” than to predict (and optimize) “Work time”
■ UseVelocity to forecast big scope work that is broken into small, independent work items; use Lead Time
distributions to forecast one independent work item!
■ We have covered the why and how of Agile Requirements and Estimation
– In subsequent webinars, we cover how Planning, Forecasting and Execution have undergone a radical
change to build modern day systems… and how you can sell this to your Leadership!
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■ Reach me at:
– @sudiptal
– slahiri@digite.com
– lahiri.sudipta@gmail.com
THANK
YOU!
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“Absorb what is useful, discard
what is useless and add what is
specifically your own”
Bruce Lee