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  • Writer's picturePaul Gravina

Cost Control Agile vs Traditional

Logical starting points for cost control are, to begin with estimating, most of your costs for your project are estimates and, by definition, have different accuracy levels. Try to estimate as accurately as possible, regardless of your perceived level of accuracy; be ready and able to control costs. At Owls Nest Capital we are using Scrum so the work for the project is assigned to the ENTIRE team not one person on the team. Self-organization is key to the team’s makeup; scrum team members use the effort and degree of difficulty (development) to give estimates to the work. There are lots of ways to estimate in agile frameworks, numerically (1-10) Fibonacci sequence (1,2,3,5,8,13) and even clothes sizes can be used (S, Xl, XXL, XXXL), the KEY to the estimating process is that the ENTIRE team knows and understands the decided scale it will use for the estimations. Once you have your sprint meetings the entire team will sit down and estimate the effort for each story that is stored in the backlog. Thus your efforts actually help in creating your velocity for each sprint, you must have the product owner in all estimating meetings so he can hear and see how difficult the work will be to create the application. (Honest estimating) In my experience trying to have your scrum/agile team show their estimates all at once, this way when performing the estimation process you avoid pressuring the estimates to either reduce or expand your workload.

Concepts of project costs are not too difficult to understand and they don’t differ from framework to framework. You have presented an initial project proposal, including a cost estimate. Many costs are defined, (rooms for the work) but most are estimates for the project (resources, hours). If you are the project management you are always under pressure to come in below the financial budget allocated for the project.

Manage Cost Ideas for Project Managers:

1. Create a project budget.

If a formal budgeting system exists to use it to create a project budget. You also might have to create your budget by collecting data directly from informational sources. Meet with your agile/scrum team to define the nature of all expenditures.

2. Screen expenditures.

Require that a project manager approves expenditures in advance, it will discourage nonessential spending.

3. Auditing.

Auditing is concerned with conformance to pre-established and agreed-upon criteria and compares performance to an existing standard.

4. Overhead allocations.

Watch out for overhead allocations from other departments, sometimes departments are indifferent to budgeting and sometimes view projects as ways of dumping costs.

5. Purchased Items.

Get yourself familiar with contractual agreements and terms and conditions so you do not pay for something you do not need.

6. Communicate Cost Overruns

Get out in front of this and don’t delay. Bring it to the attention of stakeholders/business owners, if you need additional resources you may need to change your project scope.

Ideas from Owls Nest Capital on Cost Control Agile vs Traditional
Cost Control Agile vs Traditional

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