There are lots of articles out there on Agile estimation, i.e. T-Shirt sizing, Planning poker, etc. which is commonly used at the iteration planning stage. But what about in the scenario where you haven’t engaged a supplier/partner yet and you need to know how much to budget for?
There are probably many ways to do this but here’s a couple of thoughts:
- Focus on value – base your business case on value and window of opportunity, i.e. how fast can you start to realise some value. What do you expect (or hope) the value / benefit will be? The cost element comes in during the tender process which is just one aspect to partner selection and will be discussed in a later blog post.
- Decide how much you want to spend to solve your problem – there are very few organisations that have a bottomless pit of cash. The annual budgeting cycle will provide you with a ceiling for expenditure so surely it shouldn’t be too difficult to work out what percentage of the overall budget you want to allocate to the problem at hand? In Agile delivery working within a fixed (or capped) budget is totally compatible with Agile thinking.
You might consider using both approaches to give you a feel for the level of risk involved in the business case before kicking off an Invitation to Tender.