How do we balance between demanding absolute time estimation requests from business & relative estimation followed in Scrum

Scrum is an empirical approach which is based on an experimental way of execution through iterative and incremental nature. Scrum is designed to solve “Complex” problems where unknown is more than known. Balancing between the business’s demand for absolute time estimations and the relative estimation approach followed in Scrum can be challenging but is achievable with clear communication and strategic planning. Here’s a guide on how to approach this:

Understanding Both Perspectives

1. Business Perspective:
   • Businesses often need absolute time estimates to plan budgets, set expectations with stakeholders, and manage timelines.
   • These estimates are typically in days, weeks, or months.
2. Scrum Perspective:
   • Scrum usually uses relative estimation (story points) to measure the effort required to complete a Product Backlog item relative to other tasks. As Scrum is a framework it is not mandatory to use Story Points technique but in general large teams follow this method.
   • This approach accommodates the inherent uncertainties in software development and focuses on delivering value incrementally.

Steps to Balance Both Needs

1. Educate Stakeholders:
   • Explain the value and rationale behind relative estimation in Scrum. Emphasize that it improves accuracy over time and helps in managing unpredictability.
   • Demonstrate how relative estimation can lead to more realistic and achievable timelines through historical data.
2. Create a Translation Mechanism:
   • Develop a method to translate story points into time-based estimates. This can be based on the team’s historical velocity (e.g., average story points completed per sprint).
   • Example: If a team averages 30 story points per 2-week sprint, you can estimate that if there are 180 story points remaining, it takes another 6 Sprints of 2-week duration. Which means it takes another 3 months.
3. Provide Ranges:
   • When converting story points to time, present estimates as ranges rather than fixed dates to account for variability.
   • For instance, if a bunch of  features are estimated at 80 story points, and based on the team’s average velocity translates this to 2.5 Sprints, then present this range to stakeholders as 2 to 3 Sprints.
4. Incremental Delivery:
   • Emphasize the value of delivering work incrementally. This allows the business to see progress and adjust expectations based on real outcomes rather than initial estimates.
   • Break down large features into smaller, manageable pieces that can be delivered and reviewed incrementally.
5. Regular Updates:
   • Keep stakeholders informed with regular updates and reviews. Use sprint reviews and retrospectives to discuss progress and adjust plans as needed.
   • Transparency helps build trust and allows for timely adjustments in expectations.
6. Buffer for Uncertainty:
   • Include a buffer in your time estimates to account for unforeseen challenges. This can help manage risks and reduce the impact of any deviations from the plan.
   • Discuss this buffer openly with stakeholders to set realistic expectations.
7. Historical Data:
   • Use historical data to improve the accuracy of your time estimates. Over time, as you gather more data on the team’s performance, your ability to provide more precise time estimates will improve.
   • Share this data with stakeholders to show the reliability of your estimation process.

Practical Example

1. Relative Estimation:
   • The team estimates a new feature at 13 story points.
2. Historical Velocity:
   • The team’s historical velocity is 26 story points per 2-week sprint (13 points per week roughly).
3. Translate to Time:
   • For a 13-point feature, estimate the time required as approximately 1 week (based on historical velocity).
4. Present to Business:
   • Communicate to stakeholders that the feature is expected to take around 1 week, with a range of 1-1.5 weeks to account for variability.

By following these steps, you can bridge the gap between the business’s need for absolute time estimations and the Scrum team’s use of relative estimation. This approach fosters collaboration, transparency, and a shared understanding of the development process. It is important to note the Agile manifesto value “Customer collaboration OVER contract negotiation”. So the more collaborative, transparent and trustworthy environment is created between the customer and you, it will be easy to tackle better

Balancing the need for absolute time estimations from the business with the relative estimation approach followed in Scrum is a critical aspect of successful project management. If you’re looking to deepen your understanding and enhance your skills in Scrum methodologies, consider enrolling in A CSM certification in Hyderabad or a CSPO training in Hyderabad. These courses are designed to equip you with the knowledge and tools necessary to effectively implement Scrum practices, ensuring you can manage stakeholder expectations while delivering value incrementally. Whether you’re pursuing a CSM course in Hyderabad or aiming for A CSPO certification in Hyderabad, these programs will provide you with the insights needed to bridge the gap between business demands and Scrum’s empirical processes.