TL;DR — Not knowing your team cost is like the difference between riding into a debate atop the elephant vs. standing behind it with a shovel.
Consider the Cost
How much money does your team burn per sprint?
Why do I ask? I posed this question a few weeks back on both Twitter and LinkedIn in response to the following $50,000 challenged issued by product evangelist John Cutler:
Amazed by how many teams have to jump through hoops to get basic product analytics (let along answer more nuanced/complex questions). It's like flying blind. w/teams costing $50k per 2w sprint (and way more in opportunity costs)…how can that be a justified cut corner?
— John Cutler (@johncutlefish) November 20, 2018
The $50k number seemed a bit high, causing me to wonder aloud if my math wasn’t a bit wonky. So, I forked the thread a bit, offering my own calculation for a team of six working in the same two-week time frame in John’s challenge:
So zeroing in on cost, does this math seem right for a US Dev team of ~6?
((($50hr*6)*8hrs)*10days)*26sprints = $624k/yr or $24k/sprint?
Do I multiply by 2 to include laptops, desks, parking, swag, Clif Bars, coffee, HR, & CS support?
So it's ~$12-$24k per feature per sprint? pic.twitter.com/Eq3ikgyyjH
— Dean Peters☕ (@deanpeters) November 20, 2018
I had hoped someone would contest it, and as a result, help me nudge my formula to perfection.
Instead, I got two “likes” on both platforms.
Why does this Matter?
If you notice in John’s original argument, he was able to use the cost of the team as a powerful fulcrum to pry apart the penny-wise fingers of persons who may not otherwise understand what’s at stake in terms of waste and missed opportunity.
So regardless of how one calculates the cost of a scrum team for a single sprint, if you’re a product owner who doesn’t know how much your team costs, then you may continue to lose arguments when you attempt to negotiate items such as:
- Easily accessible analytics
- Turnkey feature toggling
- Time-saving JIRA integrations
- Test automation vs. bug remediation
- Sponsored lunch-n-learns
- Engaging in technical debt collection
- Any debate with a C-Level executive
- Building a more durable infrastructure
- User surveys and A/B testing
- Feature prioritization
- Client visits
- KPI and OKR alignment
- Missed Opportunity
One other thought, conversations where cost is injected as a parameter don’t always have to be outward facing. In fact, as a baby step, why not send up a trial balloon by enumerating said expenses with one of your teams during an upcoming retrospective or estimations meeting? You may surprise yourself how it changes the nature of hotly contested debates over prioritization and discovery.
Want to learn more?
And don’t feel limited to my math, nor John’s number, there are plenty of others who’ve written on this topic. The trick is to pick a formula that works for you and see if you can’t move the needle closer to rapid value delivery; especially in those cases where those on the other side of the table may have lost sight of the goal. Here are just a few such conversations to help you get started:
- Agile Budgeting: How much will it cost? (guessing 2016)
- Agile Project Cost Management: General Practices (penned 2013)
- How to Calculate Budgets for Agile Teams (from 2012)
- Examining the Agile Cost of Change Curve (created 2013)
- Cost of Delay: Not Shipping on Time, Part 1 (circa 2014)
- My freshly minted formula in a handy cut-n-paste form:
((($50 per hour * 6 team members sans tools & goodies)*8 hours)*10 days)*26 sprints == $624k/yr == $24k/sprint
What about the cost of bugs?
Glad you asked, here ya go:
Oh, and if all else fails — and as a reward for reading this article through to the end — you may be able to save yourself some time and math simply by asking the right manager about the cost; though it never hurts to understand how said number is derived.