strict four-month innovation cadence. The results are stunning. Salesforce.com experienced an amazing increase in the number of features delivered by establishing short, steady release cycles. At the same time, the company drastically reduced its lead time for new functionality.
Determining the Budget
Fixing the date and using stable Scrum teams make determining a budget straightforward—assuming that labor is the decisive cost factor. If you have to scale your project, accurately forecasting the budget is more difficult, particularly for new-product development projects. If the budget is in danger of getting overrun, the product owner has to make a choice: Either ship with less functionality, or increase cost by asking more people to join the project—as long as there is enough time for the new project members to increase productivity. Apple, for instance, decided to increase cost and added more people to its first iPhone project in order to stick to the release date. But beware of Brooks’ Law: “Adding manpower to a late software project makes it later.”
What about Fixed-Price Contracts?
If you have a choice, avoid projects with fixed price and fixed scope. If that’s not possible, try the following: Split a fixed-price contract into two parts and carry out two consecutive projects. The first project creates the product vision and partly implements the vision using two to three sprints. At the end of the project, the product backlog has evolved based on customer feedback. This enables you to create a realistic release plan and to come up with a realistic budget estimate for the second project, which continues to bring the product to life.
Fixing time and flexing functionality facilitates the emergence of requirements and helps create a steady innovation cadence. It frees agile teams from having to describe most product backlog items in detail at an early stage, and it avoids the difficulty of deriving a realistic project end date from the requirements. Find out more about release planning on agile projects in my new book Agile Product Management with Scrum: Creating Products that Customers Love . The book is the product owner’s guide to creating successful products with Scrum; it discusses the product owner role together with essential product owner practises increasing envisioning the product, grooming the product backlog and planning the release.