Tuesday 20 October 2009

Scrum doesn't work with fixed cost projects!

I have heard many project managers say "Scrum doesn't work with fixed cost projects!" when discussing approaches to software delivery.

I have pondered this and found that it is a difficult issue to solve.

My current thinking, is that the statement is kind of true.

But before you all jump up and down and protest... I think that the statement is true (in a way), but perhaps the "fixed cost" bit is actually what is wrong. Not Scrum.

Why do projects have to have a fixed cost? In order to "fix" cost, you have to estimate the project down to the finest detail up front. Trouble is, such estimates are always wrong. So you will end up either running over budget, or working late for free, or reducing functionality, or even quality.

So why insist on a fixed price? Why not get a clear set of high level goals, with an approximate release plan, with milestones as guides.

Get a rough cost, and release funding in small chunks, re-assessing at every milestone. You can react to changes in scope & requirements with out storing it all up and fighting the fire at the end of the project.

Am I being too simplistic?