The VP of a user organization approached us with a request for help. Due to the budgeting process, they were estimating the size of high-level stories in euros, and one thousand euros equaled one story point.
The challenge was to understand how to best leverage the point burn-up graph to have visibility into projects’ actual progress.
Like any pure-hearted agilists would do, we did have a conversation about the original intent of story points as well as the concept of beyond budgeting – and then proceeded to help them work around the constraints they were facing.
When doing agile by the book – that is, with a dedicated cross-functional full-time team – the burn-up in Agilefant shows what’s done, what’s still left, and visualizes this as a function of the time. The team’s cost is constant, and the “remaining budget” is the same as the time left on the horizontal axis.
This set-up changes when something else than the horizontal axis determines the budget. In this case, we must separately capture how much of the total budget has been spent.
In project management literature this approach known as earned value project management. There is plenty of material available on that and Agilefant readily supports it. Let’s flesh out the challenge and the solution using an example.
Suppose that Jack wants to build a house in seven weeks and has a budget of 100k€ at his disposal. He has the following story breakdown, and has an estimated budget per story, with one point representing one thousand euros.
- Four walls (10)
- Roof (20)
- Interiors (25)
- Door (5)
- Chimney (40)
Now, suppose that Jack starts with the Four walls (10 points) and gets it done at the end of the first week.
Jack’s velocity is 10k€ worth of budgeted work per week, and if he keeps this up, he’s going to finish by week 10.
But we don’t know whether if Jack spent already half of his budget in getting the Four walls done. In that were the case, we would already have a pretty good hunch that the house will not be done on the budget.
Since the horizontal axis here does not determine the budget, you have to keep track of the budget separately.
For this, you can define KPIs in the Account Settings section in Agilefant. Chances are that this has already been done for your organization – in the particular case of this user organization, we did it together with their management.
Then you can report new KPIs (in this case, spent euros) on the project details tab as a function of time.
In Agilefant you currently can report KPIs to projects. So, for this – as well as to get the burn-up graph in the first place – you have to create a project and move your stories into it. As the budgeting process, in this case, was yearly, the organization in question created yearly projects which lasted from the 1st of Jan to the end of Dec.
Let’s return to the example. Suppose that Jack spends 5000€ in getting the Four walls done, and keeps track of the spending using Agilefant’s KPI functionality. The burn-up graph will look like this:
Based on the above burn-up, the best guess we can take based on the history so far is that the project will take 10 weeks, and it will cost 50k€.
Encouraged by his first week, Jack starts working on both the Door (5) and the Chimney (40). However, by the end of the third week, he has only completed the door and spent 20k€ in the process. Now the burnup looks like this:
Based on this, while Jack may not be in danger of going over his 100k€, he is also getting work complete a lot slower than would be needed to get the house done in seven weeks.
if your budget is not solely determined by the horizontal axis (in other words, time left), recording the amount of budget expended separately using KPIs is needed to get the entire picture.
Reach out in our chat if you have questions!