Software developers don’t generally understand cost estimating and cost estimators generally don’t understand software development. Adding agile to the mix makes the situation even more challenging.  Agile software development practices put the development team squarely in charge of cost estimates for short-term deliverables. And these teams, once they have developed a cadence, can be very successful estimating in this context. Cost estimators have a heftier and less certain responsibility for estimating the software project as a whole – at least for the Minimal Viable Product (MVP). Clearly these estimates are approached from different perspectives, but in a perfect world, the software development team would look to the cost estimators for inspiration and guidance, and the cost estimators would look to the software developers for product and project details. This paper will describe how programs managed with agile processes and practices differ from traditional software development programs and dissect these differences for their impact on cost estimating. Differences will be presented from the perspective of a development team and a cost team for a traditional software development project and an agile project. We focus on four aspects of the program and draw conclusions on how to be more collaborative and cooperative in the agile domain: the nature of the delivered product; size and complexity of the software items; the development approach; scope and flexibility of the development schedule.

Richard Mabe is a Solutions Consultant for Unison Cost Engineering. He has over 45 years of operations analysis experience. He has served as a civil service employee as a federal contractor specializing in logistics analysis and cost analysis for U.S. government programs. Richard applies industry best practices to estimate life cycle costs for software and IT systems. His experience includes hands on data collection, cost estimating and program management.