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Ahhhw, every time is so frustrating..
We have a dedicated server in our hosting company, and everytime i have to write down a new app (or an add to an pre-existing app), i use to 'lose' some time to optimize the code for many behaviors (reducing the db query, optimizing the db structure, reducing the bandwith, etc..) depending on what the app is supposed to do.
Obviously, is the point is not that i write bad code and then rebuild it, its just that after the project is complete, i allways find somethings that could be done better.
And everytime, if my boss catch me doing this, he say 'Your wasting your time! if the application need more resources, we buy more RAM, more CPU, or more bandwith!'.
What is the best (and simplyest) way to explain he that optimization is still important, and that is not so easy or automagically upgrating the hardware of an (production!) server?
EDIT: im not talking just about database optimization, but every aspect of an application
Chances are you are really wasting time. Most of the optimizations that you learn in college or university are sort of irrelevant in the business world. I recommend concentrating on those optimizations where you can quantify WHY your optimization is worth your company's money (your time spent is their money spent).
When trying to optimise code you need to follow the optimisation cycle. There are no short-cuts.
Define specific, detailed, measurable, performance requirements.
Measure your application's performance.
If it meets the requirements, stop, as continuing is a waste of time/money.
Determine where the bottleneck is (which machine? CPU, memory, disk, etc.?).
Fix the bottleneck (either hardware or software fix, whichever is faster/cheaper).
Go to 2.
From your post it doesn't sound like you have done 1 or 2, so you've skipped over 3 and 4 because you don't know enough to do them, and are now stumbling blindly around in 5 attempting to optimise whatever you think needs optimising.
So from what you've said I'd have to agree with your boss. You are wasting your time. Or at least you haven't followed enough process to prove otherwise, which is essentially the same thing.
Keep detailed notes and time sheets the next time you make a server move/upgrade, and protocol every minute of work that arose from it (including things in the weeks after). Then you'll have hard evidence that upgrading is expensive, and optimizations help delay the investment.
In the current situation, you might be able to do something with benchmarks and statistics along the line of "without my optimization, the server will be at 90% capacity with X number of users. With my optimization, we can cater for Y users more, before we have to get a new machine."
On the other hand, the line between optimization and over-optimization is thin. While writing code that doesn't waste resources is good craftsmanship and should be a human right, RAM and disk space are awfully cheap these days. Optimizations also tend to make code more complicated, and harder to maintain for others. When you control your own hardware, code optimization may not always be the top goal.
Do you have performance objectives for the application(s)? Free capacity, response time, bandwidth usage etc. Without them you will find it difficult to justify why an improvement needs to be made. You need to be able to quantify the problem before people will spend money on it.
If the application is already meeting the requirements then your boss is probably right.
To ensure reserve capacity for future customers you (and your boss) could set a threashold such that once performance comes within a percentage of the requirements you need to investigate the problem. This is the time for you to request/push/negociate for performing optimisations as he will be aware of the problem and the risk of doing nothing. If you can recommend some changes to correct the problem that will cost less than the hardware then hopefully he should agree to let you do it. Of course the reverse still applies. If the total cost of the hardware upgrade is cheaper then that is probably the better option.
Wait until buying RAM and CPU becomes more expensive than paying you to optimize the code. Then you have a case.
There's a break even point between improving software vs. improving hardware. For desktop systems, a good threshold is by purchase time:
If that machine fails, can you go to the next mall and buy a replacement within an hour?
As long as you can answer yes, optimization is futile - an investment into the future maybe, but is that really your decision alone?
A similar rule for web sites might be "how long would it take to get a new hosting contract on that?"
This isn't perfect, it covers just a single aspect of scalability. I like it because it's an easy to understand aspect outside of technical concerns.
Of course, you should have more material if that aspect suddenly gets brushed away. It helps to just ask what are the companies/bosses plans for a few key scenarios. - e.g. what contingency plans for DDOS attacks, for "rush events" etc. Having some data to back that up, some key stories ("company foo was mentioned on popular night show, web server broke down under requests, business lost, potential customers angered") helps a lot.
The key to realize is that (assuming from your description alone) it is your responsibility to forsee such events, and provide the technical solutions, but it's not your responsibility to mke these decisions.
Also, getting a written statement from your boss that "five hours downtime isn't a problem, get bck to work on the important things!" is a good CYA.
about the same way one would explain a developer that code/resources optimization is unimportant ...
i guess this problem arises because your way to measure importance is different than his ...
his job is to care about money and make sure he gets the "most" out of it ... and frankly, servers are cheaper than developers ... and managed servers are cheaper than admins ... and the ugly truth is, that many people think that way ... personally, I think PHP isn't really the right choice for performance-critical parts of an app ... neither are RMDBSs ... but nearly every managed server runs PHP and MySQL and business clients prefer to have an app they can run everywhere, based on a technology widely known, which turns out to be PHP and MySQL on the server side ... the world is a cruel place and the truth is ugly ... now when it comes to you, you have only 2 choices:
live with it
work with people who are more like you, and who share the same ambitions
your boss does the job right, from his perspective ... what you do is a waste of company money, because the company's goal is not to write beautiful and highly optimized code ... whatever your company does, in the end you only provide a tool ... and the value of a tool is measured by the use it provides in relation to the money it costs ...
if your optimizations were economically reasonable, then the easiest way would be not to optimize anymore and wait for the moment until your boss comes to you, asking for speedup ...
i suggest, you either look for a new job, or focus on other important things:
good design and use of best practices such as KISS, DRY, SOLID and GRASP
scalable architecture (doesn't mean you have to actually implement it, just have an idea how the whole thing could scale well)
maintainability, including readability and good documentation
flexibility & extensibility
robustness & correctness
do not reinvent the wheel and use the right tools for a job - use adequate technologies, libraries and frameworks
fast developement
these goals are important for the present and the future of a software project (also when it comes to money (especially the bold ones)) ... and they provide the possibility of doing optimization when actually needed ...
this probably isn't the answer you wanted, but I hope it helps ...
Optimizing is often really just a waste of time, what is more important is optimizing for maintainability:
- keep the code simple (see: KISS)
- move duplicate code into functions (see: DRY)
- optimize comments (as few comments as possible, as many as necessary)
- remove unused code
Those changes do not necessarily affect the speed of the program but they reduce the time needed to implement changes and fix bugs so they have real business value as they save expensive developer time.
If you're having to explain why there is a need for optimisation, then you're already on a low-win-rate path. Unfortunately, the best argument is when there is a situation where performance is becoming a noticeable problem (e.g. customers complaining) - this makes people sit up and listen if they're getting constant ear-ache about it. Often, the solution can be that throwing hardware at it is the best/cheapest solution.
However for me, performance is important, when working on highly scalable systems, you need to spend time on optimisations. It should at the very least be on your mind while you're developing and a lot of things can be swallowed up in the dev process (as opposed to after you've finished, then going back to optimise).
e.g.
- What happens if my database has 100,000,000 records instead of 100,000? (you can easily fool SQL Server into thinking there are more records in a table than there actually are to see what the effect on the execution plan would be).
If you're being pro-active about optimisation (which I personally think is good), then you need to try and come with a real-world meaning to your boss. e.g. "if we optimise our site by cutting down the page size, we could save x amount of bandwidth a month, saving us xx much money".
You do have to be careful about micro-optimisations though as you can micro-optimise until the cows come home, for much lower benefit.
You could just wait until your boss says "Why is it taking so long?" Then you could say "Hey, boss, we could buy 10 times as much hardware, or I could spend a couple days and make it 10 times faster". Here's an example.
Added: If your boss says "Well, why did you make it slow in the first place?" I would have no trouble explaining that he could hire God's Right Hand Programmer, and the code as first written would still have room for optimizing.
If you are on a relational database (and your not working with trivial applications).... you cannot afford to write bad database queries. Since you are you using a red-gate tag I assume you are on SQL server. If you design a bad schema (including queries) on SQL Server a database server when you start getting moderate traffic you will be forced to scale in horrendous ways. Once you get a high level of traffic you will be screwed -- and will need to hire a very expensive consultant/DBA to undo the mess -- use this argument with your boss :D.
What I am trying to get at is even though SQL is declarative and it doesn't appear that you have to pay attention to performance -- it doesn't really work that way. You have to design your data model by keeping in mind the way it is going to be used.
If you are writing business logic in application code ... well that doesn't matter much -- you can fix that latter with less trouble if performance becomes an issue. Most business logic these days is stateless (especially if its web-based or web-service based) meaning you can just chuck more machines at the problem -- if it's not than its just a bit harder.
Every time something takes long than it would have if the refactoring had been done ahead of time make sure your boss hears about it.
IMO, It's less a case of convincing that optimizations need to be done (and based on your Boss's responses, you're not going to win this fight), and more a case of always building in refactoring time into your estimates.
Do a cost analysis...
This will take me X hours and will mean every project needs 50% less data storage. Based on us doing 2 projects a year using on average 100Gb space, that will save $Y after a year, $Z after 3 years.
Crude example but it suffices.
Ultimately you and your boss are both wrong... you think code has to be fast (primarily) to satisfy your idealism, he doesn't care at all as he wants to deliver products.
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Lately I've been feeling like I'm being pulled in different directions. In my company there are a lot of forces demanding my time and I'm having a hard time deciding which direction to focus my energies.
I have the choice of several different coding projects, some of which could demand a lot more work over time, and present unknown challenges.
How do you decide what to work on next in the big picture? Grease the squeakier wheels? Low hanging fruit? (translation: easier projects)
Do you have a system for determining and reaching your goals?
We've used a value graph to identify projects based on value vs. effort, as a part of lean.
A few of the things I ask that affect what I work on :
Are any of my tasks holding up other developers or keeping other people from being able to do their work? If so, it'll probably get done first.
Do I have any tasks with deadlines coming up? If so, it might be the next candidate to work on, unless I can justify something else being worth the task slipping schedule.
Will work on any of the tasks affect (make obsolete / make easier / make more difficult) any of the other tasks I have? If so, it might get moved up.
Is there a good chance that any of the tasks will change (requirements still not concrete / other tasks out there that might affect it), making time spent on it now likely wasted? If so, it gets moved down.
Are there any things that just really bug me, that I think I can get done before anyone notices that I'm not working on whatever my boss thinks is the highest priority. (which is justified because it'll distract me from thinking about the other things).
Are there any tasks I should work on while things are still fresh in my mind?
... other than that, we go with a combination of whatever sort of fixed deadlines I have, what tasks I have that might be holding up other people, what the boss wants first (I like this boss, and I only have one giving me tasks ... in the past, I'd've answered differently), which ones seem more interesting, which ones I can get done quickly to just get them off the list, etc.
There have been times when I've had more than one manager, and I just had to put everything on a list on a whiteboard, and told them to number them (17 items, which kept growing). Management balked, but I was sick of getting bitched out at meetings week after week with stuff not being done, and having to go through the list of every 'emergency' task I was given. (and being told that any manager in the department was allowed to task me in the case of an emergency ... which was something like 30 people ... and being bitched at when I asked who got to decide if it was an emergency or not.)
When I have the choice: whatever seems to be the biggest challenge with the most fun attached.
Fun + challenge = rapid learning, to me.
And sometimes that takes me away from the technical stuff - people can be a fun challenge too.
I tend to weigh 4 items based on things when deciding what to work on next:
Is this item a requirement for something else?
Can I work on this item yet (ie, am I waiting on something for it)?
How fast/easily can I get this item done?
How interesting do I find the work required for this item?
I my current team (working on a variety of Business Intelligence software projects), we've recently started adopting a variant of classical "agile" project planning and estimating -- everybody seems to be pretty happy with it so far, including us (developers of different levels of experience), the product managers (highly technical people, typically also with some development experience, but mostly interested in the business side of things), management (pretty technical at the level we report to, but also less-technical, more-businessy directors and VPs), and other stakeholders (users and would-be users of our software). But, of course, it is early times, and we'll adjust as we go along. (In the past few years I used other variants of this in very different application areas, such as cluster management software; but I've often also used more ad-hoc, less-structured approaches).
The outline is as follows. At each iteration (we're currently on 2-week iteration cycles), the PMs choose some "elementary units of business value" that they might like to get from projects in our area -- a typical unit would be one feature, a bug fix, some optimization aspect, etc. In a small meeting with tech leads and one or two senior engineers, each unit is decomposed into engineering tasks (and dependencies among tasks are identified). In a larger whole-team meeting, the relative "cost" of each task (how much time, roughly, it will take to perform that task relative to other tasks) is collectively assessed (we're using completely abstract units of effort we call "points", though I've seen other teams use less abstract units such as "ideal engineering-days"). The costs assessed include unit testing and technical documentation.
The tasks, each with its assessed cost, go on what's called "the backlog" for the team, together with "internal restructuring" tasks (typically refactorings that will deliver no new user-observable plus, but will make further development and maintenance more productive), also with assessed costs and a summary of expected benefits (which must be expressed in ways understandable to the PMs -- fortunately, as I said, ours are highly technical people). A refactoring may also, by engineering team consensus, be deemed a prerequisite of certain business-requested tasks (e.g. "makes no sense to work further on component X until class Y, too large, is properly split, which will take N points").
The PMs now get to order the tasks in the backlog in any way they prefer, based on the business value that completing the units those tasks make up would deliver, subject to the dependency constraints. They have a good idea of roughly how many "points" the team may accomplish in a 2-week iteration (our "velocity") based on past results, so they try to make sure some business-valuable release can be performed at the end of the iteration (as opposed to having many business-valuable thingies "in flight"... but none completed and deliverable to stakeholders yet!-).
The team then devotes about 80% of its time and effort to tackling the top-priority tasks as designed by the PMs (including pair programming some of the time, for particularly urgent tasks or for situations where one team member needs to learn more about some technology or some part of the codebase, and another team member who's an expert in those is available for pairing up with them for a while). The priority order is an important indication, but it's not entirey rigid (e.g. if the top task requires extensive work in Java, and the second one requires it in Python, I may well pick the second one, as my relative productivity will be enormously higher that way -- and vice versa for a team member who's a Java guru, etc etc).
"Priority 0" aka "Code Red" issues may arise at any time, and, if they do, by definition they will take priority over any other task (and be accounted for only retroactively in the planning, to make sure velocity is assessed properly). But, as we do a pretty good job with testing, release engineering, and other quality-assurance practices, those emergencies are fortunately few and far between.
This, plus other "mandatory" ways for engineers to spend their time (training courses, all-hands meetings, quarterly performance self-evaluations and peer reviews, etc), is supposed to account for about 80% of engineers' time -- the remaining 20% being time each engineer should devote to "something completely different" ("blue-sky" exploratory projects, "egineering community" efforts, open-source contributions, etc, etc), not directly related to the projects at hand. Nobody actually measures the hours precisely, but that's still a useful guideline (I keep thinking of ways to make measurement easy and painless that I could implement in my 20% time, to help me allocate time and effort more precisely, but I haven't actually gotten any round tuits yet;-).
Easy. I ask my boss.
High value + Low risk.
Only go on high value + something with higher risk if you already have a track record in the company / credibility.
Easy: What is the highest and best use of my time.
If I am involved in a project and that isn't the answer to that question, I ask myself why I'm working on it and how soon can I finish it.
:) On Job i left this decision n my Project Leader and Team Leader, As they know better
"What is project priority"
At home, i do where i see fun, learning and challenge
When I have a choice about which job to start next I try to find a balance between two things: quick, easy fixes that are highly visible (e.g. fix the non-critical bug that a user has been complaining about) and taking on a project where I can use something I've been learning about. I find if I alternate between those types of jobs I can keep myself and my co-workers happy.
I'd look at what has the highest priority from management's perspective for an intial prioritizing of upcoming projects. If they are all priority 1 projects, then there are a few other factors that may help my decision:
Do I see how valuable the project will be to the organization? Is this the type of thing that really helps with the competitive advantage that we have?
Does there seem to be a buildup of projects of a specific size? For example, are lots of little projects being ignored for the few really big ones? If so, I may take some of the little ones that may be seen as quick wins that may help my team look good.
Do any of these projects use my strengths? This can be a bit hard to determine but it could help a lot with motivation, at least using the Marcus Buckingham interpretation of a strength.
What teams and structures are in place for the other projects? I don't think I'd want to join a project that looks like a massive train wreck about to happen. Is there enough structure so that I won't go off and do my own thing that may hurt the project's chances of success? Do I believe I could handle working with X using methodology Y and technology Z?
Those are a few of how I'd look at making the decision, along with talking to my manager as part of this is his job, right?
You should ask yourself a question. Are you pursuing a general IT career path which may or may not include your current company, or, do you intend to have a long career with your current employer?
If you intend to have a succesful IT career moving around differnet employers then, sadly, the most succesful strategy is "buzzword collecting". Identify the current/next big thing and try to get it on your CV. e.g. FInd a trivial AJAX with SOA back end project which may never go to production, this will enhance your value to future employers even if the project had little value to your current temployer.
If you plan on a long career with your current employer, the most succesful strategey would be to align your goals with the business. For instance the most critical project for the business may be upgrading an old unsexy VB/Oracle stock control package to include an ancient EDIFACT interface with a new supplier. If you are seen as a key player in the success of such a project you will rank very highly (and rightly so) in your employers esteem, and your opinions and advice will be taken seriously.
Since you didn't specify whether you talk from developer or manager perspective, I'll try to cover both.
Providing a framework for prioritisation of efforts is a management’s direct job. The immediate day-to-day prioritisation may stay with management or be handed over to developers.
The decision who should work on what and when in average company is likely to be perceived as a matter of power, control and prestige by both groups and one who makes the most prioritisation decisions as clearly more important player.
In shrewd companies, however, it is well understood that decisions have several interesting properties:
Each takes time and effort to make, which is diverted from doing the actual work.
Every decision is a trade off
To make a good trade off one who makes the decision needs all the right information in her or his disposal
Subsequently, management doesn’t have all the information to make every decision and nor they likely to have right information to make a good trade off in each case, but developers cannot spend their time doing hundreds of prioritisation decisions per day instead of producing software, nor do all necessary co-ordination.
Hence the solution is for management to create a simple framework for task assessment and prioritisation and hand it to developers who will quickly apply it on case by case basis, filling the gaps. In management lingo such framework is called strategy; it saves time by removing repetitive redundant decision making, gives focus and consistency to the efforts, and provides direction. It should be detailed enough to remove the burden of re-assessing the situation each time, but loose enough to allow developers to make right choices when it matters.
The framework itself may give very straightforward rules for making decisions or, alternatively, provide some analytical methods such as Pareto, SWOT, Cost Benefit, Expected Return analysis or Porter Five Forces etc. However, it is worth keeping the rules simple, unambiguous and as straightforward as possible.
Joel Spolsky made available to the world several very good internal software strategy documents written in plain English. Not all documents are directly to do with developing software (showing that it viable actually to have a different unrelated decision frameworks for various aspects of the company life). Also since the documents are several years apart it’s actually possible to see how these frameworks kept changing to suit the situation:
Fog Creek Compensation
Our .NET Strategy
Set Your Priorities
Fruity treats, customization, and supersonics: FogBugz 7 is here
If you're intrested in choosing what things to work on from a personal point of view one of the best advices around in my opinion is the one given by Paul Graham in his essay "What You'll Wish You'd Known".
Fundamentally as software developers we are business enablers. Your priorities should be in tandem with business priorities and be pragmatic between quick wins and larger strategic initiatives. Effort and Priority make an excellent matrix in which to score projects taking the least effort/highest priority first.
From the tone of your question it sounds like business priorities are either unclear or there is conflicting direction between stakeholders. This is the place to start and it will make your decisions much easier once it is resolved.
You really need to discuss this with the business because only they can tell you what has the highest value to them. After that, I would go after the items that carry the most risk because if something is going to cause a schedule to slip it's best to know early rather than late.
If you're having trouble with what the business priorities - usually caused by being on multiple projects with different stakeholders who all think that their project is the most important - you can try getting both stakeholders in a room to discuss which project is higher priority. Or you could delegate that negotiation to your manager as that is actually his job.
I tend to work on multiple projects at one time, so I will work on a harder project, make some headway, and when I get stuck and need to think about how to do the next part, I will go to some low-hanging fruit, so that I can continue to make headway, as I give my subconscious time to work on the harder problem.
But, it really depends on your priorities. I have never been good at just trying to impress people, so I just quietly go about trying to get work done.
If we're talking in a work environment, i go through and just prioritise things - what is mission critical, what is urgent, and then anything else just gets put into the list and it gets done in the order it comes in.
As for picking the next big project at work, i like to do what offers the greatest challenge. I had been working as a developer for a year and i had the opportunity to do some work for a very large company working with some security experts and doing things i'd never done. So i chose that, and it looks great on my resume.
In terms of personal development work (not as in self help), again i'll offer something that challenges me. It's got to be something that i haven't done before. It doesn't matter if someone else has done it - i haven't, and i can learn from that.
In the end, it all comes down to what value it holds for you, and what value it holds for the client. Luckily, i've got a few years of sales experience under my belt as well, so i can easily sell the products i need to to clients.
If your problem is one of procrastination, then perhaps you need to focus on getting rid of those jobs that you fear tackling most - or at least making some forward progress on them to reduce the stress of considering how far behind you are.
This book, by Mark Forster, provides some good tips.
Failing that, you might want to produce an iteration plan. Let everyone vote for jobs - whatever gets the most gets scheduled right away. that way every stakeholder, including yourself gets some input into scheduling.
I would ask the boss, if they wont make the decision then I would go for the project which I felt was going to be best for the company, in profit and moral of the team.
If I was torn between too projects i would go for the one that sounds like I can develop my skills more and be interested in most.
If a project sounds exciting I become more driven and determined too :)
Given the nature of your question, I'm assuming this is all work that somebody thinks you should be doing, but there clearly isn't enough time to do it all. Therefore, you are just looking for priority knowing full well that some items are likely not to get done.
Impact/Risk if the item isn't done.
Visibility - Does anybody else really care about this task
Alignment with department goals - weed out things that really aren't your job
Alignment with company goals - weed out things that aren't important to your company's business.
Enjoyment factor
Alignment with career goals - Many people would rank this item significantly higher. Depends how important your career is versus what you do today. I've rank today's enjoyment a bit higher than long term career goals. Some projects may be horrible, but they can move along your career.
I guess it depends on how much is on the list. If there's a lot of low hanging fruit that's been on the list for a while, it may be worth while to take some time and clean some of it off. That way, there would be less demands on the available time and potentially more time or incentive available to work on the big projects.
Plus it can be cathartic to be able to cross a bunch of stuff off the list.
I will usually start working on a larger project first. Then when I feel I need to step away from it for a bit, usually so I can approach it with a clear mind later, I try to kick out some of the quick one-off tasks or simple projects.
I know that isn't very descriptive, but calling the occasional audible for distraction seems to work out well for me when tackling a big project list.
I tend to look at project from a learner prospective. I tend to choose a project that will help me learn something new, I also look for "cool" and intersting as well.
On tthe other hand you can choose your next project according to where it would lead you. Ask yourself if you have a career goal that project X will help you achieve. Perhaps a high profile project is better then intersting - at least for a short while.
One way to defide is to define several key pints that matter to you (i.e. new technology, intersting etc.) and try to rate each opportunity and see which gets the higher score.
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If so why? How much?
I tend to inflate mine a little because I can be overly optimistic.
Hofstadter's Law: Any computing project will take twice as long as you think it will — even when you take into account Hofstadter's Law.
If you inflate your estimate based on past experiences to try and compensate for your inherent optimism, then you aren't inflating. You are trying to provide an accurate estimate. If however you inflate so that you will always have fluff time, that's not so good.
Oh yes, I've learnt to always multiply my initial estimation by two. That's why FogBUGZ's Evidence-Based Scheduling tool is so really useful.
Any organization that asks its programmers to estimate time for coarse-grained features is fundamentally broken.
Steps to unbreak:
Hire technical program managers. Developers can double as these folks if needed.
Put any feature request, change request, or bug into a database immediately when it comes in. (My org uses Trac, which doesn't completely suck.)
Have your PMs break those requests into steps that each take a week or less.
At a weekly meeting, your PMs decide which tickets they want done that week (possibly with input from marketing, etc.). They assign those tickets to developers.
Developers finish as many of their assigned tickets as possible. And/or, they argue with the PMs about tasks they think are longer than a week in duration. Tickets are adjusted, split, reassigned, etc., as necessary.
Code gets written and checked in every week. QA always has something to do. The highest priority changes get done first. Marketing knows exactly what's coming down the pipe, and when. And ultimately:
Your company falls on the right side of the 20% success rate for software projects.
It's not rocket science. The key is step 3. If marketing wants something that seems complicated, your PMs (with developer input) figure out what the first step is that will take less than a week. If the PMs are not technical, all is lost.
Drawbacks to this approach:
When marketing asks, "how long will it take to get [X]?", they don't get an estimate. But we all know, and so do they, that the estimates they got before were pure fiction. At least now they can see proof, every week, that [X] is being worked on.
We, as developers, have fewer options for what we work on each week. This is indubitably true. Two points, though: first, good teams involve the developers in the decisions about what tickets will be assigned. Second, IMO, this actually makes my life better.
Nothing is as disheartening as realizing at the 1-month mark that the 2-month estimate I gave is hopelessly inadequate, but can't be changed, because it's already in the official marketing literature. Either I piss off the higher-ups by changing my estimate, risking a bad review and/or missing my bonus, or I do a lot of unpaid overtime. I've realized that a lot of overtime is not the mark of a bad developer, or the mark of a "passionate" one - it's the product of a toxic culture.
And yeah, a lot of this stuff is covered under (variously) XP, "agile," SCRUM, etc., but it's not really that complicated. You don't need a book or a consultant to do it. You just need the corporate will.
The Scotty Rule:
make your best guess
round up to the nearest whole number
double that quadruple that (thanks Adam!)
increase to the next higher unit of measure
Example:
you think it will take 3.5 hours
round that to 4 hours
quadruple that to 16 hours
shift it up to 16 days
Ta-daa! You're a miracle worker when you get it done in less than 8 days.
Typically yes, but I have two strategies:
Always provide estimates as a range (i.e. 1d-2d) rather than a single number. The difference between the numbers tells the project manager something about your confidence, and allows them to plan better.
Use something like FogBugz' Evidence Based-Scheduling, or a personal spreadsheet, to compare your historical estimates to the time you actually took. That'll give you a better idea than always doubling. Not least because doubling might not be enough!
I'll be able to answer this in 3-6 weeks.
It's not called "inflating" — it's called "making them remotely realistic."
Take whatever estimate you think appropriate. Then double it.
Don't forget you (an engineer) actually estimate in ideal hours (scrum term).
While management work in real hours.
The difference being that ideal hours are time without interuption (with a 30 minute warm up after each interuption). Ideal hours don't include time in meetings, time for lunch or normal chit chat etc.
Take all these into consideration and ideal hours will tend towards real hours.
Example:
Estimated time 40 hours (ideal)
Management will assume that is 1 week real time.
If you convert that 40 hours to real time:
Assume one meeting per day (duration 1 hour)
one break for lunch per day (1 hour)
plus 20% overhead for chit chat bathroom breaks getting coffie etc.
8 hour day is now 5 hours work time (8 - meeting - lunch - warm up).
Times 80% effeciency = 4 hours ideal time per day.
This your 40 hour ideal will take 80 hours real time to finish.
Kirk : Mr. Scott, have you always multiplied your repair estimates by a factor of four?
Scotty : Certainly, sir. How else can I keep my reputation as a miracle worker?
A good rule of thumb is estimate how long it will take and add 1/2 again as much time to cover the following problems:
The requirements will change
You will get pulled onto another project for a quick fix
The New guy at the next desk will need help with something
The time needed to refactor parts of the project because you found a better way to do things
<sneaky> Instead of inflating your project's estimate, inflate each task individually. It's harder for your superiors to challenge your estimates this way, because who's going to argue with you over minutes.
</sneaky>
But seriously, through using EBS I found that people are usually much better at estimating small tasks than large ones. If you estimate your project at 4 months, it could very well be 7 month before it's done; or it might not. If your estimate of a task is 35 minutes, on the other hand, it's usually about right.
FogBugz's EBS system shows you a graph of your estimation history, and from my experience (looking at other people's graphs as well) people are indeed much better at estimating short tasks. So my suggestion is to switch from doing voodoo multiplication of your projects as totals, and start breaking them down upfront into lots of very small tasks that you're much better at estimating.
Then multiply the whole thing by 3.14.
A lot depends on how detailed you want to get - but additional 'buffer' time should be based on a risk assessment - at a task level, where you put in various buffer times for:
High Risk: 50% to 100%
Medium Risk: 25% to 50%
Low Risk: 10% to 25% (all dependent on prior project experience).
Risk areas include:
est. of requirement coverage (#1 risk area is missing components at the design and requirement levels)
knowledge of technology being used
knowledge/confidence in your resources
external factors such as other projects impacting yours, resource changes, etc.
So, for a given task (or group of tasks) that cover component A, initial est. is 5 days and it's considered a high risk based on requirements coverage - you could add between 50% to 100%
Six weeks.
Industry standard: every request will take six weeks. Some will be longer, some will be shorter, everything averages out in the end.
Also, if you wait long enough, it no longer becomes an issue. I can't tell you how many times I've gone through that firedrill only to have the project/feature cut.
I wouldn't say I inflate them, so much as I try to set more realistic expectations based on past experience.
You can calculate project durations in two ways - one is to work out all the tasks involved and figure out how long each will take, factor in delays, meetings, problems etc. This figure always looks woefully short, which is why people always say things like 'double it'. After some experience in delivering projects you'll be able to tell very quickly, just by looking briefly at a spec how long it will take, and, invariably, it will be double the figure arrived at by the first method...
It's a better idea to add specific buffer time for things like debugging and testing than to just inflate the total time. Also, by taking the time up front to really plan out the pieces of the work, you'll make the estimation itself much easier (and probably the coding, too).
If anything, make a point of recording all of your estimates and comparing them to actual completion time, to get a sense of how much you tend to underestimate and under what conditions. This way you can more accurately "inflate".
I wouldn't say I inflate them but I do like to use a template for all possible tasks that could be involved in the project.
You find that not all tasks in your list are applicable to all projects, but having a list means that I don't let any tasks slip through the cracks with me forgetting to allow some time for them.
As you find new tasks are necessary, add them to your list.
This way you'll have a realistic estimate.
I tend to be optimistic in what's achievable and so I tend to estimate on the low side. But I know that about my self so I tend to add on an extra 15-20%.
I also keep track of my actuals versus my estimates. And make sure the time involved does not include other interruptions, see the accepted answer for my SO question on how to get back in the flow.
HTH
cheers
I wouldn't call additional estimated time on a project "inflated" unless you actually do complete your projects well before your original estimation. If you make a habit of always completing the project well before your original estimated time, then project leaders will get wise and expect it earlier.
What are your estimates based on?
If they're based on nothing but a vague intuition of how much code it would require and how long it would take to write that code, then you better pad them a LOT to account for subtasks you didn't think of, communication and synchronization overhead, and unexpected problems. Of course, that kind o estimate is nearly worthless anyway.
OTOH, if your estimates are based on concrete knowledge of how long it took last time to do a task of that scope with the given technology and number of developers, then inflation should not be necessary, since the inflationary factors above should already be included in the past experiences. Of course there will be probably new factors whose influence on the current project you can't foresee - such risks justify a certain amount of additional padding.
This is part of the reason why Agile teams estimate tasks in story points (an arbitrary and relative measurement unit), then as the project progresses track the team's velocity (story points completed per day). With this data you can then theoretically compute your completion date with accuracy.
I take my worst case scenario, double it, and it's still not enough.
Under-promise, over-deliver.
Oh yes, the general rule from long hard experience is give the project your best estimate for time, double it, and that's about how long it will actually take!
We have to, because our idiot manager always reduces them without any justification whatever. Of course, as soon as he realizes we do this, we're stuck in an arms race...
I fully expect to be the first person to submit a two-year estimate to change the wording of a dialog.
sigh.
As a lot said, it's a delicate balance between experience and risk.
Always start by breaking down the project in manageable pieces, in fact, in pieces you can easily imagine yourself starting and finishing in the same day
When you don't know how to do something (like when it's the first time) the risk goes up
When your risk goes up, that's where you start with your best guess, then double it to cover some of the unexpected, but remember, you are doing that on a small piece of the project, not the whole project itself
The risk goes up also when there's a factor you don't control, like the quality of an input or that library that seems it can do everything you want but that you never tested
Of course, when you gain experience on a specific task (like connecting your models to the database), the risk goes down
Sum everything up to get your subtotal...
Then, on the whole project, always add about another 20-30% (that number will change depending on your company) for all the answers/documents/okays you will be waiting for, meetings we are always forgetting, the changes of idea during the project and so on... that's what we call the human/political factor
And again add another 30-40% that accounts for tests and corrections that goes out of the tests you usually do yourself... such as when you'll first show it to your boss or to the customer
Of course, if you look at all this, it ends up that you can simplify it with the magical "double it" formulae but the difference is that you'll be able to know what you can squeeze in a tight deadline, what you can commit to, what are the dangerous tasks, how to build your schedule with the important milestones and so on.
I'm pretty sure that if you note the time spent on each pure "coding" task and compare it to your estimations in relation to its riskiness, you won't be so far off. The thing is, it's not easy to think of all the small pieces ahead and be realistic (versus optimistic) on what you can do without any hurdle.
I say when I can get it done. I make sure that change requests are followed-up with a new estimation and not the "Yes, I can do that." without mentioning it will take more time. The person requesting the change will not assume it will take longer.
Of course, you'd have be to an idiot not to add 25-50%
The problem is when the idiot next to you keeps coming up with estimates which are 25-50% lower than yours and the PM thinks you are stupid/slow/swinging it.
(Has anyone else noticed project managers never seem to compare estimates with actuals?)
I always double my estimates, for the following reasons:
1) Buffer for Murphy's Law. Something's always gonna go wrong somewhere that you can't account for.
2) Underestimation. Programmers always think things are easy to do. "Oh yeah, it'll take just a few days."
3) Bargaining space. Upper Management always thinks that schedules can be shortened. "Just make the developers work harder!" This allows you to give them what they want. Of course, overuse of this (more than once) will train them to assume you're always overestimating.
Note: It's always best to put buffer at the end of the project schedule, and not for each task. And never tell developers that the buffer exists, otherwise Parkinson's Law (Work expands so as to fill the time available for its completion) will take effect instead. Sometimes I do tell Upper Management that the buffer exists, but obviously I don't give them reason #3 as justification. This, of course depends on how much your boss trusts you to be truthful.
Whilst answering “Dealing with awful estimates” posted by Ash I shared a few tips that I learned and personally use to spot weak estimates. But I am certain there must be many more!
What heuristics to use in the scenario when one needs to make a quick evaluation of software project estimate that has been compiled by a third-party (a colleague, a business partner or an external company)?
What are the obvious and not so obvious signs of weak software estimates that can be spotted without much detailed knowledge of task at hand?
A single person having done the estimates, rather than having used consensus based estimation (to fully understand the implied scope of requirements) such as Wideband Delphi.
Especially true if the person doing the estimation is not the person doing the implementation!! - I once worked on a project estimated by someone else as 60 days before any requirements had even been given. Lets just say I was not a happy bunny
No time for documentation.
No time for ramp-up (in terms of learning, and team size).
No list of risks, and their impact to the timescale.
No buffer for the unexpected - in terms of late breaking requirements, and risks.
No one has said it, so I will. The obvious answer is that if you have software schedule estimates then that is a sure sign of unrealistic figures. Yes, there are many methods for estimating software but none of them are accurate in any way, shape or form. What usually happens is that deadlines are set. If the task is over-estimated then extra time is spent making the result better. If the task is under-estimated then something is sacrificed to meet the delivery (like testing and features).
I know this answer isn’t what people want to believe, but estimating is always a guess. More often than not, a developer can’t even predict how much they will accomplish by the end of the day. You are expecting them to guess things months/years down the road on something that they aren’t even sure what is really involved yet.
The only practical answer to your question that isn’t prone to giving unrealistic results would be using a worksheet that comes up with guesses based on previous history at your company. Unfortunately, that will not account for tasks the estimator missed. At least this may give ballpark numbers.
Unless you develop knock offs of the same exact system over and over again, then anyone who thinks they have figured this out is fooling themselves. There are way too many variables involved.
There are two types of estimates: task estimates and project estimates. You can view these as the big and small pictures.
Project estimates are necessarily high level (granularity no smaller than days typically) and must include things like:
High level architecture;
Time for testing;
Ramp up times;
Defect processes;
Time for documentation;
Relevant training;
Assumptions;
Dependencies (eg team A can't do what they need to until team B delivers phase 1);
Critical path (which pieces are likely to determine if the project slips and by how much); and
Risks.
The more of those things that are missing, the more unrealistic (or risky) the estimates.
The second kind of a task estimate, which is typically much lower level. For this kind of estimate it should be simply a task breakdown (with no task being larger than say 5 days).
These don't tend to address the above items but some of them might be relevant, such as assumptions regarding decisions not made yet (eg production hardware). It may also be worth identifying who can and can't do the tasks due to relevant experience, background knowledge or skills (as that person or those persons may end up overcommitted).
Other posts have mentioned the testing time should equal or exceed dev time. I strongly disagree with this. I've seen 8 hour dev tasks result in 100+ hours test time and 80 hour dev tasks result in less than 2 hours of testing. In both cases the testing time was entirely reasonable. The is no absolute correlation between the two. At best, there is a loose connection.
Is the estimate what the management
wanted to be told?
Does the
estimate nicely fit in with the
planned shipment date for the next
release?
Does the management reward
people that give good news more then
people the give bad news?
Was the
estimate prepared before knowing who
would be working on the project?
Did
someone that wanted that bit of
functionally implemented prepare the
estimate?
Is there a history of
software being late?
Is it normal for
developers to be moved onto other
tasks partway though a project?
Have
some or all developers given up on
commenting on bad estimates as a
waste of time?
Count up the number of questions you get “yes” or “maybe” answers.…
If you get mostly “no” answers to the above questions, then it may be worth looking at the estimate in detail to see if it includes the tasks that other people of listed in this thread.
Wow... I really like toolkit's answer.
And I agree that any estimate at all is flawed, because it assumes that the estimator has way more of a clue for how to solve the problem than any estimator actually does when a project gets estimated. However, I think you still need to at least estimate the size of the mountain before you start. Some thought as to whether it's worth trying to do it should precede any endeavor and that's what the essence of an estimate should be.
I did come up with a few more indicators of a dangerous estimate:
No cross-reference - If the estimate can't be validated at least two different ways, it's likely to be unreliable. For example, the last estimates I've done I've been able to break down the work into small feature chunks, and consider how long it's taken our team to do similarly scoped features. Then I was able to look at the sum of these costs and see how big the scope was relative to other projects I've worked on. That's two ways to validate.
The background of the estimator - if this is a software estimate done by a hardware guy who's never written code - be very afraid. More subtle - the closer the estimator's background is to the technology and problem domain of the project, the better.
Detail - as said a few different ways in a few different posts - I like to see detail for both individual features, as well as the tasks needed to complete each feature. Most estimates I see don't show the detail in the formal presentation, but if you ask the person who did the estimate, they should have a file somewhere. Hopefully it's not the back of a paper napkin stained with beer and ketchup. :)
Documented Assumptions - any estimator will have had to make some set of assumptions about the task. These should be documented somewhere, perferably in the formal paperwork. I always get a little worried when I see a short proposal with not many documented assumptions. Either they were thought through and not communicated to the customer, or they were not thought through. I'm not honestly sure which one is worse. It goes without saying that the assumptions should also be reasonable.
Balanced Lifecycle - However the task is broken down, what's the ratio of design, code and test? How about documentation, integration with external systems and post release support? How about those extra things that are so vital (system admins, CM gurus, management effort)?
Slack - I'm sure the corporate daemons of cheapness will come and flay me, but a schedule and a cost should have some slack. If the estimate looks ambitious and agressive to an experienced eye, it is likely to be too low. Estimates are almost never too high.
One good heuristic is to see if test time is roughly the same a development time. That's a good sign for the estimate.
If they can't give you a breakdown of the estimate then that's a bad thing. Usually a sign of lots of little things that may have been forgotten. They don't need to provide the complete original breakdown, just a breakdown like:
requirements
development
testing
packaging and deployment
etc.
They should be using a standard template to calculate their estimate. They don't need a number in every column, but they do the template to list all possible tasks. That way the template can be used to jog peoples's minds when working on the estimate.
If the estimate is overly precise, e.g. 0.25 hour increments, then that, for me, is a bad smell.
If there are things missing like requirements capture, testing, deployment, and handover to any Ops group? If any of those are missing, that's the sort of thing that will come back and bite you.
Edit: One other thing to watch for is the old "perpetually 90% complete" tasks. You get progress update after progress update listing a task as "90% complete". That's not good!
HTH
cheers
Is the compiler of the
estimate available and willing to
discuss it with other senior project
members? If not, that is often a
concern.
Was the estimate sent to the
customer before the experience and
skills of the development staff are
known. Two point estimates may help
but only to some extent.
Before even getting a chance to look at the estimate, you are told that you are committed to delivering all of the functionality described by a specific date.
(Thanks for responding to my question, by the way.)
If you see one or more of these, you may have a bad estimate:
Single point estimates: an estimate should be associated with a range of possible dates or a confidence value
Insufficient granularity of tasks: a large task bucket usually indicates that the functionality is not well understood (which is especially a problem since poorly understood problems are usually under-estimated)
No expression of assumptions and/or risks
Inadequate effort allocated for commonly skipped or underestimated items (e.g. build scripts, documentation, deployment, etc.)
I agree with sateesh, I really like Software Estimation: Demystifying the Black Art by Steve McConnell. He has several checklists which are useful when reviewing and/or preparing estimates.
I totally agree with Dunk, the first sign of bad estimates is the mere presence of a large detailed upfront schedule. Estimates are exactly that, an approximation, otherwise we would call them exactimates. So they should never be used alone in the management of a project.
The most important point to consider is not the accuracy of estimates but the consistency. If a third party were doing estimates for you, then ask to see a history of their successes or failures, speak with their past clients and determine their reliability.
That all being said, from an Agile standpoint, some of the ways we attempt to gain more consistent estimates during a project are;
Use a relative sizing standard (S,M,L,XL) rather than time based (ideal days).
focus on complexity not time
Always use group estimates not single person estimates
Gather estimates frequently throughout the project, generally at the start of each sprint
use feedback from previous sprints in determination of story complexity
track velocity to give meaning to the relative sizing
frequent and early story retrospection to examine/understand any thrashing
If you are dealing with companies that use these estimation methods then, chances are you are going to receive consistent and therefore better results.
Estimates of the form 3, 6, or 12 months (basically any round numbers) reek of guessing. Usually when you guess you pick some round number bigger than you think it will take -- quarters, half a year, etc. -- are the usual suspects. I much prefer estimates in terms of actual development iterations (whatever their size).
What are the obvious and not so
obvious signs of weak software
estimates that can be spotted without
much detailed knowledge of task at
hand?
Estimates which are given without much detailed knowledge of the task at hand are generally not good.
Perhaps a general approach you could take is to check that items in the requirements correspond to those in the estimate. If you want to be very quick check the relative sizes, if there is a 100 word estimate given to a 100,000 word brief it stands no chance of being right.
Also (as others have said) check that analysis, coding, debugging, testing, integration, contingency etc are mentioned. It shows some thought has gone into it.
Having success and sign off criteria at various stages is a great sign. If they have a defined point which is 10% done at least if the estimate is wrong you know early and have a chance to adapt. If there are no checkpoints until “finish” you may not know that you are behind until that date is hit.
How familar is the person giving the estimate with the people doing the work?
I have often seen estimates where there is a generic person doing the work, even though the team is made up of individuals with very different backgrounds. Most likely the tasks and the specialities don't line up perfectly and you get a c++ serverside programmer who ends up doing either your gui or your database... Sometimes the manager of the team doesn't really appreciate the team member's strengths, so if he has been asked to come up with the estimate on his own because his team is busy on the previous project you will find that the work in question is really only suitable for part of the team (not motivating, lack of skills etc)
One other helpful way to evaluate the estimates is to compare it with the actual effort that was spent on previous projects of similar kind. The best data for the comparison would be the effort data of the previous projects that the organization has done. If there is no organizational historical data you can try to benchmark the estimate against industry wide benchmarks.
I would also say if the estimate is presented as single absolute number (say 180 days) then it is not a good sign. A single absolute number would indicate that the estimate is that the task will be finished with 100% probability on the given data. The estimates presented in a range (say 130 to 180 days) would indicate that the range in which task could be completed.
Much of what I have written above I attribute it to the book :
Software Estimation: Demystifying the Black Art
by Steve McConnell
I check the estimates against the man-power. Although not a very accurate heuristic, it's clear if some massive work has just one or two devs assigned to it, that the task was not estimated correctly
A good estimate will have a good breakdown, involving all phases of the project.
It will almost certainly not finish at a convenient date for the business.
It will include risks of various sorts.
It will be presented in terms of confidence intervals, either implicitly (10-12 months) or by using large units (about four quarters).
It will be made by somebody with responsibility for getting the project done, preferably more than one such person.
If there are delays at the start, there will be delays at the end (expressed as 10-12 months from start, or about 1Q2010 if we start now, not something like January 2010 when the project hasn't started yet).
Assumptions and dependencies will be clearly and prominently listed.
Edit: Part of this depends on the stage the project is in. An early but precise estimate is a warning sign, particularly if there is no confidence interval assigned. That reeks of a Procrustean estimate.
Also, watch for other development methodologies. A timeboxed project can have a rigid and arbitrary schedule, but the feature set will be flexible.
Any of the following:
It is one big project and there isn't a short high level strategy described
There isn't a clear, short and concise vision of what wants to be achieve with the project
The project isn't structured around business value being delivered gradually
The team is trying to give "accurate" estimates for a big project, going into (or was done with) a long analysis phase? (changes will come, and will usually affect those estimates in way that can't be easily quantified without yet more big efforts)
There are "detailed" estimates for the whole project (related to previous)
There aren't detailed estimates for the first phase, or there is something wrong in those.
"Four to six weeks", when not accompanied with a breakdown into shorter tasks...
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My firm just got its first large-scale development project inquiry and I would like to use an Agile process. The client has a vision for the application but openly admits to having very few requirements and recognizes that we will have to charge by the hour. Because of this, I've all but sold him on an Agile approach.
The problem is that he wants a figure to budget around. I've read a number of articles that pretty much advocate against giving up an estimate because the client will budget for that number and even as requirements change, the number in their head and in the books doesn't.
I've read there are a number of ways to factor in pricing in the contract, but almost all of them (save one) incorporate an up-front number. This just seems to violate the entire set of principles of Agile development.
So my question is, if you're an Agile shop, how do you manage to circumvent this Catch-22 of Agile development?
Here's the fundamental question.
When will the client think they're done?
If they think they'll be done by June, then you put an Agile team in place. That's 4-6 people for 6 months. That's the budget. Essentially, you do the multiplication for them. team * rate * 6 months.
If they think they'll be mostly done by June, but there will be more work after that, then you're possibly looking at 9 months of work. Again, you're just doing a multiply that they could do for themselves. team * rate * 9 months.
If they think that you'll be their development team for the foreseeable future, give them a price that will get the project through to the end of the year. team * rate * 12 months.
Since each release is an opportunity to reprioritize, you should be pricing each release as as separate piece of work based on the things you will get done in that release. Since it's their priority scheme, they control what you build, they control the budget, phase by phase.
Often your client really wants to know how much a particular feature set will cost. Instead of ask that, they ask about overall budget (which is silly). Spend a lot of time on the first release showing what they get and how much that first release will cost.
Eventually, they'll see the fundamental truth.
They're buying the features from most important to least important. If they prioritize correctly, they can stop spending money at any time and have something useful.
Done is a relative term. Some projects are "done" because there's no more money. Others are done because there's no more time. Rarely (at least in software development) is a project ever done because we ran out of things to do.
For this situation, we've provided an estimate for the first chunk of work, and then let the client purchase more sprints as required to complete the work to the desired level.
As you get more of the system developed, and incorporate feedback from the client into the sprint deliverables, you will both get a better feeling for the amount of work involved, and hence the costs involved.
Edit: Cool. Way excellent! From the fact that you've sold them on an Agile approach, BTW good one!, chances are you will be able to seel them on approaching it from an agile point of view in terms of features to be implemented. Maybe have a listen to this "Intro to Scrum" podcast. You might be able to sell them on the fact that they probably won't need to have all the bells and whistles that they think tha they need right now.
HTH
cheers,
Rob
Look, there's a core fact here. You will be asked to estimate cost, contract for a particular delivery date, and commit to a full set of delivered features.
You can't do all three.
Not "you shouldn't" or "it would be wise not to"; you (for all practical purposes) can't. By which I mean that the probability of successfully doing all three is extremely small.
The best answer is to commit to a cost and schedule, and to an iterative process with quick iterations and regular feedback, and then write the agreement so that what is done unde the fixed cost and schedule is what will be delivered. That is, you keep delivering new features (and modifications) until the time and money runs out.
The truth is, even if you do sign up to all three, the best you'll ever be able to do is two out of three anyway. Might as well be open about it.
Here's how a crusty old government contractor I know recently put it: "As the prostitutes say, first you gotta get them upstairs."
That doesn't answer your question, but it's worth remembering. If they won't come upstairs without number up front (and they won't), you have to give them a number.
Anybody sponsoring a software project needs to have an idea of what kind of return they're going to get on their investment, so that they can evaluate whether or not the investment is worth making. A project may be worth doing if it costs $1m and takes 12 months. It may not be worth doing if it costs $2m and takes 24 months.
The real question is: can you do this project within a time frame and budget that makes it possible for the client to realize an appropriate return on their investment? If your answer to that question is anything but "yes," then they shouldn't hire you to do the project. Otherwise, they're just spending money and rolling the dice.
If your current answer to that question is "we don't know yet," then they shouldn't hire you to do the project. But that doesn't mean that they shouldn't hire you to find out whether or not the project is worth doing. A good consulting-firm buzzword for this is "preliminary scoping exercise."
Agile development is about managing a curve in three dimensions: money spent, calendar time, and feature set. It's a given that if the budget and schedule are fixed, the feature set must be variable. You can't know what the final feature set will be, given those constraints. But you can know if a feature set that you'll be able to produce within those constraints falls inside a range that your client will find acceptable.
You can know this, and you can find it out. Finding that out is something that your firm can do and your client can't. It's a service that you can provide to them and that they should pay you for. Avoid the temptation to do this for free and call it a cost of sales. Project scoping is every bit as much a part of professional services as software development. You're not doing this to close a sale; you're doing this to help your client make a business decision that they don't yet have enough information to make.
But first you gotta get them to come upstairs.
These answers are really great. I don't have a lot of experience to share, but I thought of an analogy:
Last year my wife and I remodeled our kitchen. The contractor proposed billing on time & materials instead of giving an estimate, because we didn't know what we'd discover with respect to plumbing, subfloor damage, and so on. We agreed, because I'm working from home and I was available continuously to answer questions. The contractor and I had a good rapport so when something came up, he felt free to knock on my office door and we'd discuss it. Decisions got made quickly and the work was done the way I wanted it. That seems similar to the Agile priority on frequent customer review.
By contrast, my wife's cousin is also remodeling his house. He's an ER doctor and he is not available on site during the remodel. So he described being regularly surprised by the contractors making major decisions without consulting him ("What? I didn't want that picture window blocked off! Tear out the wall and reframe the window the way it was!"). This is of course painfully expensive and blows the schedule out of the water. Definitely not Agile.
So one way to convince a client that a time & materials mode will work may be to assure them you'll make frequent progress reports to get their feedback. I believe this is already a core recommendation of most Agile methodologies. To begin, of course this requires the customer give their trust to the consultant.
As a separate resource, I searched and found a book on this subject: "Agile Estimating and Planning" by Mike Cohn. Read the praise quotes on that page, from an impressive set of Agile experts.
First of all, I want to say I think it's great you've sold him an on agile approach and per hour pricing. That's very hard to do.
Regarding your dilemma, I think you should present him with a rough pricing estimate and the features / scope it includes. During the development process, if you see something important coming up that will change the scope / cost, you say to the client "stop - this is great, but understand that it changes the original scope we discussed."
At this point the client has the privilege of agreeing, being aware that he will pay more than he originally thought, or halting the new development for now. Many agile projects are built in many mini-stages - for which you can give pretty accurate estimate of price / time. Before any new mini-stage commence, it's important that you and the client see eye to eye on what is up next and how much time / cost will be spent on it.
As always there's quality, functionality and time (=resources) which are your main parameters. We're not messing with quality any more, so there's only features and resources left. Fairly often you can get away with convincing that a certain amount of resources will at minimum reach a certain feature set. So as long as you can find an amount of resources that delivers a plausible feature set I believe this is enough for quite a few customers. The upside is that they can control progress while on the move, and there's always the option of backing out.
The way that I have done this is to use my current velocity and estimate a range based on rough estimates of complexity (number of stories). You would update this as you begin planning the application so that the range estimate gradually becomes better and better.
For example, give an estimate from 6mos to 2 years (if you're sure that it will take less time than 2 years. As you break it down into features, then plan for those features, you come up with better and better estimates so that after 6mos you can reliably say (absent any other changes), we'll be done in another 2-3 months (total of 8-9 months). Eventually, you get to the point where you can say, we'll be done after the next iteration (2weeks to 1month).
You need to pair this with letting the customer know that adding features will increase the time to completion, then let them decide how to proceed -- either drop the feature or increase the time. For any given project, scope and time are really the only variables that you can effectively change. Quality and resources are pretty much fixed. Actually, you can add resources, but generally you see an increase in time and decrease in quality initially so this only works if your time horizon is long.
One approach you could take is to give the client a general estimate that you believe is relatively close. Also give a percentage. The percentage will be an increase or decrease allotment in the budget due to changing requirements.
Example: General estimate of $10,000 but since the requirements are vague and the project could change course easily there is a +/- 30% price adjustment option.
This way the client can have a general idea of what to budget and you have some flexibility in charging to the project.
This is a really tough issue. See what Robert Glass has to say on the subject in his book "Facts and Fallacies of Software Engineering". (Note that Amazon has books available new for less than they're available second-hand! [as of 2009-01-05 12:20 -08:00]; also at Google books.)
If you have successfully sold the customer an on Agile approach, and billing by the hour, do not give them an estimate for how much it will cost to complete the project!. Even if they say they want it only for budgeting purposes, do not do it!.
The reason is that any estimate of cost will come to be treated as a definite commitment; no matter how many times you say it isn't, and how many times the customer says they understand that, it will be treated as a commitment. Even if the customer understands, their boss won't, and although they won't be able to legally force you to deliver for the price you said, you will come to known as a company that doesn't deliver what it promised. Providing an estimate throws away all the advantage of being agile in the first place.
What I suggest is telling them that you will spend no more than such-and-such an amount before the end of the financial year (or whatever other billing period your customer is interested in). That should be enough for them to plan financially without in any way saying that the project will be finished by then.
This was my answer to a closed question related to story points. I use this all the time for macro estimation.
When I switched to points, I decided to it only if I could meet the two following points; 1) find and argument that justify the switch and that will convince the team 2) Find an easy method to use it.
Convincing
It took me a lot of reading on the subject but a finally found the argument that convinced me and my team: It’s nearly impossible to find two programmers that will agree on the time a task will take but the same two programmers will almost always agree on which task is the biggest when shown two different tasks.
This is the only skill you need to ‘estimate’ your backlog. Here I use the word ‘estimate’ but at this early stage it’s more like ordering the backlog from tough to easy.
Putting Points in the Backlog
This step is done with the participation of the entire scrum team.
Start dropping the stories one by one in a new spreadsheet while keeping the following order: the biggest story at the top and the smallest at the bottom. Do that until all the stories are in the list.
Now it’s time to put points on those stories. Personally I use the Poker Planning Scale (1/2,1,2,3,5,8,13,20,40,100) so this is what I will use for this example. At the bottom of that list you’ll probably have micro tasks (things that takes 4 hours or less to do). Give to every micro tasks the value of 1/2. Then continue up the list by giving the value 1 (next in the scale) to the stories until it is clear that a story is much bigger (2 instead of 1, so twice bigger). Now using the value '2', continue up the list until you find a story that should clearly have a 3 instead of a 2. Continue this process all the way to the top of the list.
NOTE: Try to keep the vast majority of the points between 1 and 13. The first time you might have a bunch of big stories (20, 40 and 100) and you’ll have to brake them down into chunks smaller or equal to 13.
That is it for the points and the original backlog. If you ever have a new story, compare it to that list to see where it fits (bigger/smaller process) and give it the value of its neighbors.
Velocity & Estimation (macro planning)
To estimate how long it will take you to go through that backlog, do the first sprint planning. Make the total of the points attached to the stories the teams picked and VOILA!, that’s your first velocity measure. You can then divide the total of points in the backlog by that velocity, to know how many sprints will be needed.
That velocity will change and settle in the first 2-3 sprints so it's always good to keep an eye on that value