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How do you charge your customer in a project using agile methodology?
Per hour? Then a great deal of trust has to been established before the project.
Per iteration? There's gonna be a lot of budget decisions, which can take time.
Per project? How can you do that when you don't know the scope? The very essence of agile is to not write a big upfront design/specification.
You charge your customer on the base of the terms defined by your contract that will be slightly different from a traditional fixed bid contract. Let's call that an Agile contract.
Some options are discussed by Alistair Cockburn in Agile contracts.
Another great resource is 10 Contracts for your next Agile Software Project by Peter Stevens.
Mary Poppendieck also has great material on this topic. See agilecontracts, agilecontractsworkshop, Contracts Excerpt From Lean Software Development, Lean Contracts. More here.
Short answer is, you won't. There are a few services companies that are making headway doing it, but it is a difficult path. Your ability to sell the methodology and convince the customer you can deliver will be high.
Customers don't want to risk paying for a solution that will never be delivered.
Typical approaches to this problem are to put "will not exceed" cost. However, if you can't control scope, you are the one taking all of the risk.
In short, you are looking for customers that would have signed up for T&M (time and materials) contracts before Agile became the latest fad (I'm part of that fad, but it is just one in a long line of development processes. Aspects of it will continue to grow and some permutation of it will have a different name in a few years).
If your customer has already bought into the use of an agile methodology, then you have a reasonable framework for negotiating price per iteration. For example, you know:
How long the iteration will be.
How many people will be committed to work on the iteration (and their rates).
An approximate scope of work.
A process for delivery and acceptance.
That's a lot more evidence on which to base pricing decisions than is available for most fixed price contracts.
If the agile methodology is purely an internal development process that doesn't involve the customer, then it's unlikely to have much effect on the pricing negotiation between the supplier and the customer. There is an argument that says that a process that doesn't involve the customer in setting scope and expectations at least once per iteration isn't agile at all.
Regarding Mark's comment, there is a very common pricing model based around fixed price contracts with loosely defined scope and optimistic schedules. A common outcome is that both supplier and customer find that their initial optimism was misplaced. Both end up negotiating from weak positions over the things that really matter to them, and both end up unhappy.
Some of the techniques that work well in managing this type of contract are very similar to those used in managing agile contracts (frequent delivery, horse-trading on scope, priorities & price, frank communication, ...) the main difference is that these aren't built into the original agreement, and the contract may not be flexible enough to accommodate all of them.
My 2c as a non-agile practitioner...in a quest to know more...
If you are doing a specific project for a customer, you will need to know the scope of the project to provide a cost and a timescale. The cost of producing this scope of work is more often than not part of the discovery of the project, you either take a hit on this to get the work or charge for this (explicitly or implicitly) In this case, a project cost can be worked out and agreed. Im this case the project is usually broken up into various stages.
Although agile may be iterative and not require a full specification; a goal, at least is certainly required. There must be some form of basic specification/requirement. It may be that you need to break the project up into smaller goals and apply costs accordingly.
The iterations I suspect are more to do with the development methodoology, ie to achieve the goals?
If there is not enough specification to produce a definitively accurate cost, I would say that a "estimate" should be given but work should be charged at an hourly rate as I would assume that there would be greater changes in the decisions made on the project over each iteration.
I've seen it work well when approached in 2 phases:
Phase 1) Inception (timeboxed)
A timeboxed inception period with the client to scope the project. (A one month intense inception for a project estimated to last a year is about right.)
Outputs to this phase are a full backlog of sized user stories, an estimation of flow rate per dev pair, and parameters to estimate project costs based on the number of developers and overheads of having larger teams.
The inception provides a useful budget estimation that can be tracked throughout phase 2, a clear shared vision for both client and supplier, plus the option for either side to walk away. This isn't upfront design, the stories have just enough detail for a lead dev / tester to assign relative sizes.
Phase 2) Delivery (time and materials)
A delivery contract based on time and materials, with budget estimates based on the outputs from the inception phase. The trust built up in phase 1 is vital to making this work. Because phase 1 delivered relative sizing of the entire backlog, by regularly measuring actual flow it is possible to easily and frequently report projected flow rate for the rest of the backlog with increasingly accurate estimates of budget and delivery date. The supplier should be contracted to report these stats at least every 2 weeks, with the option for the client to walk away at any point.
By paying for time and materials, the client is free to change the scope and proirity of the backlog, and is therefore in control of the budget. They are encoraged to prioritise their highest priority / highest risk stories first, and by allowing them to walk away whenever they like they should experience a positive return on investment at all times.
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I recently interviewed with a company which has started introducing Scrum for their development cycles. I asked one of the developers how their experience has been, and it sounds like they are completely divested from the planning process. He wasn't allowed any input as to what went into a given Sprint, and didn't participate in any planning or grooming activities.
Basically, at the start of the last Sprint (or two) he was handed a to-do list. He had to breakdown items into their respective tasks (so they could be worked on over the Sprint), but wasn't involved in any planning activities; I'm skeptical he was allowed much input into how much effort an item might take -- I suspect the architects decided this for the team.
Is this how Scrum should be handled? My current team fully participates in all planning activities, continually adding our input as to how features may be addressed and how much effort they might take. I'm a bit skeptical (and nervous) about a company which simply hands developers a to-do list without asking for their input.
Note: I understand that once a Sprint starts, the list really is a prioritized to-do list. My concern is not having input into the planning process from the start.
If those who are doing the work don't get to give input saying what amount of work can fit into a sprint and let the business decide whats most important and should be scheduled to fit. Its not going to work run away. They are using new trendy agile words but doing the same old things.
(...) He wasn't allowed any input as to what went into a given Sprint, and didn't participate in any planning or grooming activities.
Obviously, they're still doing command and control and micro-management (the team is not empowered and self-organizing) and they are still using push-based scheduling (they didn't enable pull-scheduling).
Scrum has other characteristics but the above points are more than enough to say that they aren't doing Scrum, regardless of how they name it, they didn't really shift from the outdated waterfall approach (they just did put some lipstick on the pig).
This is a big hint that they're still totally clueless about what Scrum is about, they didn't get it at all. And this is not going to change without some inspection and adaptation, if they even want to change. If you don't have the power to make this happen, run away.
Is this how Scrum should be handled?
No.
I worked at a place that called themselves agile. They had 6-8 month release cycles. Some things came from a backlog, but during the "Requirements Gathering" phase, basically the managers would spend a week or two meeting with various people in the company, and write up a feature list. The first day of each 4 week "iteration", the dev team would all get together and break down everything in a series of meetings. The last day of the iteration was deployment day, where there would be an intrim deployment that nobody outside of the dev team ever saw.
During the 8 month release cycle, the managers would touch base with the stakeholders maybe once or twice in the last two months of the release, at which point the only issues raised in those meetings that had a chance in hell of getting done before release were issues that were bad enough to make the whole effort useless if they were not implemented.
This is not agile, this is a variant on waterfall with a poor choice of ideas and methodologies cherry picked from other methodologies. At the end of the day, it still has all the same problems that waterfall does.
The lesson I took from my employment there is that development methodologies include things for a reason. If you are cherry picking from a methodology without fully understanding it (and by fully understanding, I mean having actually worked with it), there is a high chance that you will not use something that is actually vitally important to the whole thing. For example, in xp, kent beck advocates relying on refactoring later as a way to cut down on up front design. However, the only reason this actually works is that he also advocates TDD and pair programming. If you have a comprehensive test suite and an extra set of eyes there for the whole thing, refactoring is fairly safe. If you just cherry pick the first part and leave those two out, you are essentially cowboy coding.
I am extremely skeptical of shoppes that roll their own methodologies for this reason. There are an absolutely shocking amount of crimes being committed in the name of agile.
Is this how Scrum should be handled?
Definitely not. Scrum strives to increase transparency. By blocking developers from planning activities, they are doing the opposite of what scrum suggests.
You talked about 2 points here:
1. Sprint Planning - The Scrum Team members should be Definitely required here.
2. Backlog Grooming - May or may not be required here. You have to use your resources wisely and with common sense. One team member with strong developer background would be okay here I think.
There is one more type in Scrum:
Release Planning - Some might say developers are not needed here. But as per the Scrum Guide - "Release planning requires estimating and prioritizing the Product Backlog for the Release". Well prioritization can be done by the POs and suggested by the stake holders, but estimating would be most accurate if it is done by someone who is actually going to do the work, so it is a good idea to involve developers here. Again, resources should be used wisely. If it makes sense to not involve all developers and have people rotate turns to estimate, that is not a bad idea.
I suggest follow this structure:
Sprint Planning - part 1 : Estimation and pulling backlogs in Sprint from product backlog (PO, SM and Team are pigs here)
Sprint Planning - part 2 : Tasking, estimating task hours and breaking them down. (SM, and Team are pigs, PO is chicken here unless PO is taking tasks as well)
It is up to the team to figure out, during the sprint planning meeting, how it will turn the selected product backlog into a shippable product functionality. If they are not part of this process then they would not be able to commit.
The answer to your title question is: Developers (team) must participate in planning meetings. Planning meetings are for developers (team).
The good approach is to have two planning meetings at the beginning of each sprint: Planning meeting 1 and Planning meeting 2. In Planning meeting 1 Product owner gives prioritized (and size estimated - size estimation is not done on planning meeting) product backlog to the team and team starts to discuss most prioritized user stories. For each disucssed user story team should be able to collect:
Detailed requirements (for example which fields the input form has to have ...)
Constraints (for example how fast the functionality has to be)
Acceptance tests (verification of results)
UI sketches (for example how should UI flow looks like)
Acceptance criteria (validation from end user - acceptance criteria doesn't have to be real test. It can be something related to "easy to use" etc.)
There should be time boundary for Planning meeting 1. Number of user stories you were able to discuss can correspond to number of user stories you will be able to complete in upcoming sprint. At the end of Planning meeting 1 team must make commitment - say how many of discussed user stories will be done in upcomming sprint. Sprint planning meeting 2 is only for team because team further discusses user stories and breaks them into tasks.
Generally, of course they should. Obviously, it's never realistically possible to the degree that developers would like. However, if sprints are usually "Hair On Fire" type affairs, where the developers get no serious input at all... then at the very LEAST there should be regularly-scheduled "entropy reduction" sprints, where all tasks are selected exclusively by the developers for the purpose of cleaning crap up.
At least some developers need to be there so work can be properly estimated and pipelined.
But not all developers need to be there. All can be there is it makes more sense.
On the other hand, developers need to understand that the business priorities are the priorities, no matter what they think should come next. Everyone has to work together ot make it work.
I'm not so much worried about my input, but about my insight. I recently was involved in a project where I had no knowledge of the project before the plans were handed to me supposedly complete. The nightmare started when I discovered that the process was not completely thought out and the data definitions were not complete. I wound up having to go through the whole process again to get the answers that I required.
The Team can be involved in the planning process without a formal process or meeting. The planning process is really very fluid. At the start, the goal should be to get to starting sprints ASAP. Spending too much time in planning before the first sprint feels very waterfall and is a waste of everyone's time. I, as a team member would feel relieved to not be a part of that, except for the fact that it indicates a dysfunctional nature to the organization. The Team should always be free to voice ideas on an ongoing basis (since that's when the real planning happens). But, 2 things you mentioned concern me most.
First, the Team should be the only ones to determine how many backlog items they can do this sprint. They certainly would be involved in estimating the effort. That's a big problem.
Second, the Team does not sound like they have access to the product owner (maybe there ins't even one here). Even if the team has not been involved in the "planning" thus far, surely if I were talking to the product owner in the planning meeting, or had access to them at other times, I would voice suggestions over time.
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We are in the process of developing an new product and implementing Agile, specifically Scrum. Our first sprint was planned conservatively, but we are going to miss our target by quite a bit. The main cause being interuptions and new clients throwing in last minute requirements that we had stop and react to.
To be able to help identify our weaknesses and also so I can get some fodder together for a retrospective of our first sprint, I am interested in hearing about companies developer head count versus user head count. Is your ratio/mix a successful one? Only for internal development, not software houses or tech companies. Any opinions on the subject are also welcomed, I think it could open an interesting discussion.
The main limiting factor is always budget, so there is no need to include that in any opinions.
Don't be too upset with failing your first sprint. It is rare to do anything 100% the first time. Most first sprints reveal problems that have to be fixed - just as it was in your case.
Your problem has nothing to do with the users / developers ratio. Your problem is properly insulating your sprints and making sure the basic Scrum deal (no scope changes mid-sprint, all scope changes between sprints) is adhered to. Things to do:
Make sure everyone understands Sprint Backlog can't be changed between Sprint Planning and Sprint Review. If anyone tries to force this play by the book: do abnormal termination, throw away all the work work, plan a new sprint and make all of the fuss about it. The reason Scrum calls for this is to make the cost of interruptions and scope changes highly, painfully visible.
Shorten your sprints. Two week sprints worked very well for us because it was pretty easy to explain to any manager type that he can wait 2-3 weeks for his feature. Our PO got pretty good at this eventually.
If for any reason you have short fixes / features that can't wait two weeks institute a "firefighter" - devote one developer per sprint to handling such issues, don't plan any regular work for him. To avoid burnout make it a rotating function - someone is the firefighter each sprint. Hey, you could even buy them a firefighter hat. :)
We did 1 & 2 after our first sprint (way back in 2007) blew just like yours. It helped a lot, so we didn't have to do 3. I advised 3 to a team that had such need and it worked pretty well.
If you allow new requirements during a sprint for this sprint, you're not doing scrum.
The only thing I would allow, are critical bugs in producitve software. These have to be fixed. Here one would allocate one or two devs per sprint who are responsible for bugfixing, if the need arises.
Too many users is not (should not be) a problem. The developer to user ratio depends on the type of the product and the industry/domain, not on the methodology. Small shrinkwrap products (developed by a minimal team, or even a single person) can have millions of users (e.g. Total Commander), while huge internal enterprise products developed by a team of hundreds can have half a dozen users.
The problem is rather that apparently your users are not familiar with Scrum, and you are not using a single product backlog (or haven't taught your users about it).
You should have a single product owner, who decides about what gets into the next sprint, at the start of the sprint. Last minute change requests are (ideally) not allowed - they can only get into the next sprint. It is the product owner's responsibility to communicate with the users, collect and evaluate feature ideas/requests, prioritize them, and OTOH communicate these towards the dev team. In other words, users should never ask features directly from individual developers; they should turn to the product owner instead.
The essence of scrum sprints is that you can't interrupt them with last minute requirements.
Regarding the ratio you are talking about, it depends greatly on what your product is, in which industry you are, and lot of things like that. So to make this value useful, you will have to experiment a bit.
But your developers should rely on your product owner, and not your user base (regardless its size).
Sprint is safe zone. At the beginning of the sprint team discusses product backlog items with product owner and selects subset of these items to be done in upcomming sprint. Team commits to these items. It is team responsibility to deliver commited items so no one can introduce new items during the sprint except the team (this usually happens when items are developed faster than was expected).
Each SCRUM project has to have one Product owner (if there is more than one, there has to be hiearchy) which is responsible for product backlog. If the product owner demands new items during sprint the only way to do it is to cancel current sprint and start the new one.
Possibly a more meaningful ratio would be developers : features/projects. If a manager commits all available resources to a sprint, then there is a higher probability that you'll need to interrupt at least one of them for a critical support issue (for instance); it's a slippery slope to things like "well, you're ahead of schedule, so can you slip this extra functionality in", at which point you've broken one of the core principles behind SCRUM.
I get the feeling you're about to start a campaign for more headcount in your department, to relieve pressures on the current team; perhaps a better long term approach would be to manage expectations of your customers (be they internal or external), so that your existing headcount remains flexible to jump in and handle interruptions; at the same time they can manage expectations that additional requirements get deferred to a later sprint.
developer head count versus user head count
I'll probably get downvoted for that but I think it is largely irrelevant.
There are fantastic products built by a couple of guys serving millions of users.
Just as there are projects developed by a huge strike force which never crossed the threshold of mediocrity.
User head count / dev head count is not a relevant metric.
You can have a single user that generates huge amounts of change versus hundreds that don't generate any (of very little) change.
What is relevant is the amount of change being requested and how it is managed and tracked.
If you can show how much the requirements have changed while still implementing and designing for other requirements you will have your fodder.
One of the biggest mis-conceptions about any Agile methodology is that you can make it up as you go along.
And although this generally true, the key thing is project management and communication.
Like a lot of things in life you can do anything, but there is a consequence. If I buy a Ferrari can I afford to eat?
If I ask for an extra bit of functionality how much is that going to affect the project.
So during planning
MoSCoW (Must, Should, Could or Wont) requirements
Estimate how long it will take
You cannot fill a Sprint / Timebox with Musts or Shoulds
During the sprint / timebox
Monitor the time it takes against Estimates
Re-plan
When an interruption occurs. Log it and feed this into the Time Taken requirement. Next set of estimates include and interruption factor. Estimation within Agile is an Artform!
When changes are asked for
Estimate how long it will take, compare with original estimate
Inform the Business User of the effect
Prioritise within the MoSCoW
Communication is important. If you want me to add that button there, I will not be able to print the invoice.
Because of MoSCoW it maybe that in sprint 4 the item which is a Wont might make it's way up to a Should or a Must.
Also treat Agile as a toolkit you do not need to prescribe to SCRUM or any other methodology pick the important bits which work for the culture you are in.
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Summary
We are start up and we provide software development services. We develop windows, web, services and mobile applications. We were aware of agile and we are scrum certified developers . We do user story based estimation and task planning. No issues.
Issue
We are approached by many small customers. Customers says very high level features or few words about the concept of their dream project. They asks for Effort Estimation and Cost Estimation. Mostly they are interested in Cost.
For each customer we did create the user stories and estimated the user stories and based on story points, we estimated the effort in days and we convert the days to the cost based on hourly rate. We involve the team of 3 or 4 people and get the estimation done. We spend at least 20 to 30 hours of team total time for estimation. (Team of 4 discussing for 5-6 hours)
The problem is that many customers would never turn back. We do not want to spend 20-30 hours of team effort. We don't want to use the exact user story estimation that we follow for contract signed project.
Question
What could be done in order to provide approximate estimate for small customers with small business?
I don't know there is a solution, other than to find 'better' customers. It sounds like you're doing it right to me. Non-technical customers often want you to spend 30min on the phone with them and then give them a price for the whole thing, so it's good you take the time over it properly. However then you often waste your time.
Maybe you need to say 'no' to customers who you don't think are serious. Or charge for the time spent doing highly skilled estimation work.
By 'better' customers I mean bigger companies, who are more experienced with software (and also probably have bigger budgets). The downside is more paperwork - you are much more 'free' dealing with small firms but also more at risk.
You don't have to stick to a fixed-price contract, for requirements that are vague you should look at doing time and materials.
Basically you need to spread the risk of the cost of overrun between you and the client.
A hybrid option might be to do some T&M proof of concept work then fixed price for the rest when you understand it better.
Alternatively, if you client has a pot of money then use your agile strengths to work with the customer to incrementally deliver functionality until they run out of money.
"We do not want to spend 20-30 hours of team effort."
Then don't.
If your estimating method is too costly, stop doing it.
"Customers ... are interested in Cost."
Then get them a cost more quickly. Do less work. Don't use a team of 3-4 for 20-30 hours. Have one person do it quickly.
One person can create a spreadsheet with stories, story points, priority, hours and cost. That's the project backlog for Scrum. That's the estimate. That's enough to start a conversation. It's not a fixed-price estimate.
A simple spreadsheet with stories, story points, price and priority is all you need. Then you can work with the customer to adjust priorities to determine how many of those stories they can actually afford to buy.
If they want a fixed price, you simply need to review each story summary to see if the points are right. You already have the spreadsheet, and the priorities, and the formula to compute price.
The unfortunate short answer is you are going to have to significantly reduce your estimation costs. The only way to do that is to reduce the number of people to one and use a formula approach.
Take a best guess. Put reasonable assumptions in the contract. If you do a decent job, some will be a little high, some will be a little low and it will average out in the end. If you are off by too much, track changes within the project and charge for them. The key will be in the assumptions placed in the contract, usually in the form of a statement of work.
This is normal business, from small projects to enterprise projects. Just a matter of scale. It doesn't have to be done this way, but it often is.
This reminds me of the challenge between time, money, people and overall quality. Some people can see this easily and others may struggle with the idea. Part of the key point here is to understand is what kind of expectations do you want to set and what kind of leeway do you have with the customer. For example, how are bugs in the software or overall support factored into the project.
You may want to consider how much work do you want to do upfront and on what kind of scale are you spending the 20-30 hours estimating a project. Comparing the cost of that much time spent generating an estimate, which # $40/hour is $800-1,200 by the way, to what the revenue from the project would be is something to consider. If the entire project is $400, then was it worth spending twice that coming up with an estimate? On the flip side, for million dollar projects, it may well make sense to spend that kind of money.
My suggestion would be to see if there is a cookie-cutter approach that could be taken for their projects so that there isn't as much variability to the projects if that is possible.
Theres two sides of estimation, first creating the initial 'ball park' figure this should be done relatively quickly, it should be emphasised its a ball park figure and its the start of your conversation with your customer, its not a contract. Second you do your more detailed team based estimation.
This is how this consulting company does it - Ball Park Estimating
Create a template spreadsheet with times and costs for typical pieces of work, look at the initial requirement and update your template. Start the conversation with this is the ball park but we will need to work together to confirm a final price and get a more accurate estimate. This more accurate estimation process will take x hours and cost x dollars.
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When working on fixed price software development projects, I frequently find myself having to estimate the total number of hours a project will take after the price is set, but before the work is started (or VERY early on in the development). Unfortunately, these types of projects are best developed using an iterative/agile method, which means that we don’t (and really can’t) do a complete up-front design.
In a typical scenario, we would have a contract that has X features and Y dollars. After contracting, the engineering department would then need to estimate the number of hours required to complete the X features. There are several possible reasons to need this information up front, including:
• The Y dollars translates to Z hours available, so we have to make sure that time(X)<=Z, perhaps by reducing the scope of X.
• The delivery date is set, and so we have to assign the appropriate resources to meet that date.
Kelly Waters has an interesting take on estimating agile here: http://www.agile-software-development.com/2009/04/agile-estimating.html Unfortunately, these are estimations of difficulty, using a points system, and do not translate to hours.
It seems to me that we need to be able to do one of two things:
• Obtain contracts that have a huge amount of flexibility in them to accommodate an agile development process.
• Figure out how to provide reasonably accurate up-front estimates for features that have not yet been designed.
The first option is of course not an option in most cases.
Does anyone have any advice/guidance on how to generate up-front estimates in an agile development scenario?
Alternatively, does anyone see another option for solving our problem through some other process change?
I think every client wants to have at least an estimate of how much the implementation of a given number of feature will cost him. I don't agree with people that say that if your using agile than you can't do this. Agile can be adapted to the real world where clients want to know how much money they're gonna spend on a project, or at least have a rough idea.
So, there are at least two documented ways you can do this and both are described in the "Agile Estimating and Planning" book by Mike Cohn that i strongly advise everyone to read.
Before your project even starts do the exercise of breaking down your stories in tasks and estimate each home in hours. Do the budget math with those estimates. Keep in mind that these estimates will only be used to reach the estimate time/budget. When the project starts the team should be responsible for estimating and creating the tasks like normal.
Use historical data. If the same team has worked before on a project with similar technology then you can use the past team velocity to estimate the project cost.
Again, for more details on how to do this read the referenced book.
Big Upfront Estimation is just Big Upfront Design with $$$ attached
You don't, that would go completely against the entire paradigm of agile.
Agile can be about Fixed Costs
What you can do is set a date and then work torwards it in iterations/sprints and let the product owner(s) decided what is important to get done by that date. In this way a Sprint of 1 or 2 weeks is a Fixed Cost the same way it would be in an Big Up Front Design would be, it is just a smaller fixed cost.
The entire premise behind agile methodologies is to do away with arbitrary deadlines and the death march that they become because change is not accounted for in the contracts and deadlines. SCRUM works, is a great starting point to build a methodology on, read about it and do what it says at least as a starting point.
Short Sprints with customer feedback and approvals
Give you a starting point to refine your future estimations upon, and helps you gain trust from the product owner and customer very quickly, because they see their most important concerns delivered in a very short amount of time.
Fixed price in Agile gives you a number of iterations you can run for a given team size. The point of Agile is then to maximize the value you can get during these iterations. Agile is about scope management.
So, you actually shouldn't do upfront estimations. This would mean fixed scope which is the just the opposite of Agile or anti-Agile if you prefer.
Agile doesn't work like this, you need a new kind of contract, as pointed out in another answer. See for example 10 Agile Contracts and/or google.
Instead of aiming for a contract for the "entire" project, you should create a contract that just runs for a month or two.
Set some very low goals, perhaps only two or three features.
Explain to the client this is a discovery phase of the project. Without this phase you cannot give them an estimate for the entire scope. It would be in no ones interest to give them an inaccurate estimate.
The client benefits in the following ways:
Lower upfront cost (only a fraction of the total price). If things go tits up there is a limit on their financial exposure (sensible given that most software projects fail).
Have working software within a couple of months that may immediately solve some of their problems
Have working software to provoke thought/conversation about requirements
Client will discover more about what they actually want
Client gets to see how well you work. If they don't like it they can look elsewhere.
"you don't, that would go completely against the entire paradigm of agile": I think this is quite incorrect. Agile is common sense based and nobody would invest in project if they had no idea how much it would roughly cost: they understand they may have to cut scope to meet deadlines or increase budget and/or extend deadlines to deliver the whole scope. On my company projects, we estimate projects by comparing their size and are also estimating epics using poker planning. Using the cone of uncertainty, and without trading off quality, we are about maximum 50% off on our estimates prior to starting the first sprint compared to the reality. And we will improve as we build up our Agile expertise (on accuracy and time to get first estimates).
You can't expect marketing to sponsor projects for 3 sprints (so up to 3 months) to have an idea of how much it would cost.
If you estimate the backlog items in story points (which is discussed in the Kelly Waters article you link to) then the question becomes how many story points do you expect your team to deliver in a sprint. If your team has been working together before, then you should be able to take a guess at this (perhaps with upper and lower bounds to indicate a confidence range).
If the team haven't worked together before, then you can take a few well-understood stories and break them down into detailed tasks. This will give you a man-hours number and you can compare this against your story point estimates to try and predict your velocity. Again, a confidence range of upper and lower values is probably appropriate.
Let's suppose your user stories add up to 150 points, and you predict that your team can deliver 15-20 story points per month, then the work will take 7.5 - 10 months (through simple division).
The advantage of this approach is that you can measure the team's actual velocity, and compare it to the plan. Re-estimating you timelines should also be pretty easy, e.g. if you discover after a couple of sprints that the team's velocity is actually only 10 story points per month, then you can easily predict what your revised timelines will be.
Do bear in mind that team velocity does fluctuate for a number of reasons. It is typically lower at the start of a project when the team is still forming. Also the team is most likely concentrating on infrastructure concerns at this point rather than delivering functionality.
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Given that the tasks in a specific sprint will not divide perfectly into the team, and all finish on the same date, what do you do to keep everyone working as the sprint moves into its final stages?
Inevitably it seems like there will be one or two people freed-up. If all the other tasks are done-done, and the remaining tasks are already underway, then what?
Do those team-members pick up items from the top of the product backlog, as they are likely to be needed in the next sprint anyways to get a head start?
What do you or your teams do?
My teams have always picked items up from the backlog, starting with the highest-priority items that can fit in the remaining time.
If nothing quite fits that criteria (as when there's only half a day left and/or no small stories to pick up), consider paying down some technical debt.
Scrum is done by teams.
If some people are done, they can help other members of their team.
They can also help their team by getting a head start on the next sprint.
They can also do some exploration of new technology, if that would help the team.
Or they could brush up their own skills, if that would help the team.
They could create training materials to help other members of the team improve their skills.
That's a team decision.
Pay down Technical Debt
Do anything that the team thinks should be done but doesn't belong on a card because there's no visible business value. Some people have called these tasks "technical stories". They tend to be things you should have done before Sprint 0, but didn't. Examples include adding of these that you don't already have to the build:
a Continous Integration server
a test coverage tool
static analysis tools
One thing I recommend is looking up future tasks and doing some detailed planning for estimates. This is non trivial and will take some time. Another is to scope of a new large scale project that can be broken into tasks and entered in product backlog.
Refactoring, writing unit-tests, improvement skills.
(...) what do you do to keep everyone working as the sprint moves into its final stages?
Nothing, I expect a self-organized team to find out this by themselves. And there are many options (by order of importance):
Help other members of the team to finish their stories (achieving the goal of the sprint is the most important, the whole team succeed or fail at this, not individuals).
Prepare a kick-ass demo.
Pick up a story from the backlog that can be done-done before the end of the sprint (i.e. not always the next highest priority items but something that fit in terms of size).
Repay technical debt if you have some.
Document things if this make sense.
Explore new things (tools, frameworks, testing techniques, etc) that may be useful for the team.
While it may seem obvious for team members to move on to the next highest items in the product backlog, I would advise against starting with this.
First and foremost, the teams' obligation is to achieving the sprint goal, so anything they can do to work towards that must come first (e.g. helping out testing, chipping in where possible, etc.).
Next, the team should look at expanding their definition of "done". Perhaps it currently doesn't include testing, or doesn't include some form of code review. Most teams starting with Scrum do not start with a definition of done that truly has a product increment that is ready to ship, so now would be the team to move towards that.
As others have mentioned, what tools do you need setup in order to get closer to a shippable state? Continuous integration? Automated acceptance tests? Now is the time to add these things.
Likely, you also have areas of the code that existed before you moved to Scrum and thus don't have very good test coverage or have accumulated technical debt. Now's the time to pay that off.
Also, as Mike Cohn suggests in his book Succeeding with Agile teams may want to reserve roughly 10% of their time for some look ahead planning. This may involve having a meeting with the Product Owner to discuss some up and coming stories for future sprints, breaking down larger stories into smaller ones, or for designers, perhaps doing some wire frames or mock-ups for upcoming stories.
Once you've gotten to this state, only then should you consider continuing on with the product backlog.
When there are team members that have completed there task early and find themselfs unoccupied there are a few things that can be done.
Make sure that estimation can be improved so hence planning can be improved. In doing this, bare in mind this estimation is very subjective. (However in my view underestimation is a situation we do not want to be in).
The scrum master has to bring in an ethos to the team of "Forwarding thinking"; improvements in oneself, in team productivity and the product or business the team is working on.
2.1. Try help out other team members task where possible to get stories Done (DOD) in the the sprint.
This could be pair work (pair programming)
As a programmer fixing other peoples bugs
etc etc
2.2. Try to help the scrum-master with other stories in he backlog. Check if any small story can be completed within the capacity of sprint making sure of it Impact to the sprint.
2.3. Work on research where there is a story in the backlog which is unclear. Do research on this story. Here a new story can be created with the emphasis on delivering research results. This story should be 0 points. programming prototyping etc can be done on the developers local PC without it being checked in.
2.4. Develop ones own skill either in there functional area (programming, testing etc) or the domain area.
The idea is a team that is performing. Each team member is dedicated to the goals of the team. So if you find yourself free...forward think how can i help the goals of the team.