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Friday, May 02, 2014

Real stories of how estimates destroy value in Software Development


A friend shared with me a few stories about how Estimates are destroying value in his organization. He was kind enough to allow me to share these stories anonymously. Enjoy the reading, I know I did! :)

The story of the customer that wanted software, but got the wrong estimates instead

Once, one of our customers asked for a small feature and, according to this customer it was quite clear from the beginning what he wanted. Alas, in my experience things often don’t go as planned and therefore I have added a good buffer on top of the needed estimates. Just like all developers I know do. Every day.

However, the story was about to get more interesting. A bit later, the sales team said those numbers were too high. "The customer will never accept those numbers!", they said. "And we really want this case."

After much negotiations we reduced our estimates. After all, we had added some buffer just in case. So, we reduced the estimates on the account, and I heard myself say (I should have known better): "Well, I guess that if everything goes well we could do it in that time."

My real surprise was that, a few days after the estimates were given to the sales team and the customer, I heard from the project manager that the company had agreed a Fixed Price Project with the customer. "That is madness", I said to the sales team. I felt betrayed as a developer! I had been asked for an estimate for the project, but I was tricked into accepting a Fixed Price Project through the estimation process! During the estimation I was not told that this would be a Fixed Price project.

The result was that the project was delivered late, we exceeded the estimates we gave. However, I did learn a valuable lesson: If you are forced to create estimates and the customer requires fixed price then never obey wishes from sales team: their target is different. Or, alternatively just do away with the estimate process altogether: just ask the sales team what number they want to hear ;-).

History repeated: never trust the sales team to handle estimates

A few months ago a customer called in and requested a small feature for their existing product. They were asking for an estimate. Part of the work was very clear and would be very easy to implement. But there was a part that wasn’t that clear. After some pre-analysis and discussions with other development team I knew about what would be needed to finish the job. Unlike the story above, this time I knew the customer asked for a Fixed Price Project and therefore added some buffer – just to be on the safe side.

After carefully estimating the work with the team we sent the total estimate to the sales team. This estimate included everything that was needed: from analysis, implementation, test, deployment. I did not split the estimates into its components parts because I didn’t want the customer to think that testing would be optional (Yes! It as it has happened before).

However, the sales teams split my estimate into the different roles. Big mistake! Magically the estimate that the customer received was half-day shorter than the one we provided. Not a big difference, but I learned my lesson!

Surprise number two was about to hit me: The customer said they hadn't used some hours from a previous contract and that they should get a discount. Long story short, when the project was started we had to reduce our "cost" to 50% of the estimation I had originally given to the sales team. I learned that I should never trust the sales team with mathematical calculations!

We did manage to deliver the feature to our customer, thanks to some very aggressive scope management, this meant that we had to deliver functionality that was requested, but did not perform as well as it could have if we had been allowed to work on the feature from the start, without the estimation back-and-forth.

I did learn my lesson: If you sales team doesn’t know how to sell software projects, and before you given them any estimates, add even more buffer on top of things learnt from the previous story! ;-).

Estimation as an organizational smell

Certainly there are many organizations in the world that do not go through similar stories as these. However, many still do! For those organizations that are affected by stories like these I suggest that we look at different ways to manage software projects. #NoEstimates provides a clear alternative that has proved very successful in the past. For example, in the paper below I mention a story where a team would have given an estimate within 4% of the actual time it took the project to complete, if they had used #NoEstimates!

The Silver Lining

The story continues, however. Here's what my friend added at the end of his email:

Well, after all having successfully changed the mindset of many in the company and in our team. We are already doing quite well.

Now I do things differently. The first thing I always discuss with the customer is how much money they would like to spend for the work they want to have done. This already gives me a good picture if we are even close in understanding of the amount of work that is necessary or more in the direction of “insane”.

Today I don't negotiate traditional contracts with my customers. Every job is now build on trust, communication and transparency.

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at 11:20 | 8 comments
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Wednesday, October 26, 2011

Adapting to a different country and culture - a story


This is the story of Jerome (names changed to protect the innocent), and his adventures while changing countries for work.

Jerome always wanted to work in another country. He had bought into the whole globalization/Cultural experimentation ideas of the 90's. The economy was growing quite strongly, there was a strong need for IT professionals and he wanted to explore the world.

Armed with a degree and the will to explore he left his country, which was warm and sunny, for Finland. He arrived in the early afternoon of one gray and rainy day. "The prototypical autumn day" - he was told.

"Never mind" - he thought. I can certainly survive a bit of rain and snow. He was met at the airport by a colleague who drove him to this first apartment. Jerome had never seen that apartment but that did not worry him. "How bad could it be?" he thought.
As he pushed his large suit case up the ramp to the apartment, he thanked his colleague for the ride and entered the room. This was the first shock. The apartment was a room, a single room. "Talk about nordic architecture!" he said out loud.

He sat down and appreciated the last few moments of calm before the real battle started. Next morning he would have to visit many offices before his arrival and relocation to Finland could be completed.

Relocation to a new country can be a daunting process for a person. Many new people to interact with, many laws and rules to learn, many things to buy. A whole new life to build! In fact, adapting to a new country can be down right scary. Really scary. However Jerome's employer seemed to be aware of this and had organized for a person to be with him through the "legal" process of relocation. This, Jerome learned, was called a "Relocation Service". "What a great idea!", Jerome thought to himself, "this makes my life so much easier, and already gives me a link to someone I can call in case of an emergency".

So, he went about visiting the "Alien office" (Yes, Jerome was now officially an 'Alien'). "What a way to welcome people, by calling them aliens!". Later he visited the Maistraati, then the bank, then the local phone company and finally the most used relocation service around the world: IKEA!

That night, while reviewing in his mind what had happened during the day he realized that even if much of the communication with the many clerks he met happened in Finnish, all the paperwork was readily available in English. Never for a moment did he feel lost in the paperwork process. Even the web bank (and there was a web bank! -- in 1998!) was in English. Reflecting back Jerome realized that having all the bureaucratic documents in English was one of the most important reasons he felt welcome in his new country. He felt that in this country they were serious about accepting and welcoming people into the society. The barrier was low enough that in retrospect he felt that he would do the same again, if given a chance.

The first barrier was overcome. He was now an official resident of his new country. Next came the integration to the work life, after all work had been the reason for him to move to this new country.

Next was his first day at work. Jerome was apprehensive. he had visited the company offices before during his job interview, but now was his first work day. He entered the office and asked for his manager. After a few minutes waiting, a smiling person came to greet him. Jerome remembered him from the Interview a few months prior to this encounter. He felt immediately at ease.

In the company he was working for the hierarchy was not emphasized, people worked together at all levels and he never felt like an "inferior". He was hired for his knowledge and experience and he felt that his presence was welcome. The fact that he had the support of the relocation service also helped as he did not have to bother which colleagues with questions about the bureaucratic issues and could fully focus on the work at hand. He reckoned that, all in all the relocation service support actually saved him and the company many hours and stress by handling the legal issues and allowing him to focus on work from day 1. This would become even more clear years later when he moved to Germany and did not have that extra support from a relocation services company. But I'm getting ahead of the story. Let's get back to the process of integration to the new culture.

It was now early 1999 and winter had settled in. When he arrived he was warned about winter, and he fully expected cold and snow, but that year was a record year. The boy from down south - where snow meant "no school!" was fully surprised by the -25C winter that year. The snow was another big impact surprise: he had bought some boots that were obviously not fit for Icy roads and spent most of the November/December measuring the temperature of the snow with his lower back. "Auch!"

Getting used to the cold and dark was something that many of his Alien friends struggled with. You can actually see it happening as the level of complaints about culture, bureaucracy and other topics goes up, way up in the winter. Some of the those complaints are justified like the issue with the language learning. No matter how you try if you don't pronounce "kertalippu kiitos" perfectly the tram driver will always reply "and where are you going sir?" - in perfect Oxford English, of course! Language is one of the biggest obstacles to completing the process of adaptation. After many years of attending Finnish courses, Jerome finally learned enough words to confidently order his food in Finnish and not be completely surprised by what was brought to his plate later on.

The first year was gone and one surprise awaited him. One day he got home and saw a letter from the police. "oho" he thought "what now?" After consulting with his colleagues he found out that he had to go to the police to renew his residence permit. This was his first encounter with the local bureaucracy on his own. Would he able to understand what he was told?

Jerome timidly entered the room and saw tens of other "aliens" waiting to be received. Certainly many in the same situation as him. This made him think "why do the police isolate us 'aliens' into a different office? It probably has to do with the efficiency of having all 'alien' issues handled by the same people" he thought. But is this how it really should be? What is the message that his sends to those so called aliens? How does an alien feel to be put into the alien-ghetto like that?

Gladly the Tax Office (verotoimisto) has totally different approach and all tax payers are welcome to any office, despite being an alien. "I much prefer the Tax Office" Jerome thought while at the same time realizing he would never have imagined himself thinking that way.

His preference for the Tax Office was about to grow as later that year he received his first tax return. "It is already pre-filled for me! What a great idea!" Jerome thought while realizing that he would not have to spend endless hours trying to decipher local tax code. "I can get used to this!" he said. This was the first painless tax season of his life! Definitely a plus when considering where to live in the future!

Back to work Jerome could not help but feel that his personality was very much in synch with the way his company was organized. There was a clear purpose and people were encouraged to be autonomous and collaborate across department borders to achieve their common purpose - what a difference to other countries where nothing happens without the boss giving the green light to everything. This focus on autonomy and purpose eased Jerome's integration to the work-place.

Some years later Jerome would receive an offer to move to Germany. He was tempted. Germany's political tradition and strong economic growth were strong attractors, but perhaps the final reason that pushed Jerome to leave Finland was the fact that many companies that he contacted just flat-out refused to hire people who were not native or near native speakers of Finnish. This was in conflict with everything Finnish companies and entrepreneurs were saying publicly! Publicly many companies talked about wanting to go international and about the fact that their companies depended heavily on trade, but when it came to their hiring policies that was not the case! This was 2010! and in Finland we are still hiring people depending on whether or note they speak a language that is probably harder to learn than most of the jobs we hire for! Here's a suggestion: why not have language learning as part of the job? That way we would get highly qualified 'aliens' and would be able to keep them in Finland! But I am digressing now.

Later on Jerome thought about what made his integration at work and in the society harder or easier and he came up this list:


  • Easier

    • Relocation Service support to a new comer
    • Low hierarchy and clear-purpose at work
    • All bureaucratic processes had been documented in English
    • Web / Internet banking
    • Pre-filled tax returns
    • And... lots of friends, many in the same situation

  • Harder

    • New culture: when to be friendly? When is that just akward? How to make friends? What do people value?
    • Dealing with many different authorities / entities (although relocation services helped!)
    • Learning a new language (although knowing the language made the integration process easier later on)



Recently Jerome moved to Germany, and he had a chance to go through the same process again, in a new country. Now more experienced with the process of moving he felt confident that he could tackle the challenges ahead. Little did he know!

Upon arrival to Germany he was informed that he had to decide on a health insurance, and fast because his salary could only be paid after that. "Hmmm, they don't make this very basic thing very easy here, do they?" he thought to himself, and went on: "Strike one for Finland with it's universal health care system. In retrospect KELA makes integration much, much easier by having a universal health coverage from the start!"

Jerome decided to register with a national health care provider. He could have registered with a smaller / local health care provider, but he had heard enough horror stories about smaller / local providers that could go bankrupt at any time. Scary stuff for an Alien!. He then had to register as a "legal alien" - to quote Sting's. He went to the local Amt (that's office in German) and registered, not an "alien" but as an Ausländer. Don't know about you, but Jerome felt much better with the term Ausländer, maybe because he did not speak German.

Jerome arrived at the Ausländeramt desk and politely asked "Sprechen Sie Englisch?" - that being all the German that he could muster. The clerk, however, replied "Oh, but we are in Germany. We must speak German." "Strike 2 for Finland" Jerome thought to himself. Struggling with understanding what the clerk was trying to say he was able to successfully register as a resident of the city. "We have to applaud the idea of an open Europe, this is the stuff that makes us happy we pay our taxes. Long gone are the days when we had to sneak through borders illegally to find a work place to our liking. Now we can freely travel and settle with minimal bureaucracy. That is a real tangible benefit to the people! Borders only benefit the powerful who can find legal, and not so legal ways around them."

Political rant aside it was now time to start enjoying life in a new country. Until...

Later that week, Jerome received a letter at home. He had to present himself in the local city office. His registration had a problem... "Oho! I spoke too soon about freedom from borders..."

Jerome reached the office and asked what the issue was about. After he was explained what the issue was he could not believe it. "Really? in the XXI century? We can send a man to the moon but we can't solve a problem like this?" -- he thought to himself.

The issue was that when he completed his original registration, he had used the wrong postal code and therefore he now had to correct it. But the process for that was worthy of a Kafka plot. He would have to drive to neighboring town, register there (with the original date of his initial registration); then he had to come back to the city office and register again with his current address so that his registration could be considered valid! Basically he had to register twice in two different places to finalize his original registration process. "Talk about bureaucracy! Strike 3 for Finland!"

But the situation got worse later on! Jerome received a letter from the local court where he was instructed to pay a fine for not having registered on time in his current municipality! "The nerve" he said out loud as he read the translation from Google translate. "I've now registered 4 times" - he had registered once more when he changed apartments in between these events - "and they have the nerve to tell me that I have not registered on time?" "Strike 4 for Finland!".

After this ordeal Jerome revised his table of things that make your integration easier or harder:


  • Easier

    • Relocation Service support to a new comer
    • Low hierarchy and clear-purpose at work
    • All bureaucratic processes had been documented in English
    • Web / Internet banking
    • Pre-filled tax returns
    • And... lots of friends, many in the same situation

  • Harder

    • New culture: when to be friendly? When is that just akward? How to make friends? What do people value?
    • Dealing with many different authorities / entities (although relocation services helped!)
    • Learning a new language (although knowing the language made the integration process easier later on)

    • Bureaucracy!




The end!

Photo credit:

Rob Young @ Flickr
mac_filko @ Flickr
Giorgos @ Flickr

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at 06:01 | 2 comments
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