Varying Scope in a Fixed Time, Fixed Cost Environment
Today, we’re talking about the triple constraints; time, cost, and scope. In Agile, we fix time, we fix cost and vary scope. But that requires a high-trust environment where the product development teams and the business are working together toward a common goal. Watch this video to learn more about the triple constraints in Agile and what you need to do to make sure that your teams can successfully vary scope in a fixed-time, fixed-cost environment.
Video Transcript
In Agile, what we’re trying to do is fix time and cost, get the business and product development teams to strategically decompose work, prioritize strategically, and focus on the minimally viable product all the time and optimize our chances of being successful as an organization. It isn’t productive for the business to fix all three aspects and demand that the product development teams pull a rabbit out of their hat. Sometimes that works, but it’s a low-probability endeavor. The counter-reaction is, “We’re Agile; we won’t make any commitments.” That’s a non-starter too. After all, we have businesses to run.
(Musical Interlude)
The Triple Constraints in Agile
Okay, everybody. Today I want to talk a little bit about the idea of the Triple Constraints. For those familiar with project management or those who grew up in that field, including myself, as I’ve been involved in Agile project management for about 15 to 20 years, the blend of traditional methods and Agile practices has been a long-standing interest.
The concept of the Triple Constraints holds significant importance for me. This concept essentially revolves around three variables in project management: time, cost, and scope. The essence of the Triple Constraint idea is that while you can choose two variables to fix, the third must remain adaptable.
If you decide to fix both scope and time, then you must be able to adjust the cost accordingly. Alternatively, if you opt to fix both cost and scope, then the time component must be flexible. Agile, however, introduces a unique approach. It dictates that time and cost remain fixed, particularly the sprint or release duration and the team size applied to them.
With this framework in mind, Agile proposes variation in scope. The Agile backlog empowers us to generate requirements, features, or system behaviors and prioritize them in a manner that allows us to start with the highest-priority items. This way, even when we exhaust our allocated time and budget, we still have a high-value deliverable that can be shipped.
Should priorities shift and the need arise to replace elements, we retain the flexibility to adjust scope within the defined time and cost constraints. Within the industry, an intriguing aspect, one I empathize with as a CEO, is the presence of uncertainty, particularly in software and product development, which often involves a software product.
The tension faced by business leaders revolves around constraints. They must deliver a product within a defined timeframe and budget, which isn’t limitless. This situation forces them into a gamble. This wager can be framed like so: by summer, when the new product must be launched, the trade show requires a demo for clients, or even when a promise to a client needs fulfillment – these scenarios highlight the financial and human resource limitations.
These limitations signify a cap on the workforce that can be allocated to the project. However, the requirement remains steadfast: deliver what’s necessary at the appointed moment. Particularly in the face of considerable uncertainty, leaders often feel compelled to assign deadlines, teams, and expectations for deliverables.
Yet, the challenge emerges when leaders fixate on time, cost, and scope. This fixation inadvertently introduces a concealed fourth variable. Some refer to this as an “iron square,” deviating from the traditional iron triangle concept. In essence, this transition transforms the three variables into four: time, cost, scope, and quality.
When time, cost, and scope are rigidly defined, a cascade of consequences unfolds. Trade-offs are made, shortcuts are taken, and even unintentional coding defects arise. These actions collectively erode the intrinsic and exceptional quality of the system over time, even if glaring defects aren’t present. The accumulation of technical debt within these systems becomes burdensome and inevitably requires repayment.
The essence of this principle, the “iron triangle,” dictates that two variables are fixed while the third is allowed to float.
Managing Variable Scope in Large Organizations
A noteworthy point I often share with teams in this context is that it’s unreasonable to approach the business with the notion that after receiving time and cost parameters, the team will build whatever they want within these bounds. It’s not a mere best-effort scenario.
Around 15 to 20 years ago, I collaborated with an architect who succinctly conveyed this concept. He told me, “Mike, this is Agile – you get what you get when you get it.” While I’ve cited his words over the past two decades, this belief, though common, embodies a detrimental anti-pattern and a significant failure mode. This perspective isn’t conducive to success.
In cases where you’re operating within a confined environment with discretionary funds and the timing of market entry isn’t critical, and you possess a high-caliber team with deep knowledge of the solution space, you might manage to navigate certain aspects more flexibly within Agile methodologies.
In certain scenarios, we manage a small team that collaborates on internal products. In these cases, I don’t impose deadlines or demand roadmaps. Instead, we convene weekly and discuss priorities. We allocate resources at a comfortable pace and ensure alignment with a budget I’m at ease with. This approach makes sense in specific contexts.
However, it’s important to note that this pertains to non-mission-critical software where customers aren’t waiting with anticipation. On the opposite end of the spectrum, we encounter situations with vital dates, crucial timelines, and multiple teams necessitating joint efforts to deliver an integrated product promptly. We must meet stringent time and budget constraints.
The challenge in such situations lies in the management of scope. It’s not about adopting a “get what we get” mentality. Instead, in an environment characterized by fixed time and cost but variable scope, we need to strategically break down the work. Our aim is twofold: maximize value and enhance the likelihood of having a valuable product to release.
Our strategy involves a constant focus on epic, feature, and story decomposition. We keep the concept of a minimally viable product at the forefront. Consistently, we opt for the simplest solution that can feasibly work. We aim for the fewest user stories to fulfill a feature, the least number of features required for an epic, and the minimal amount of epics necessary to enter the market.
Our dedication to this approach is relentless, ensuring that when time and funds run out, we still possess the strongest opportunity to launch our much-needed product. This approach entails a degree of compromise on both ends. In Agile, we acknowledge the fixed nature of certain parameters: sprint and release durations, roadmaps, team sizes, and organizational scale.
It’s analogous to understanding that nine women can’t collaborate to deliver a baby in a month. There’s a limit to the scalability of development efforts. Consequently, certain aspects like time and cost are indeed fixed. In response, the business must recognize the need for strategic trade-offs. They should approach the product development organization with an awareness of how to optimize their chances of success.
If the business fails to grasp this perspective and rigidly adheres to the constraints, two unfavorable scenarios unfold. The first involves compromised quality, as previously discussed. The second entails missed deadlines and dates, both of which are commonly observed. These outcomes aren’t conducive to a healthy work environment and leave no one better off.
From the developers’ standpoint, they must collaborate with the business to aid in decomposing the work optimally. Through this collaborative effort between the product teams and the business side, a strategic work breakdown can be achieved. This collaborative approach enables teams to stabilize their velocity and operate at a sustainable pace, with no death marches.
The business possesses all the drivers governing what is constructed, how it’s constructed, and the priority of construction. The business holds the authority to decide how to optimize its chances of entering the market efficiently. Simultaneously, we collaboratively engage in trade-offs along the journey.
Creating a High-Trust Partnership for Success in Agile
Ultimately, both the product development teams and the business must view themselves as partners.
Historically, this partnership presents challenges due to the frequently low levels of trust within the organizations we engage with. Product development teams often lack confidence in the business’s set direction, while the business is skeptical of the product development team’s ability to deliver on time. Hence, trust must be established early on during transformations.
More often than not, I urge teams to cultivate trustworthiness. This involves the ability to deconstruct tasks, establish consistent velocity, and maintain stable throughput at the feature and epic levels. This way, they gradually build the business’s trust by fulfilling their commitments.
Upon involving the business, the collaboration entails their participation in the task decomposition and contribution to strategic trade-offs. This participation acknowledges their role in working alongside the product development organization to optimize delivery within time and budget constraints – the crux of the matter.
In the realm of Agile, the objective is twofold: fixing time and cost while fostering collaboration between the business and product development teams. This collaboration manifests through strategic work decomposition, consistent prioritization, and a steadfast focus on achieving the minimum viable product. This concerted effort enhances the prospects of shared organizational success.
This approach thrives on pragmatism. It’s counterproductive for the business to rigidly fix all three aspects and expect the product development teams to miraculously overcome challenges. While this strategy may yield occasional successes, the probability remains low. Conversely, dismissing all commitments under the banner of agility is also untenable.
After all, businesses are in operation – generating profits, satisfying customers, and driving revenue. Thus, a pragmatic path emerges: fix time and cost, initiate a strategic collaboration between business and product development, strategically deconstruct tasks, emphasize prioritization of the minimum viable product, and allocate time for additional development.
Should a significant element be overlooked, addressing it transparently in the subsequent release remains an option. This methodology encapsulates the approach to managing time, cost, and scope within the Agile framework. Any alternative approach would be counterproductive. I encourage you to reflect on this approach and remember we’re here to assist if needed.
Have a great day. See you guys. Bye-bye.