Tommy Norman is an agile coach in Nashville and he recently posted the following on LinkedIn:
As a Product Owner, do you know how much it costs to run your team per week/sprint?
Having this information can re-frame many of your discussions. When talking to stakeholders you can ask questions like "That would take about 1 sprint, is it worth X dollars to you?". With your teams it can help them understand the impacts of process inefficiencies by showing them how much they cost the company/client.
It does not even have to be super accurate, just a decent representation of the cost. If you have a dedicated team, it's pretty easy. Get a blended salary across team members, add 35% for overhead costs, then figure out how much that comes to per day. Even without a dedicated team you can use rough percentages.
Knowing the cost of delivery is a good first step towards moving discussions next to value delivered and return on investment!
Ever since I read it, I’ve been thinking about the notion. Believe it or not, it’s not something that I’ve thought about much in my agile journey. And I’m stewing over the implications.
While I think it’s a good idea, it might have a Yin and Yang nature to it. Let’s noodle on each side: