Effectively Tracking Cost in Scrum

Note that the ‘Scrum Team’ refers to the Product Owner, the ScrumMaster and the Team. The Team consists of developers with all the skills to turn the Product Owner’s requirements into a potentially releasable piece of the product by the end of the Sprint.

Last week I was discussing with Mathieu and he started to talk to me about a friend who is now Product Owner (previously project manager) on a Scrum project. This person wants to make sure he is doing a good job and wants to continuously improve. I said, this is really awesome!

Mathieu, then says that his friend asked him the specific question: if I want to track the time I am investing in creating user stories and prioritizing the product backlog, which work item type and fields should I use to enter actual time spent if I am using the new Scrum process template from Microsoft.

My reaction is ... Interesting, why don’t you ask your friend how he is going to use this data to effectively improve as a Product Owner? If the Team is producing software that the users consider high value at an ever increasing and sustainable pace, don’t you think that those are great indications that the Scrum Team is doing good work? I believe those are much more interesting metrics to track than the actual effort he is putting in creating and prioritizing the product backlog.

Mathieu: Sure, I will suggest him that but I think he also wants to track cost.

Track Cost

Ha! This is getting even more interesting now. Because it leads to the questions of time and cost tracking in Scrum; a question I often get in my scrum classes, especially from participants working in large corporations.

When I started teaching Scrum in 2004, I used to answer in my classes that time tracking is not part of Scrum but if you want to track actuals on sprint backlog items for administrative purposes, you can go ahead.

Observing Scrum Teams doing time tracking on sprint backlog items invariably leads them to questions like:

And the list goes on. All these questions are a struggle for the Scrum Team and answering them does not help them in creating high value software fast. Therefore, my answer now is: Tracking actual work on sprint backlog item is not part of Scrum. Period.

The reaction I usually get is either “this is impossible in real life” or “you are telling us that a Scrum Team is not responsible for its cost”.

I think that a Scrum Team IS responsible to be aware of their cost and the value they bring to the organization; they are software professionals and therefore they strive to maximize the ROI of their work. The Product Owner is specifically accountable for maximizing the ROI by appropriately prioritizing the product backlog.

The reaction is usually “I don’t get it. You are saying not to track actuals on sprint backlog items and at the same time that the Scrum Team is responsible for its cost.”. Here is the suggestion I usually provide. Most organizations are interested in knowing how many hours their people work to be able to produce the pay checks. Therefore they have a timesheet system where people enter their time. My suggestion is to have time entries per project (much higher level of granularities than the sprint backlog items). Therefore, a team member working on a single project will produce one time entry per period. Timesheet system or not, you should be able to easily query your enterprise systems to know salary costs for a given period. May be you are lucky enough to have a cost tracking system in place that is able to give you the answer to how much expenses directly related to the product development were made during the same period.

My point is that it should be possible to identify the total cost of an iteration and have the Scrum Team track this. Considering all of this, I have a request to make to Microsoft : Add the fields ‘Scrum Team Cost’ (numeric) and ‘Other Costs’ for iterations in the Scrum process template. This will be useful for enterprise Scrum. May be it is not too late to put it before version 1.0 goes final ;)