Senex Rex
  • Team
  • Blog
  • Resources
  • Contact

Forecasting without Historical Data

Posted on April 29, 2014 by Troy Magennis Posted in Metrics, Product Management, Scrum

We can forecast even when no historical data exists, if we use our experience and judgment. In Part 1 of our probabilistic forecasting series we looked at how uncertainty is presented; in Part 2 we looked at how uncertainty is calculated. Both of those parts presumed historical data was available.

TOTALLY MISSED [Converted].eps

Although estimating without historical data makes many people uncomfortable, acting responsibly often requires us to do it. Fear of being wrong may cause us to avoid making any forecast at all, leaving someone else to make uniformed decisions. Forecasting helps us make better decisions by reducing uncertainty, even when there is little information. Probabilistic forecasting may involve experts expressing their guesses as a range. Wider value ranges in their “guesses” may indicate more uncertain inputs.

We recommend adopting these practices to get good estimates from experts:

  1. Estimate as a group to uncover risks that may expand the range of uncertainty (use Planning Poker or other anchor-bias reducing mechanisms to help expose differences).
  2. Estimate using a range, not a single value
  3. Coach experts to estimate using ranges to combat their particular biases towards optimistic and pessimistic

Range estimates must be wide enough that everyone in the group feels that the real value is within the range, as in “95 times out of 100 this task should take between 5 and 35 days.”

People can learn to be good estimators. Most people perform estimation poorly when faced with uncertainty (see “Risk Intelligence: How to Live with Uncertainty” by Dylan Evans and “How to Measure Anything” by Douglas Hubbard.) They found that practicing picking a range that most likely contains the actual value of known problems (wingspan of a Boeing 747, miles between New Your and London for example), then giving experts feedback on the actual answer, increased estimation accuracy. Practice helps resolve personal pessimistic and optimistic biases.

When estimating how long IT work will take, teams should provide a lower and upper-bound. When a project of sequential stories needs forecasting, it’s simple: the project forecast range is between the sum of the lower-bounds and the sum of the upper-bounds. However, few large projects involve completing stories strictly in sequence. If you have multiple teams, people working in parallel or complex dependencies, a simple sum doesn’t work (not to mention the unlikely luck of every pice of work being at the lower bound or the higher bound). Most projects need a more powerful technique for accurate forecasting.

Monte Carlo simulation can responsibly forecast complex projects, even if the only data you have is expert opinion. When Monte Carlo simulation is performed properly, we can propagate uncertainty accuracies from different components to create a responsible project forecast. For example, a statement like “We have an 85% chance of finishing on or before 7th August 2014” is mathematically supportable.

In next part of our probabilistic forecasting series, we will look at the likelihood of values within a range, how that can help narrow our forecast risk, and why work estimate ranges follow predictable patterns that help us be more certain.

 

Share this:

  • Click to print (Opens in new window)
  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to share on Reddit (Opens in new window)
  • Click to email a link to a friend (Opens in new window)
  • More
  • Click to share on Tumblr (Opens in new window)
  • Click to share on Pinterest (Opens in new window)
  • Click to share on Pocket (Opens in new window)
« Agile Metrics: Modern Management Methods 2014
Senex Rex at Work: April 2014 »

Leave a comment Cancel reply

You must be logged in to post a comment.

Continue with Facebook
Continue with LinkedIn

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Pages

  • 5 Points
  • Account
  • Agile Capitalization
  • Agile Capitalization Video: Greening and Rudd
  • Agile Training
  • Agility Language
  • Call for Papers: Agile/Lean at HICSS (Kauai, January 5-8, 2016)
  • Call for Papers: Agile/Lean at HICSS
    (due June 15, 2016)
  • Certified Enterprise Coaching
  • Clients
  • Contact Us
  • Courses: Agile Capitalization Workshop
  • Courses: Agile Development
  • Courses: Agile Product Management
  • Courses: Executive Introduction to Agile
  • Courses: [email protected] Practitioner
  • Dan R. Greening
  • Enterprise Scrum: Scaling Scrum to the Executive Level
  • Glossary
  • Home
  • Jeff McKenna
  • John Horton
  • Kay Lynn Gabaldon
  • Login
  • Logout
  • Members
  • Password Reset
  • Premium Content
  • Premium Content 2
  • Privacy Policy
  • Register
  • Release Duration and Enterprise Agility
  • Resources
  • Rob Myers
  • Senex Rex Team
  • Short Course: Agile Manager
  • Sign up for Premium Content
  • Software Moneyball
  • Subscribe
  • The First of Five Challenges to Large Organizations that Force Agility
  • Troy Magennis
  • User
  • Vincent T. Mills
  • Senex Rex Blog Posts
  • Rapid Agile Forecasting

Archives

  • August 2018
  • February 2018
  • February 2017
  • March 2016
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • February 2015
  • August 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • April 2012
  • March 2012
  • December 2011
  • July 2011
  • March 2011
  • February 2011
  • September 2010
  • August 2010
  • May 2010
  • April 2010
  • March 2010
  • January 2010
  • May 2009
  • March 2009

Categories

  • Advocacy (11)
  • Agility (10)
    • Agile Base Patterns (7)
  • Calls for Papers (4)
  • Enterprise (23)
  • Events (5)
  • Job Search (1)
  • Marketing (2)
  • Metrics (12)
  • Personal (7)
  • Personal Improvement (2)
  • Portfolio Management (11)
  • Product Management (9)
  • Quality (6)
  • Scrum (31)
  • Software (4)
  • Training (2)
  • Uncategorized (5)

WordPress

  • Log in
  • WordPress

Subscribe

  • Entries (RSS)
  • Comments (RSS)

Pages

  • 5 Points
  • Account
  • Agile Capitalization
  • Agile Capitalization Video: Greening and Rudd
  • Agile Training
  • Agility Language
  • Call for Papers: Agile/Lean at HICSS (Kauai, January 5-8, 2016)
  • Call for Papers: Agile/Lean at HICSS
    (due June 15, 2016)
  • Certified Enterprise Coaching
  • Clients
  • Contact Us
  • Courses: Agile Capitalization Workshop
  • Courses: Agile Development
  • Courses: Agile Product Management
  • Courses: Executive Introduction to Agile
  • Courses: [email protected] Practitioner
  • Dan R. Greening
  • Enterprise Scrum: Scaling Scrum to the Executive Level
  • Glossary
  • Home
  • Jeff McKenna
  • John Horton
  • Kay Lynn Gabaldon
  • Login
  • Logout
  • Members
  • Password Reset
  • Premium Content
  • Premium Content 2
  • Privacy Policy
  • Register
  • Release Duration and Enterprise Agility
  • Resources
  • Rob Myers
  • Senex Rex Team
  • Short Course: Agile Manager
  • Sign up for Premium Content
  • Software Moneyball
  • Subscribe
  • The First of Five Challenges to Large Organizations that Force Agility
  • Troy Magennis
  • User
  • Vincent T. Mills
  • Senex Rex Blog Posts
  • Rapid Agile Forecasting

Archives

  • August 2018
  • February 2018
  • February 2017
  • March 2016
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • February 2015
  • August 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • April 2012
  • March 2012
  • December 2011
  • July 2011
  • March 2011
  • February 2011
  • September 2010
  • August 2010
  • May 2010
  • April 2010
  • March 2010
  • January 2010
  • May 2009
  • March 2009

Categories

  • Advocacy (11)
  • Agility (10)
    • Agile Base Patterns (7)
  • Calls for Papers (4)
  • Enterprise (23)
  • Events (5)
  • Job Search (1)
  • Marketing (2)
  • Metrics (12)
  • Personal (7)
  • Personal Improvement (2)
  • Portfolio Management (11)
  • Product Management (9)
  • Quality (6)
  • Scrum (31)
  • Software (4)
  • Training (2)
  • Uncategorized (5)

WordPress

  • Log in
  • WordPress
Copyright ©2013-2015 Senex Rex LLC. All Rights Reserved.
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
Do not sell my personal information.
Cookie SettingsAccept
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT