Teams usually calculate cost per point (CPP) after completing some story points. This helps the product owner decide the budget and prevent it from going overboard before the project cycle ends. The team can then direct their energy and resources to work on the prioritized items. However, you might wonder if learning about these outcomes can have a negative impact as well. In this article at Mountain Goat Software, Mike Cohn shares what you must be careful about while you measure cost per point.
Measuring the CPP
What Is a Cost Per Point?
It is the cost incurred on a team while delivering a story point. You need to select a time range to get accurate results. For instance, you need 3 months’ worth of sprint data. If your story is worth $958, the total cost for 40 stories would be $958 x 40 = $38,320. To keep a safe buffer, you can round it off to $40,000.
When Not to Use
Notice that the CPP value was an average of the team and not per one person. If you estimate the cost per point per individual, it would be a very narrow dimension and throw an inaccurate version of the analysis. Generally, more than one person works on a product backlog.Do not make the mistake of comparing the CPP of your team with other teams. No two teams can have the same project or similar velocities to reach any deadline. You cannot measure velocity to discover productivity between teams.
Benefits When Used
Your client wants a quick project estimate. You can quickly calculate the cost per point if you know the story points. This also enables the product owner to estimate the team’s work properly.
To view the original article in full, visit the following link: https://www.mountaingoatsoftware.com/blog/is-it-dangerous-to-calculate-the-cost-per-point
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