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Wednesday, 9 January 2013

Estimate the agile project's budget using story points

The budget of the project calculated mostly based on the effort. In agile projects the budget can be calculated based on story point also. The project manger needs to have clear input on the velocity of the team to calculate the budget.

Project Budget = Cost per Story Point * Total Story Points
Cost per story point = Cost of resources based on the effort spent / Story points per week

Assume you have team size of 8 with the rate of 80$ per hour.
The total working hours spent by person per week is 40 hours.
Total cost per week = 8 (team size) * 80 (rate in $) * 40 (hours/week) = 25,600$
Assume based on the velocity, you team able to complete 16 user stories.
Cost per story point = 25,600 (Cost of resources based on the effort spent) / 16 (Story points per week)
                                      =  1,600 $
Assume you have 500 story points planned for the project.

Project Budget = 1,600 * 500 = 8,00,000 $

1 comment:

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