Forecasts, Estimates and Cost Accounting
I’ve tried to avoid getting involved in the ongoing #NoEstimates debate. It seems more like a religious war than a discussion with much prospect of a useful outcome. And a classic case of the Analytic-minded folks butting heads with the Synergistic-minded (and a few Ad-hoc perspectives thrown in for extra confusion).
For me, it also seems like a non-argument. By which I mean that all the knowledge is out there, should folks only but seek to look. For myself, I have several perspectives, drawn from these bodies of knowledge, that I shall continue to apply in the context of estimating and #NoEstimates.
The Theory Of Constraints Perspective
I don’t recall much in Goldratt’s teachings about estimates, per se. But he has written much about the futility of forecasting, e.g. customer demand for products. I suggest his arguments also hold true for forecasting costs (estimating). For more info you might like to take a look at his books, and in particular “It’s Not Luck”.
The Systems Thinking Perspective
Systems Thinking has a relevance to cost estimation, in that systems thinking (c.f. Goldratt, Ackoff) observes that a system is a collection of parts, such that improving the performance of the parts of a system taken separately will negatively impact the performance of the whole. In fact, such “local” improvements can entirely destroy an organization.
Cost Accounting assumes that the cost of each part, each operation, can be known separately (“local costs”). This is a false assumption. I suggest that this means the estimation of costs can, in reality, only produce useful numbers when considered in the context of the system (organisation) as a whole.
See also: “Throughput Accounting” ~ Corbett
The Nonviolent Communications Perspective
From this perspective, we can choose to see folks’ requests for estimates as a means for meeting some of their needs. I’d suggest that some other folks see this means as sub-optimal, in that these other folks believe that there are better means for those folks to get their needs met than through estimates and estimating. And I’d also suggest that for those other folks, having to provide estimates is not meeting their needs. Which is triggering in them various negative feelings, possibly including anger, frustration, hostility and anxiety.
So, applying this knowledge, we might choose to discuss what needs all these folks have, which ones are being met and which not, and some options for effective means for getting everyone’s needs met. Hopefully this might lead to an outcome where folks can agree on a mutually joyful way forward.
The Covalent Perspective
In any non-trivial endeavour, there may be some number of different stakeholders and stakeholding communities, each with their own set of needs. These different needs can and will, at least from time to time, conflict in possibly mutually-exclusive ways. The Covalent approach recognises this and focuses on making folks’ needs explicit and visible, such that these conflict can be resolved, to the extent that is ever possible.
See also: “Competitive Engineering” ~ Tom Gilb