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Estimating work effort at the enterprise or portfolio level can be tricky. As a product owner or part of the business leadership team, you can use the following technique to create high-level estimates of complexity and effort for better roadmap planning.

When conducting strategic planning at the enterprise or portfolio level, rough estimates of effort for development initiatives are required prior to effectively plotting them on a roadmap. The challenge in approximating at this level is that lower-level details like story points and team velocity are not available. This means the typical method of rolling up the story level estimates to the epic and then to the initiative (bottom-up estimation) is not possible. The solution to this problem is to use a top-down estimation method in combination with normalized story points and baselines.  Here is an outline of the process we have used to establish estimates starting with top level initiatives.

1. Establish Baseline Epic
Identify an epic that can be used as a baseline. An epic is a group of related stories (and features) that make up a minimum viable product (MVP) and can be completed within one quarter or release cycle. This epic should be one that the planning/portfolio team knows the most about compared to other epics in the backlog.

  • Establish a Large Epic point baseline. As an example, we assume the agile team consists of 4 developers and 2 testers, which equates to a forecasted velocity of 60 points per 2-week sprint. With the epic having to be completed within a quarter or release cycle (3 months/6 sprints,) that would mean that the biggest epic is sized at 60 points x 6 sprints = 360* points. Consider this a Large Epic and round up to 377 points to align with the Fibonacci sequence explained below.
  • Review your identified baseline epic and determine relative sizing based on the Large Epic and the other epics in your backlog. If the epic is smaller than a Large, use the Fibonacci sequence to assign a point value based on its relative size.
  • Remove any epics that are bigger than Large. These epics should be broken down into smaller epics.

Fibonacci Sequence –  
The sequence is a series of numbers in which each number is the sum of the preceding two. (e.g. 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377…) We use Fibonacci in agile estimating since the separation in numbers help with relative estimation of complexity and effort.

*If using the Fibonacci Sequence, make it 377 points.

2. Establish Baseline Initiative
Now that we have identified Epic 1B (above) as our baseline epic, lets size other epics pertaining to Initiative #1. Compare the baseline epic to each of the other epics and size these epics using relative sizing to establish a baseline initiative point size. Use the following steps to establish a baseline initiative:

  • Epic 1B is our baseline epic at 377 points. Use relative sizing to size epics 1A and 1C. In this example, we determine epic 1A is less than half the size of our baseline epic (1B) and we call that a Medium at 144 points. Epic 1C is smaller than epic 1A and we call that a Small at 89 points.
  • Once you size all the epics, add up their estimated points to get the point size of the initiative.
  • This initiative will now be your baseline initiative. In this example, our baseline Initiative #1 is 610 points (1A 144 + 1B 377 + 1C 89 = 610).

3. Estimating an Initiative at Portfolio Level
To estimate any initiative at the portfolio level, compare it to the baseline initiative. If the baseline Initiative #1 was sized at 610 points and you feel that Initiative #2 is larger in size as compared to the baseline Initiative #1, but not double, use the Fibonacci Sequence to estimate appropriately. Let’s say 987 points. Similarly, let’s say if Initiative #3 seems like half the size of baseline Initiative #1, then looking at the Fibonacci table, you can estimate the point size for Initiative 3 as 377 points.

This process is effective for estimating at the portfolio level when you lack detail. These estimates should be used for high-level planning only and be refined as initiatives are matured during elaboration and again at the build steps in the development process.

Agile Techniques Series

We have worked with many large organizations to help implement Agile development and business demand processes at the team and enterprise level. Our Scaled Agilist experts have created a series of thoughts to help companies identify practical ways to address Agile business transformation in their own organizations. If you would like to discuss these techniques in more detail, please contact us. Enjoy!

Read our other articles in this Series: How work happensWork maturity; and Quantify effort across teams.

Certified Scaled Agilists:

Mike Simon

Mike Simon 
Principal Consultant

Derek Riddle

Derek Riddle 
Creative Services Director

Bryan Galloway

Bryan Galloway 
Business Analyst

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