Following the analysis of each approach and its comparison, it was found that the traditional methodology follows a sequence of 4 processes using various tools and techniques to plan, estimate, determine, and control costs following a plan to stay within the budget pre-determined at the planning stage of the project. Thus, the deliverables are not produced until the end of the project or phase and any changes required during the project will impact directly on its costs.
Therefore, agile projects respond more effectively to changes throughout the project, and its costs are estimated based on the work rate of the self-organized team and the time required to complete the work also considering the product functions with high customer interaction. The continuous delivery of elements of value throughout the project creates income generated during the project and before it ends providing its funding.
The Agile approach can use various techniques for estimating such as story points, planning poker, affinity grouping, COCOMO II, etc. However, the techniques used for Agile Developments don’t always differ from the ones used in traditional development programs, some techniques can be used for both approaches such as expert judgment and analogous technique. Thus, in Agile, the requirements are not predefined at the early stage as in the traditional program.
In summary, the below table highlights the approaches to planning, estimating and controlling in both PMBOK (Traditional) and Agile cost management.
Cost Management Approach
Predetermined costs based on the scope
Focus on activities
Cost estimation carried out throughout the entire acquisition phases.
Focus on outcomes
Cost Baseline determined early and variance measured based on this
Iteration Reviews identify delivery throughput and any adjustments required