February 11, 2025
Roy Amara, a renowned futurist, observed that "We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run." This principle, known as Amara’s Law, applies not only to technology forecasting but also to project management. Mis-estimations - both over and under - can lead to significant project issues. This article explores Amara’s Law, its implications for project estimations, and how Agile frameworks, particularly Scrum, can mitigate these effects to ensure smoother project delivery.
Overview and History of Amara's Law
Amara’s Law stems from his extensive work in the field of future studies. The law highlights a common cognitive bias where people overestimate the short-term impacts and underestimate long-term impacts of new technologies or changes. In project delivery terms, this translates to initial overenthusiasm and subsequent disappointment as challenges emerge, followed by an eventual realisation of benefits that were not initially foreseen.
Having an appreciation of this law is highly valuable for project leaders and business executives. It serves as a reminder that initial projections are often flawed, and flexible, adaptive planning is essential.
Negative Impacts of Under and Over Estimation
1. Resource Misallocation: Overestimation can lead to overallocation of resources in the early stages, resulting in inefficiencies and wastage. Conversely, underestimation can cause resource shortages, leading to bottlenecks and delays.
2. Unrealistic Expectations: Overestimating benefits and underestimating challenges can create unrealistic expectations among stakeholders, leading to frustration and a loss of confidence in the project.
3. Increased Risk of Failure: Projects that are not accurately estimated are more likely to face unforeseen issues, escalating risks, and potential failure.
4. Budget Overruns: Mis-estimations can lead to budget overruns, either through excessive initial expenditure or through the need for unplanned additional funding to address underestimated challenges.
How Scrum Can Improve Estimations
Scrum, as an Agile framework, offers a structured yet flexible approach to project management that inherently addresses the pitfalls highlighted by Amara’s Law.
Read on to learn how Scrum helps improve estimations and mitigate the risks of your project suffering from the kind of negative outcomes described above.
Three Planning Horizons in Scrum
Before we jump into the mechanics of estimations within Scrum, let’s remind ourselves of the three planning horizons that are built into the Scrum framework.
1. Daily Plan (determined by the team at the Daily Scrum): The Daily Scrum involves Developers reviewing progress towards the Sprint Goal and adjusting their plan for the next working day. This helps to ensure that daily estimations are highly accurate and are responsive to emerging change. Usually, the accuracy confidence of estimations within the Daily Plan is high because they are based on a real-time understanding of the project environment.
2. Sprint Backlog (determined by the team at Sprint Planning): Sprint Planning involves creating a Sprint Backlog that outlines the estimate of the work for the upcoming Sprint. Confidence in these estimations is usually reasonably high, as they are based on a clear understanding of priorities and immediate objectives. However, given that the Sprint Backlog is a forecast of the work that the team believes it can achieve, there always needs to be an acceptance that estimates - even the Sprint Backlog items - are likely to change.
3. Product Backlog (determined on an ongoing basis by the Product Owner): The Product Backlog contains an ordered list of work that it is believed will be required in order to achieve the Product Goal (i.e. the objectives for the product or project). This is work expected to be planned in to future Sprints. Estimations at this horizon are less precise, as they cover longer-term objectives that are likely to evolve. This acknowledges the uncertainty inherent in long-term planning. In fact, estimations on Product Backlog items are optional and when undertaken, tend to be intentionally high-level - often little more than T-Shirt sizing (e.g. small, medium, large, extra large). Items further down the Product Backlog may not have had any refinement at all, as such time could be considered wasteful due to the 'cone of uncertainty' (items further in future are increasingly uncertain due to complexity of the changing environment and technology) of when the items may get picked up, changed or even become obsolete.
Benefits of Scrum in Managing Estimations
1. Incremental Delivery: Scrum’s iterative approach means that work is broken down into smaller, manageable chunks, reducing the risk of large-scale misestimations. Each Sprint provides an empirical opportunity to reassess and refine estimations based on real-world feedback.
2. Continuous Feedback Loops: Regular events such as the Daily Scrum, Sprint Review, and Retrospective provide continuous feedback, allowing teams to make adjustments and improve estimation accuracy over time.
3. Flexibility and Adaptability: Scrum’s emphasis on adaptability ensures that teams can respond to changes and new information swiftly, preventing the compounding of estimation errors.
4. Empirical Process Control: Scrum relies on transparency, inspection, and adaptation. By continuously inspecting progress and adapting plans, Scrum teams can better manage uncertainties and refine their estimations.
Conclusion
Amara’s Law reminds us of the inherent challenges in project estimation and the dangers of relying absolutely on them, but Agile frameworks like Scrum offer powerful approaches to navigate these challenges. By embracing incremental delivery, continuous feedback, and flexible planning horizons, Scrum enables more accurate estimations, which tend to lead to better project outcomes.
Call to Action
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