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How is project cost management different when using an agile approach?

时间:2020-11-17 | 作者:chegg
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Cost is one of the factor which every project manager would try to reduce because its reduction helps to complete the project under budget. On agile projects, cost is mostly a direct expression of project time. Because scrum teams consist of full-time, dedicated team members, they have a set team cost — generally expressed as an hourly or fixed rate per person — that should be the same for each sprint.

In traditional approach of project cost management, Organizations estimate project costs and fund projects before the project starts while in agile approach Product owners often secure project funding after the product roadmap stage is complete. Some organizations even fund agile projects one release at a time; product owners will secure funding after completing release planning for each release.

In traditional approach, New requirements mean higher costs. Because project managers estimate costs based on what they know at the project start, which is very little, cost overruns are common while in agile approach, Project teams can replace lower-priority requirements with new, equivalently sized high-priority requirements with no effect on time or cost

in traditional approach, Projects cannot generate revenue until the project is complete while in agile approach , Project teams can release working, revenue-generating functionality early, creating a self-funding project.

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