Reviving Cost Awareness in Product Engineering

In the realm of software product engineering, a startling reality prevails: many organizations kick off projects without a predefined budget, leading to a significant blind spot in cost awareness.

In periods where all goes well, not talking about costs hides problems with prioritisation, because "all returns will be positive". In periods of decline, not talking about costs might lead into strategic and financial pitfalls that aren't evident until they're too late to avoid.

The Backstory

In my early career days, as a teen fixing computers and building websites, being able to provide time and cost estimates, even for highly uncertain tasks, was simply expected.

But with the rise of the Agile Manifesto in the early 2000s, 'cost prediction' and planning began to be frowned upon. Discussing budgets and schedules sometimes felt like taboo.

More recently, I'm glad to see a resurgence in the art of cost awareness. Speaking the language of money, rather than relying on story points, t-shirt sizes, and sprint cycles, can bring a lot of clarity and benefits.

The Art Reimagined: Addressing Uncertainty

In product engineering, discussing budgets isn't about accounting; it's about effective communication. It's about ensuring you're on the same page, with aligned expectations.

Soon, you'll realize the real discussion is about uncertainty, not money. Money acts as a proxy. It's the canary in the coal mine.

When teams are uncertain, they inflate their estimates, driving up costs and making business cases challenging. So, if an investment isn't aligning with expectations, start by asking: "What are you most uncertain about?" Follow up with: "How can we reduce this uncertainty with a minimal initial investment?"

The Challenge

Here's a challenge - 8 x 15 minutes - value every step along the way:

• (15 minutes): Take a look at your product roadmap. Assign an investment value to each initiative using the formula: Expected number of sprints * €20,000.
• (3x15 minutes): Select the 3 most expensive projects and spend 15 minutes per project in conversation with the business side.
• (3x15 minutes): For the same projects, meet with your product & engineering team(s). Show them the euro investment value and ask: What uncertainties are you facing? How can we minimize these uncertainties with a minor investment?
• Final 15 minutes: Compile your notes. Reflect on what you've learned.

Key Takeaways

Many teams run major roadmap items without clear euro budgets, hiding prioritization and risk problems in both good and bad times.

The article argues for speaking in money (euros and weeks) instead of story points to align expectations and expose uncertainty early.

A practical 8×15-minute challenge has you pricing roadmap items, then pressure-testing investment vs returns with business and engineering.

Using explicit euro figures changes conversations, surfacing uncertainty and ROI tradeoffs more clearly than traditional agile metrics.