How Much a Sprint Costs
Every Sprint Planning is an investment decision. For a two-week Scrum iteration, Product Owners invest an average amount of 26.000 € without having to justify this decision from a controlling point of view.
Let’s take an average Scrum team as an example. The team size is based on the recommendation of the Scrum Guide to create a team of 10 or fewer people [1], the discussions about the perfect team size within the Scrum community [3] and last but not least, my experience after developing products in different Scrum teams.
5 x Devs
1 x Product Owner
0,5 x Scrum Master
0,5 x QA
1 x other like UX Designer
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8 Scrum team membersPersonell Costs Per Scrum Team
A Scrum team with 8 members generates the following full personnel costs:
8 Team members
* Average salary 65.000 €
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= Direct costs 520.000 €
* Indirect costs 30%
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= Total costs 676.000 €
/ 26 Sprints per year
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= Personnel costs per sprint 26.000 €The calculation is based on the following assumptions: the team members have employment contracts with a company in Northwestern Europe. In addition, the team has different degrees of seniority, resulting in an average salary of 65.000 € per year.
It is also important to mention that personnel costs are divided into direct and indirect personnel costs. Direct personnel costs are the employee’s salary. Indirect personnel costs arise from legal regulations such as social security contributions or voluntary employer benefits such as employee trainings. In the European Union, indirect personnel costs of around 30% are to be expected [2].
To Sum It Up
From a profitability point of view (return/investment), the Scrum framework focuses on the return, which primarily corresponds to the customer value. My assumption is that this was a conscious decision by the Scrum initiators to focus on product innovations and further developments.
Nevertheless, in a shareholder value driven tech industry, it is necessary to make conscientious investment decisions. A Sprint Backlog has a monetary equivalent in the form of personnel costs. As a Product Owner, you should remember this fact before you hit “Start Sprint” the next time.
[1] https://scrumguides.org/scrum-guide.html
[2] https://www.destatis.de/Europa/DE/Thema/Bevoelkerung-Arbeit-Soziales/Arbeitsmarkt/EU_HoeheLohnnebenkosten.html
[3] https://www.scrum.org/forum/scrum-forum/37269/3-9-team-size-interpretation-scrum-guide
