The appearance and effects of the planning fallacy bias in agile IT projects

Abstract

biases that can heavily affect project results. Often seen effects are increased costs and time needed to complete an IT-project. Extant literature has mainly studied the appearance and effects of cognitive biases in traditional waterfall projects. However, focussing on the appearance and effects in waterfall projects leaves the understanding of the bias in other project methods underexposed. As IT-project management methods can heavily differ the assumption exists that biases might also manifest and affect differently. Therefore, this study specifically explores the planning fallacy bias which is defined as: the systematic underestimation of the time needed to complete activities due to an over-optimistic view of reality. This can lead to unrealistic estimates of time, resources, costs and quality and functionality. The study analyses if and how this bias exists in an agile-scrum IT-project setting. An exploratory setup was used, and eighteen agile-scrum experts were interviewed in three different organizations to provide a retrospective insight in the appearance, effects and potential countermeasures. The findings suggest that the planning fallacy bias is present in agile-scrum projects, yet the manifestation is limited compared to traditional IT projects. Iterative planning and optimization ceremonies appear to limit the extent to which the bias affects project results. Yet, the organization maturity in applying agile-scrum seems to be a pitfall. Countermeasures and implications for research are discussed.

Date of Award	11 Feb 2021
Original language	English
Supervisor	Nick Benschop (Examiner) & Vanessa Dirksen (Co-assessor)