Here are the 3 major factors to consider:
- Project Duration
- End-User commitment (how available are they to provide feedback and input)
- Maturity of the team
The second factor is also quite important: are there end-users available to provide feedback and are they easily accessible? One thing to keep in mind is that people are not used to the fact they will have to be available for a project throughout its duration. In the past they participate in workshops in the beginning of a project and in acceptance testing testing near the end (oh sweet memories :))
Finally you should consider how mature your team is. This means how experienced are they with agile practices such as Test Driven Development, Continuous integration, Test Automation, Collective Code Ownership (instead of finding out who broke the build, investigate and fix what broke the build), being cross technical (no specialist like the database guy, the UI guy, etc.). This however does not mean there is no room for specialists and that everybody has to be a generalist but everyone chips in where needed. A big obstacle are teams that divide work parallel with the layers instead of what i call "slicing the cake", this means implementing a feature from front to back, this will enable them to incremently deliver software.
For more information see: Agile Estimation and Planning from Mike Cohn
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