© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Prioritizing For Profit
Luke Hohmann
CEO, En...
2
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
• Founder/CEO of Enthiosys
– Agile Product...
3
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Enthiosys Overview
Innovation Games®
to Ge...
4
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Agenda
• Creating Your Backlog
• Prioritiz...
5
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Lather, Rinse Repeat
• Identify the work t...
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Creating Your Backlog
The first step is figu...
7
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Identifying Market Needs
Customer
Market N...
8
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Expressing Market Needs
Product Mgr
Defect...
9
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Market Research
For Market Needs
• An ongo...
10
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
A Market Research Process
What are your q...
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© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
What Kinds of Questions?
How big is
my ma...
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© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Market Research and
User Research Differ
...
13
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Qualitative Research with
Innovation Game...
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Prioritizing Your Backlog
The nest step is f...
15
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Prioritization Means Ordering
Do This Do ...
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© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
To Order You Need Attributes
Do This
Do T...
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© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
To Sort You Need Values
Do This value
Do ...
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© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
It Helps To Group Attributes
Do This yes
...
19
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Not Everyone is Equal
Do This
Do That no ...
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Problems with ROI-Based
Prioritization
Don’t...
21
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
ROI = (Gain – Cost)
------------------
Co...
22
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Determining ROI requires market
research....
23
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Comprehensive market and
customer researc...
24
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Agilists like small, independent
backlog ...
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Prioritizing For Profit
The groups of attrib...
26
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Three Core Groups
Stakeholder
Alignment
S...
27
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Three Core Groups
Stakeholder
Alignment
S...
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© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Three Core Groups
Stakeholder
Alignment
S...
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Stakeholders
Who?
30
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Stakeholders
• External: Customer persona...
31
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Customers  Personas
• Market segments ar...
32
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Integrating Their Feedback
• Product Mana...
33
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Some Techniques
Face to Face Interactions...
34
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Innovation Game® Buy a Feature
• A list o...
35
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Buy A Feature Online - Backlog
A list of
...
36
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Buy A Feature Game Play
Participants
and ...
37
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Buy A Feature Online - Results
Results of...
38
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Numerous Features
Compete in Tournaments
39
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Case Study:
VeriSign Global Customer Supp...
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Strategic Alignment
Why?
41
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Aligning to Strategy
• Get a copy of your...
42
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Strategic Alignment
Do This
Do That 1
Glo...
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Driving Profit
Money?
44
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Flip-Chart Exercise
• What are the primar...
45
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Some Primary Profit Drivers
Reduce Costs
...
46
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Business Model Framework
Customer ROI Mod...
47
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Core Value Exchange Models
• Time-based a...
48
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Time-Based Access
• Grant “right to use” ...
49
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Transaction
• Transactions: Measurable un...
50
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Meter
• Constraining a well-defined resou...
51
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Hardware
• Associate the amount charged
f...
52
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Service
• The exchange of money is tied t...
53
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Revenue Obtained /
Cost Saved
• Charge ba...
54
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Data / Content
• The software creates uni...
55
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Driving Profit
Do This
Do That 1
Increase...
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Putting It All Together
57
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Your Job…
pile of
stuff to do
backlog
1. ...
58
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
A Backlog Prioritized for Profit
Stakehol...
59
© 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000
Contact and Content
Reach me at lhohmann@...
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Prioritizing For Profit

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Luke Hohmann's "Prioritizing For Profit" talk outlines how to create and prioritize a backlog based on customer value, market need, strategic issue, architecture. Targeted at CTOs, VP Eng/Devt, and VP ProductMgmt/Chief Product Officers

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  • <number>
  • Market needs can be expressed in many appropriate ways:
    use cases, user stories, and other functional requirements
    non-functional requirements
    architectural changes
    other statements of fact
    Key aspects of the process are expressing market needs in a ways:
    that are small enough for the dev team to estimate
    that are clear enough to build
    that can be tested
    Sometimes user needs will be direct – “fix this bug” or “send me an email when there is a high temperature reading”.
    Other times you will need to convert – for example, you might want to generalize fixing the bug into fixing a whole set of bugs by improving your architecture. This can be challenge with ex-developers who become product managers, in that they tend to think in terms of “tasks”, not “needs”.
  • <number>
  • <number>
    Innovation Games® are low-cost techniques that make user research very accessible to normal agile teams.
  • Not a lecture on how to write a good backlog item, but how to prioritize them.
  • Prioritizing For Profit

    1. 1. © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Prioritizing For Profit Luke Hohmann CEO, Enthiosys http://www.enthiosys.com/insights-tools/prioritizeforprofit1of3/ http://www.enthiosys.com/insights-tools/prioritizeforprofit2of3/ http://www.enthiosys.com/insights-tools/prioritizeforprofit3of3/
    2. 2. 2 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 • Founder/CEO of Enthiosys – Agile Product Management consulting – Customer needs, roadmaps, business model – Product management mentoring and training • Agile product guy – VP Bus Dev (Aladdin), VP Eng &Product Dev’t (Aurigin), VP Systems Eng (EDS Fleet Services) – Board of Agile Alliance • Author, speaker, blogger – “Innovation Games” – “Beyond Software Architecture” – “Journey of the Software Professional” – agile PM blog at www.Enthiosys.com About Luke Hohmann
    3. 3. 3 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Enthiosys Overview Innovation Games® to Generate Ideas Agile Product Management to Build Products Product Roadmaps to Plan Future Products 1010110 1101011 Services to Drive Products Into Markets Business Models for Profitable Products Innovation Games® to Refine and Prioritize Ideas with Customers
    4. 4. 4 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Agenda • Creating Your Backlog • Prioritizing it – Challenges with ROI – Managing stakeholders – Aligning to strategy – Driving profit • Acceptance Tests
    5. 5. 5 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Lather, Rinse Repeat • Identify the work that needs to be done • Express it in a way that enables your team to understand it and build it • Prioritize the list • Confirm congruence with your roadmap • Make your cut line • Negotiate with development to ensure it fits identified release windows during release planning • do it again, again, and again…
    6. 6. © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Creating Your Backlog The first step is figuring out what your market wants!
    7. 7. 7 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Identifying Market Needs Customer Market Needs provides Product Mgr feeds feed Market Research Competitive Analysis Trends, etc. create Feedback Elaboration (Generalization)
    8. 8. 8 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Expressing Market Needs Product Mgr DefectUse Case Supplemental Requirement Market Needs feeds Expression (convergent) How Market Needs May Be Expresed Story Sketch of a User Interface Prototype
    9. 9. 9 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Market Research For Market Needs • An ongoing process of finding answers to questions that enhance your understanding of your customers / markets / offerings – reduces guesswork; increases confidence – ongoing because you, your customers, and the larger product ecosystem are not static • Creates quality segmentations • Guides product management
    10. 10. 10 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 A Market Research Process What are your questions? What will you do with the answers? What data is needed to answer the questions? Acquire the data. Process / analyze the data. Present results and take action.
    11. 11. 11 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 What Kinds of Questions? How big is my market? Which packaging design will increase sales? Which distribution channel is best for my market? What do customers want in the next release? How are we perceived relative to competitors? How are customers changing? How can I prepare for this? What kind of products could we add to our product mix? What features should be in the next release?
    12. 12. 12 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Market Research and User Research Differ Market Research User Research Focuses on the who & the what Focuses on the how & the why Evaluates what larger samples say Evaluates what smaller samples do Asks people about concepts, opinions and values Observes what people do Asks a market what they will buy Determines how a market will use Focuses on selling & marketing the product Focuses on the requirements of the product Primarily drives product strategy Primarily drives product design Source: MHHE
    13. 13. 13 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Qualitative Research with Innovation Games® Product Box Identify Exciting Features Spider Web Understand Product Relationships
    14. 14. © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Prioritizing Your Backlog The nest step is figuring out what order to do the work!
    15. 15. 15 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Prioritization Means Ordering Do This Do OtherDo That Do This Do Other Do That Do That Do Other Do This Do Other Do That Do This
    16. 16. 16 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 To Order You Need Attributes Do This Do That Flip Chart Exercise: Identifying Prioritization Attributes Attribute1 Attribute2
    17. 17. 17 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 To Sort You Need Values Do This value Do That value value value Flip Chart Exercise: Valuing Prioritization Attributes Attribute1 Attribute2
    18. 18. 18 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 It Helps To Group Attributes Do This yes Do That no no yes Sales Service Internal Stakeholders Does this backlog item directly improve your ability to do your job?
    19. 19. 19 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Not Everyone is Equal Do This Do That no yes Sales Service Internal Stakeholders Does this backlog item directly improve your ability to do your job? yes no weight 20 10 Sales has twice the influence
    20. 20. © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Problems with ROI-Based Prioritization Don’t be mislead…
    21. 21. 21 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 ROI = (Gain – Cost) ------------------ Cost But most people can’t tell you the gain!
    22. 22. 22 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Determining ROI requires market research. But most backlog items are not what you research. (Market != Customer)
    23. 23. 23 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Comprehensive market and customer research takes too much time and costs too much money.
    24. 24. 24 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Agilists like small, independent backlog items. Customers like large, interdependent backlog “groups”.
    25. 25. © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Prioritizing For Profit The groups of attributes that matter the most!
    26. 26. 26 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Three Core Groups Stakeholder Alignment Strategic Alignment Driving Profit Shows how you’re meeting market needs. Shows how you align with the big picture. Shows how you’re going to make money.
    27. 27. 27 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Three Core Groups Stakeholder Alignment Strategic Alignment Driving Profit Who? Why? Money? Flip Chart Exercise
    28. 28. 28 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Three Core Groups Stakeholder Alignment Strategic Alignment Driving Profit How? How? How? Flip Chart Exercise: How Do You Prioritize?
    29. 29. © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Stakeholders Who?
    30. 30. 30 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Stakeholders • External: Customer personas Partners Channel • Internal: Sales & Marketing Professional Service Customer Care The System This is a partial list. Extend to meet your needs!
    31. 31. 31 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Customers  Personas • Market segments are groups of customers that we use for marketing/selling • “Market Segment” is too impersonal • Personas are fictitious people for whom you are designing – More human/humane than “soccer moms” – Provides rich, contextual information (photographs, family stories, jobs, etc.)
    32. 32. 32 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Integrating Their Feedback • Product Management “expert” can simply prioritize based on their knowledge • Can ask small groups to prioritize using in-person techniques • Large groups need special tools “infinite” backlog use case bug fix arch change do this do that the other thing
    33. 33. 33 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Some Techniques Face to Face Interactions • Innovation Games® Buy a Feature 20/20 Vision Prune the Product Tree • Joint spreadsheet ranking Online Interactions • Innovation Games® Buy a Feature • Joint spreadsheet ranking Shared State (physical) • Innovation Games® Prune the Product Tree • Project boards Shared State (electronic) • Wiki’s • Commenting systems • email / workflow Same Time Different Time Same Place Different Place
    34. 34. 34 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Innovation Game® Buy a Feature • A list of 12-20 items (features or projects) are described in terms of benefits and cost • 5 to 8 invited stakeholders given limited “budget”, must reach consensus on projects to “buy” • Captures very rich information about customer motivations, trade-offs, objections, actual collective needs In-person • Provides rich opportunity for “new” ideas Online • Captures data for sophisticated analysis of preferences • Preliminary trials indicate faster/more accurate results than traditional tools Goal: Prioritize Backlog / Portfolio
    35. 35. 35 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Buy A Feature Online - Backlog A list of features with prices. Games can be played multiple times to get preferences among different groups
    36. 36. 36 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Buy A Feature Game Play Participants and their bids. An integrated chat facility enables you to understand participant motivations.
    37. 37. 37 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Buy A Feature Online - Results Results of many games played, sorted by number of times purchased.
    38. 38. 38 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Numerous Features Compete in Tournaments
    39. 39. 39 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Case Study: VeriSign Global Customer Support Context 46 project ranging from small to very large. Problem The VeriSign leadership needed to quickly identify the high- priority, most globally supported projects. Engagement Profile VeriSign project managers prepared the portfolio for the games. Enthiosys structured the process into three tournaments involving ~50% of the global customer care organization and facilitated the games. Results • Very clear separation of the “winning” projects – the original list of 46 was prioritized to the top 7 projects • High degrees of collaboration – even when collaboration was not required to purchase an project! • Participant chat logs provided detailed explanations behind the bidding – the meaning behind the choice. • Participants considered the process fun.
    40. 40. © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Strategic Alignment Why?
    41. 41. 41 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Aligning to Strategy • Get a copy of your strategy • Work with your portfolio/executive team to understand it’s weighting • Demonstrate alignment with backlog …and, yes, I know, this can be really hard, especially when you don’t have a clear strategy…
    42. 42. 42 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Strategic Alignment Do This Do That 1 Global Social Strategic Alignment 1 weight 25 15 Mobile 1 1 5
    43. 43. © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Driving Profit Money?
    44. 44. 44 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Flip-Chart Exercise • What are the primary drivers of profit? • How could you reflect that you’re driving profit in your backlog?
    45. 45. 45 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Some Primary Profit Drivers Reduce Costs – Licensed components – Workforce – Development tools – Operations – Fewer features – Platform architectures Increase Revenue – Time to market – Access to market – Multiple product opportunities; product families – Synergistic product sales – New service offerings – Enhance operations
    46. 46. 46 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Business Model Framework Customer ROI Model Quantifies Return Enforcement Protection of Rights Licensing Terms and Conditions of Use Type of Value Exchange The way you make money Profit Engine Causes More Money Making Events Customer Value Analysis Identifies Value Pricing How much money you make Driving Profit means prioritizing to your business model!
    47. 47. 47 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Core Value Exchange Models • Time-based access • Transaction • Meter • Percentage of revenue gained / costs saved • Hardware • Service • Data / Content Charity?
    48. 48. 48 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Time-Based Access • Grant “right to use” for a defined period of time (even if you don’t actually use) – Perpetual (like Microsoft Windows) – Annual (like many ERP) – Rental – Subscription • Pay After Use...
    49. 49. 49 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Transaction • Transactions: Measurable units of work • Exchange of money is always tied to the transaction but value (and price) is often associated with an attribute – Duration of a phone call – Time of day call is made – To whom the call is made
    50. 50. 50 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Meter • Constraining a well-defined resource • Consuming a well-defined resource – Concurrent (e.g., concurrent user) – Identifiable resource (e.g., named user) – Consumptive (e.g., you have 100 hours)
    51. 51. 51 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Hardware • Associate the amount charged for the software with some element of hardware – Software anti-piracy dongles – you pay for both the dongle and the license SDK/run-time • Huge challenge: software becomes “free”, especially in embedded software – Home appliances: microwave ovens – Information appliances: router/VPN server – Consumer electronics
    52. 52. 52 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Service • The exchange of money is tied to a service; software is required to provide the service or is intimately related to the service – Symantec: anti-virus updates – AOL: email – Red Hat: Linux-related services such as support or upgrades • Often associated with subscription pricing
    53. 53. 53 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Revenue Obtained / Cost Saved • Charge based on revenue obtained or costs saved, often in terms of percentages – Retail yield management ServiceSource, with annual revenue between $25M - $50M, says it receives compensation based on the revenue it generates for its clients and charges no consulting, training or implementation fees, or ongoing management costs. - June 29, 2005, San Jose Mercury News
    54. 54. 54 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Data / Content • The software creates unique data/content • The exchange of value provides access to these data – FICO scores – re-processed government data (patents, TIGER/Line® files) • Often associated with subscription pricing
    55. 55. 55 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Driving Profit Do This Do That 1 Increase sales via Intern’l partners Lower Our Customers Operational Costs Driving Profit 1 weight 25 15 Lower Our Operational Costs 1 1 5
    56. 56. © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Putting It All Together
    57. 57. 57 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Your Job… pile of stuff to do backlog 1. use case 2. bug fix 3. arch change • use cases • bugs • features • enhancement requests • updates • stuff… to do… markets to serve money to make market driven road maps
    58. 58. 58 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 A Backlog Prioritized for Profit Stakeholder Alignment Strategic Alignment Driving Profit At least one item for every stakeholder. At least one item that aligns to strategy. At least one item that drives profit.
    59. 59. 59 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Contact and Content Reach me at lhohmann@enthiosys.com More about agile and business models – agilePM blog and Product Bytes newsletter at http://www.Enthiosys.com/insights-tools/ Join us at our booth!
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