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Prioritizing For Profit at Agile 08

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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.
  • Transcript

    • 1. © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Prioritizing For Profit Luke Hohmann CEO, Enthiosys Agile 2008 http://www.enthiosys.com/insights-tools/prioritizeforprofit1of3/ http://www.enthiosys.com/insights-tools/prioritizeforprofit2of3/ http://www.enthiosys.com/insights-tools/prioritizeforprofit3of3/
    • 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 © 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…
    • 4. © 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!
    • 5. 5 © 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)
    • 6. 6 © 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
    • 7. 7 © 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
    • 8. 8 © 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.
    • 9. 9 © 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?
    • 10. 10 © 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
    • 11. 11 © 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
    • 12. © 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!
    • 13. 13 © 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
    • 14. 14 © 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
    • 15. 15 © 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
    • 16. 16 © 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?
    • 17. 17 © 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
    • 18. © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Prioritizing For Profit The groups of attributes that matter the most!
    • 19. 19 © 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.
    • 20. 20 © 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
    • 21. 21 © 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?
    • 22. © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Stakeholders Who?
    • 23. 23 © 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!
    • 24. 24 © 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.)
    • 25. 25 © 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
    • 26. 26 © 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
    • 27. 27 © 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
    • 28. 28 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Example Tournament
    • 29. 29 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Buy A Feature Online - Backlog
    • 30. 30 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Buy A Feature Online - Results
    • 31. 31 © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Buy A Feature Online - Chat
    • 32. 32 © 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.
    • 33. © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Strategic Alignment Why?
    • 34. 34 © 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…
    • 35. 35 © 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
    • 36. © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Driving Profit Money?
    • 37. 37 © 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?
    • 38. 38 © 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
    • 39. 39 © 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!
    • 40. 40 © 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?
    • 41. 41 © 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...
    • 42. 42 © 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
    • 43. 43 © 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)
    • 44. 44 © 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
    • 45. 45 © 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
    • 46. 46 © 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
    • 47. 47 © 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
    • 48. 48 © 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
    • 49. © 2008, Enthiosys Inc. All rights reserved. www.enthiosys.com or 650.528.4000 Putting It All Together
    • 50. 50 © 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
    • 51. 51 © 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.
    • 52. 52 © 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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