Agreeing on business value

Agreeing on Business Value Portia Tung Pascal Van Cauwenberghe Sponsor Team

Introductions Agile Coach. Storyteller. Games Maker. Consultant. Project Manager. Games Maker. Consultant His Blog: blog.nayima.be www.nayima.be NAYIMA We make play work Consultant-Coach Her Blog: www.selfishprogramming.org www.portiatung.com

Without a goal It’s hard to score

The Goal
Work together to build a business value model
Sponsor Team

Session Acceptance Tests
I can build a simple Business Value Model
I can explain the value of building a Business Value Model
I want to learn more about this topic

What is Business Value?

How do you measure Business Value?

What Business Value means to us

The Challenge #!?!!# Sponsor Team Arrggghhh!!! Arrggghhh!!! Arrggghhh!!!

The Future #!?!!# Sponsor Team Arrggghhh!!! Arrggghhh!!! Arrggghhh!!!

The Future The project goals are… We’ve got a few more ideas to increase the value Working together to create a common definition of Value. Sponsor Team

A Useful Tool Business Value Modelling

Business Value is not a number
Business Value is a model
Business Value models what you value

Ring-ring-ring… (The Simulation)

The New Kids on the Telco Block We’ll make you talk

Company Vision The world’s favourite mobile company by 2012 Things just work … … Help customers get value for money

Your Mission Create a Business Value Model for Chattie’s Customer Support

Building a Business Value Model
Work in groups per table
Use Post-Its to make model easy to change
When you have a question or an issue
Write it on a pink Post-It
Continue working
Resolve issues and questions when we come round to your table

Exercise 1 Identify Stakeholder Goals

Building a Business Value Model (1)
Read your persona card
Find persona goals
Write one goal per Post-It

Read your persona card
Find persona goals
Write one goal per Post-It
Time’s up! 15 min

Exercise 2 Select Stakeholder Goals

Choose a small (4 - 5) number of goals
Represent all personas
Balanced: financial, people, organisation

Choose a small (4 - 5) number of goals
Represent all personas
Balanced: financial, people, organisation
Time’s up! 10 min

Exercise 3 Identify measures

Brainstorm measures for each goal
Write the measure on a Post-It
Add the Measure Post-Its to the Goal

Brainstorm measures for each goal
Write the measure on a Post-It
Add the Measure Post-Its to the Goal
Time’s up! 10 min

Exercise 4 Build in early feedback

Build in early feedback TIME Future Present
Leading measures
Measure early
With product tests
Lagging measures
Measure late
With customer use

Select measures that can only be measured late
Identify a leading measure for each goal
A way to measure early and predict how close we are to the goal
Write one measure per Post-It
Explain why each leading measure is a good predictor.
How and when can you verify this?

Select measures that can only be measured late
Identify a leading measure for each goal
A way to measure early and predict how close we are to the goal
Write one measure per Post-It
Explain why each leading measure is a good predictor.
How and when can you verify this?
Time’s up! 10 min

Exercise 5 Find relationships between goals

Diagram of Effects
We’re looking at complex systems
Changing one variable will affect another
A “Diagram of effects” shows how we think goals affect one another

Why should we do Business Value Modelling? Value Delivered Focus Alignment Clear Definition of Value Common Understanding Business Value Modelling Motivation

Identify and explain relationships between goals
Add goals/measures that are needed to explain the system

Identify and explain relationships between goals
Add goals/measures that are needed to explain the system
Time’s up! 10 min

The Theory Behind Business Value Modelling

The Project Economic Framework
Concept described in “Flow”
by Don Reinertsen

“ While you may ignore economics, it won’t ignore you” - Don Reinertsen

Pop Quiz
Q: Why should we change our product development process?
A: To increase profits
Q: How should we make decisions?
A: Common unit of measure = Economic results
Q: Why is decision-making be so hard?
A: For single variable decisions, we need to only know the direction
A: For multiple variable decisions, we need to quantify the magnitude of change

Five Economic Objectives
Express all changes in all variables
in the same unit of measure
Product Cost Cycle Time Risk Development Expense Product Value

Five Economic Objectives
Common unit of measure
Life-cycle profit impact
Product Cost Cycle Time Risk Development Expense Product Value

Key Economic View Principles
Select actions based on quantified overall economic impact
Everything’s interconnected: we can’t just change one thing
Quantify Cost of Delay: economic value of cycle time
Economic choices must be made continuously
Ensure decision makers feel both cost and benefit

Business Value is not a number
Business Value is a model
Business Value models what you value
The Business Value Model shows how our actions influence value delivered

Another benefit of Business Value Modelling Value Delivered Focus Alignment Clear Definition of Value Common Understanding Business Value Modelling Motivation Distributed Decisions Better and faster decisions

Improvement Cycle

Product Development Cycle

A Business Value Model is a Hypothesis
The Business Value Model is one of many models the team builds
No model is perfect, some are useful
Our model is a hypothesis, what we think will happen
We re-evaluate and improve the model regularly based on feedback
It’s not a “zombie” business case (one that comes back to bite you)
No one will be punished if we get it wrong

Prioritisation based on Value TODO BUSY RFT DONE Iteration Release Value

How else can you use this tool?

Business Value Modelling Stories of how we’ve used the tool

The Mobile Phone Company
Situation
Already spent 2 months on analysis
Identified 60 features
“ We need web-based self-service”
Reluctantly agreed to do a few days of analysis
Outcome
Only 10 out of those 60 features delivered value
Identified 4 new features crucial to the success of the project
25% of the value could be delivered within one month; no need for a web application

A Commercial Bank
Situation
Mythical belief in the value of the project
Project attempted 3 times previously
Estimated development cost continued to go up during analysis
Unclear project goals
Competing stakeholders
Outcome
Determined the validity of the existing business case of the project
Reduced the scope by 40% making it eligible for the existing program

The Transport Company
Before
A new team on their first Agile project
Two days of business analysis with the whole team
“ Aren’t we wasting too much time analysing?”
“ Why are the developers here?”
“ When can we start coding?”
After
In production 3 months earlier than predicted
“ I can’t believe we’ve already released. Normally we’d still be doing analysis.”
Developers came up with a new use for existing data, with large financial and ecological benefits

Exercise 6 Create a poster to explain Business Value Modelling

Summary
We build a Business Value Model to come to agreement on our hypothesis of value
We use the Business Value Model to prioritise the goals to be achieved
We use the Business Value Model to know where we are, see whether we’re going in the right direction and know when we’ve arrived
We check regularly and update our model as we learn

Session Summary Business Value Model Hypothesis of Value Prioritisation by Value Value-Driven Collaboration Test and Improve Hypothesis

Session Acceptance Tests
I can build a simple Business Value Model
I can explain the value of building a Business Value Model
I want to learn more about this topic

If you want to know more http://www.theiiba.org

Give the gift of feedback

Introductions Agile Coach. Storyteller. Games Maker. Consultant. Project Manager. Games Maker. Thank you Consultant His Blog: blog.nayima.be www.nayima.be NAYIMA We make play work Consultant-Coach Her Blog: www.selfishprogramming.org www.portiatung.com

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Agreeing on business value

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