Agreeing on business value

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We talk a lot about "maximizing business value". We ask business people and product managers to prioritise by estimating the business value of user stories. But what exactly do we mean by business value?

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Agreeing on business value

  1. 1. Agreeing on Business Value Portia Tung Pascal Van Cauwenberghe
  2. 2. Introductions Consultant His Blog: blog.nayima.be www.nayima.be NAYIMAWe make play work Agile Coach. Storyteller. Games Maker. Consultant. Project Manager. Games Maker. Consultant-Coach Her Blog: www.selfishprogramming.org www.portiatung.com
  3. 3. Without a goal It’s hard to score
  4. 4. The Goal Work together to build a business value model
  5. 5. 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
  6. 6. What is Business Value?
  7. 7. How do you measure Business Value?
  8. 8. What Business Value means to us
  9. 9. The Challenge #!?!!# Sponsor Team Arrggghhh!!!Arrggghhh!!!Arrggghhh!!!
  10. 10. The Future Sponsor Team Arrggghhh!!!Arrggghhh!!!Arrggghhh!!! #!?!!#
  11. 11. The Future Sponsor Team The project goals are… We’ve a few ideas to increase the value Working together to create a common definition of Value.
  12. 12. A Useful Tool Business Value Modelling
  13. 13. What is Business Value • Business Value is not a number • Business Value is a model • Business Value models what you value
  14. 14. Ring-ring-ring… (The Simulation)
  15. 15. The New Kids on the Telco Block We’ll make you talk
  16. 16. Company Vision The world’s favourite mobile company by 2012 Things just work … …Help customers get value for money
  17. 17. Your Mission Do Business Value Modelling
  18. 18. 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
  19. 19. Building a Business Value Model (1) 1. Read your persona goals 2. Choose a small (4 - 5) number of goals 3. Balanced: financial, people, organisation 4. Represent all personas 5. One goal per Post-It
  20. 20. Exercise 1 Create your own Business Value Model
  21. 21. Building a Business Value Model (1) 1. Read your persona goals 2. Brainstorm a small (4 - 5) number of goals 3. Balanced: financial, people, organisation 4. Represent all personas 5. One goal per Post-It Time’s up! 10 min
  22. 22. Exercise 2 Identify measures
  23. 23. Building a Business Value Model (2) 1. Identify one measure per goal 2. Write the measure on the corresponding goal Post-It
  24. 24. Building a Business Value Model (2) 1. Identify one measure per goal 2. Write the measure on the corresponding goal Post-It Time’s up! 5 min
  25. 25. Exercise 3 Find leading indicators
  26. 26. Leading and Lagging indicators • Most measures can only be measured late, after customer use • These are called “Lagging indicators” • We want feedback sooner • We find measures that we can have sooner and that (we think) predict success with the real goals: “Leading indicators” • We can use leading indicators during the project
  27. 27. Building a Business Value Model (3) 1. Identify goals that can only be measured late 2. Identify goals that can be measured early and are good predictors 3. Add them as Post-Its
  28. 28. For example
  29. 29. Building a Business Value Model (3) 1. Identify goals that can only be measured late 2. Identify goals that can be measured early and are good predictors 3. Add them as Post-Its Time’s up! 5 min
  30. 30. Exercise 4 Find relationships between goals
  31. 31. Diagram of Effects • We’re looking at complex systems • Changing one variable will affect another • A “Diagram of effects” shows how we think these measures affect one another
  32. 32. Why should we do Business Value Modelling? Value Delivered Focus Alignment Clear Definition of Value Common Understanding Business Value Modelling Motivation
  33. 33. Building a Business Value Model (4) 1. Identify and explain relationships between lagging indicators 2. Identify and explain relationships between leading indicators 3. Identify and explain relationships between leading and lagging indicators 4. Add any missing measures that are needed to explain the system
  34. 34. For example
  35. 35. Building a Business Value Model (4) 1. Identify and explain relationships between lagging indicators 2. Identify and explain relationships between leading indicators 3. Identify and explain relationships between leading and lagging indicators 4. Add any missing measures that are needed to explain the system Time’s up! 5 min
  36. 36. The Theory Behind Business Value Modelling
  37. 37. Improvement Cycle
  38. 38. Product Development Cycle
  39. 39. 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 haunt you) • We won’t be punished if we get it wrong
  40. 40. Prioritisation based on Value TODO BUSY RFT DONEIterationReleaseValue
  41. 41. Where else can you use this tool?
  42. 42. Business Value Modelling Stories of how we’ve used the tool
  43. 43. 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
  44. 44. 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
  45. 45. 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 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
  46. 46. Exercise 5 Create a poster to explain the Business Value Modelling tool
  47. 47. 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
  48. 48. If you want to know more http://www.theiiba.org
  49. 49. Give the gift of feedback Perfection Game on back of the Session cards
  50. 50. Introductions Consultant His Blog: blog.nayima.be www.nayima.be NAYIMAWe make play work Agile Coach. Storyteller. Games Maker. Consultant. Project Manager. Games Maker. Consultant-Coach Her Blog: www.selfishprogramming.org www.portiatung.com Thank you

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