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Agreeing on Business Valuewith Systems Thinking,[object Object],Portia Tung,[object Object],Pascal Van Cauwenberghe,[object Object]
Introductions,[object Object],Agile Coach.,[object Object],Storyteller.,[object Object],Games Maker.,[object Object],Consultant. ,[object Object],Project Manager. ,[object Object],Games Maker.,[object Object],Consultant,[object Object],His Blog: blog.nayima.be,[object Object],Consultant-Coach and Chief Strategy Officer	,[object Object],Her Blog: www.selfishprogramming.org,[object Object],NAYIMA,[object Object],(c) emergn and Nayima 2010,[object Object],We make play work,[object Object]
Session Goals,[object Object],[object Object]
 Show how to do Business Analysis in an Agile way
 Present a few techniques you can use right away
 Experience the process of creating a Business Value Model
Help you determine if your project is worth doing,[object Object]
1. Introduction to Customer Value Analysis™,[object Object]
The Problem We Face,[object Object],#!?!!#,[object Object]
Customer Value Analysis™,[object Object]
2. Understanding Project Goals,[object Object],By building a Goal Table,[object Object]
What will we do?,[object Object],Set the context,[object Object],Identify the project sponsor ,[object Object],Identify the project sponsor’s goals,[object Object],Quantify the project sponsor’s goals,[object Object],Identify the customer,[object Object],Identify the customer’s goals,[object Object],Quantify the customer’s goals,[object Object]
1. Set the Context,[object Object]
Jack, Customer Operations Manager of The Mobile Phone Company: ,[object Object],Customers can port their mobile phone number in or out. Porting in means a customer has a phone or buys one from us; we ensure that their existing mobile phone number is transferred to their account with us. Porting out means a customer leaves us for another provider and wants to transfer their number over.,[object Object],Customers don't have a good experience doing with porting their number. We know this because porting is the #2 cause of calls in our call center. [Shows spreadsheet with call reasons]. We also know that our Net Promoter Score (NPS, how likely are our customers to recommend us to their friends?) is low compared to our competitors.,[object Object],Also (and this is a big concern for me) our cost of operations is too high: all those calls to the call center cost us £X on average per call. I'm under pressure to lower this, to increase our profitability.,[object Object],We think that we can solve all of these problems by offering our services online to our customers.,[object Object]
Consultant: ,[object Object],First we have to understand your goals. Then we need to determine how to test that the goals have been achieved, so that you will know that we've delivered what you need. We use something called a "Goal Table" to summarise the goals of the project.,[object Object]
Goal Table,[object Object],Stakeholder, n: Role, Team or Organisation involved or affected by the project,[object Object],Goal, n: What a stakeholder wants to achieve,[object Object],Capability, n: Something we need to achieve the goal. Necessary, but maybe not sufficient,[object Object],Test, n: A way to decide if a goal has been achieved,[object Object],Measure, n: A way to determine how close we are to a goal,[object Object],Risk, n: Negative consequences of achieving the goal,[object Object]
Stakeholder, n: Role, Team or Organisation involved or affected by the project,[object Object],Goal, n: What a stakeholder want to achieve,[object Object],Capability, n: Something we need to achieve the goal. Necessary, but maybe not sufficient,[object Object],Test, n: A way to decide if a goal has been achieved,[object Object],Measure, n: A way to determine how close we are to a goal,[object Object],Risk, n: Negative consequences of achieving the goal,[object Object]
Identify key stakeholders and their goals,[object Object],Project Sponsor,[object Object],Customer(s),[object Object]
Goal Table,[object Object],Let’s agree on the goals first and worry about the means later,[object Object]
2. Identify the project sponsor,[object Object]
Project Sponsor,[object Object],Sets the goals,[object Object],Specifies deadlines and constraints,[object Object],Pays for the project,[object Object]
Identify Stakeholders,[object Object]
Jack: That makes me the project sponsor. As Customer Ops Manager.,[object Object],Consultant: We’ll start by adding you to the stakeholder list, as you'll be the most important stakeholder during the whole process. We'll also add the customer to the list, as we need to ensure that their goals are met.,[object Object],Jack: Of course. We should always focus on the customers’ needs.,[object Object]
Identify Stakeholders,[object Object]
Customer, n : Those who buy, install and/or use the product or service produced by the project,[object Object],Project Sponsor, n: Sets the goals, deadlines and constraints of the project. Pays for the project.,[object Object],Project Customer, n: Represents the project sponsor. Works closely with the project team. Implements the goals of the Project Sponsor,[object Object]
3. Identify the project sponsor’s goals,[object Object],For the project,[object Object]
Identify Goals,[object Object]
Consultant: We'll fill in the goals in no particular order and prioritise them later. The first goal you mentioned was "Customer experience". The second was how likely customers are to recommend you, the Net Promoter Score. We'll add them to the list.,[object Object],Project Sponsor: Yes, because when customers recommend us our revenue increases.,[object Object],Consultant: Let’s add increasing revenue as a goal to the Goal Table. ,[object Object]
Identify Goals,[object Object]
Agree on the definition of goals by specifying tests and measures,[object Object]
Consultant: Can you explain what you understand by “good customer experience"?,[object Object],Project Sponsor: Good customer experience means that the customer can do what they set out to do, simply, efficiently and without surprises.,[object Object],Consultant: How can we measure improvement in customer experience?,[object Object],Project Sponsor: That's simple: we know how many complaints there are related to porting today. If the number of complaints goes down we can conclude it’s because customers are happier.,[object Object],Consultant: I'll add "Number of complaints" to the way we measure that the goal has been attained. We can take the numbers from your spreadsheet with call reasons. What would it take to make this project a success?,[object Object],Project Sponsor: We've set ourselves a goal of reducing the number of calls by 50% within one year. It's an ambitious goal, but if we all work together I'm confident we'll get there.,[object Object],Consultant: Okay, we’ll add that goal to the tests and measures.,[object Object]
Specify Tests and Measures,[object Object]
Measure, n: How to get the numbers to verify that a goal has been met.,[object Object],For example: Number of complaints as reported in monthly call summary report => A number,[object Object],Test, n: How to verify that a goal has been met.,[object Object],For example: Number of complaints as reported in monthly call summary report reduced by 50%, relative to situation on DD/MM/YYYY => Yes/No,[object Object],Target, n: Specifies by when to achieve a goal,[object Object],For example: By next year, number of complaints as reported in monthly call summary report reduced by 50%, relative to situation on DD/MM/YYYY => Achieved/Not Achieved,[object Object]
Consultant: One way to reduce the number of calls would be to have fewer customers.,[object Object],Project Sponsor: That’s not funny. We mustn't do anything that drives people away!,[object Object],Consultant: I'll add "Retain customers" to the list of goals. It may seem obvious, but it’s important to make the goals crystal clear. Going back to the Net Promoter score. How can we measure this and what do you want to achieve by increasing it?,[object Object],Project Sponsor: We get quarterly NPS ratings. At the moment they're around 8%. I'd have to look up the exact number. Our competitors are typically above 10%. To achieve our revenue targets we need to get this number up to 15%.,[object Object]
Consultant: You mentioned you're under pressure to reduce cost. Will you tell me more about that?,[object Object],Project Sponsor: Our cost of operations is vital to our profitability. If we reduce complaints, I expect our cost to go down, but I want to look into other ways we can reduce our costs. Reducing call center cost is one of my major objectives this year.,[object Object],Consultant: How would you measure that cost?,[object Object],Project Sponsor: Well, we can count the number of people working there. That's our biggest cost factor. We can look at the monthly OPEX report to get the full cost.,[object Object]
Identify More Goals andMore Measures,[object Object]
Consultant: [Summarises contents of the Goal Table]Did I understand your goals correctly?,[object Object],Project Sponsor: Yes, but there’s more. We're under pressure from  the regulators. It’s come to the attention of the regulators that the porting process is too slow and fails frequently.,[object Object],Consultant: If I understand correctly, you need to reduce the cycle time to port a number. Is that correct?,[object Object],Project Sponsor: Yes. Now it can take as long as two days. To keep the regulators off our backs we need to bring this down to one day. And fast. Customer expectation is two hours, as that's what's being offered by most of our competitors. We expect the regulators to make this mandatory in the near feature, so we need to be ready to port numbers more quickly.,[object Object]
Consultant: How many complaints do you get about the speed of porting numbers?,[object Object],Project Sponsor: It’s the second-largest reason for number porting complaints. We think that by offering this service as online self-service option we will speed things up a lot AND we'll be able to save on call centre costs.,[object Object],Consultant: I see. We already have the decreased cycle time and cost reduction goals in the goal table. What else would the online self-service option provide? How does the customer benefit?,[object Object],Project Sponsor: Well, the customer would benefit greatly from having those services available to use when and where they choose. It's much more convenient than calling our call centre. And our brand would benefit: we're in the communications and internet sector; we need to be seen to embrace the latest communication channels and technology.,[object Object]
Find the goals behind solutions requested by the stakeholders,[object Object],What benefits will the solution bring to the customer, the CFO and the CEO?,[object Object]
Goals Identified So Far,[object Object]
4. Quantify the project sponsor’s goals with tests and measures,[object Object]
Goals Identified So Far,[object Object]
Quantified Goals,[object Object]
Use question marks to indicate missing information,[object Object],Identify the stakeholders who have the information,[object Object],Gather the missing information,[object Object]
5. Identify the customer(s),[object Object],Who uses the services and products we deliver?,[object Object]
Consultant: Who are the users of these services?,[object Object],Project Sponsor: They’re our customers. Or to be more exact, there are two types of customers: Existing customers who leave us and want to port their number out.  New customers who want to port their number in.,[object Object]
6. Identify the customer’s goals,[object Object],Just like we did with the project sponsor,[object Object]
Consultant: What do these customers want?,[object Object],Project Sponsor: They want to port their number, obviously.,[object Object],Consultant: What’s the benefit of porting for the customer?,[object Object],Project Sponsor: They can keep their existing number. That means their contacts can keep calling them without having to update the number. These contacts shouldn’t notice that the customer has changed provider.,[object Object]
Goals of the Customer,[object Object]
7. Quantify the customer’s goals,[object Object],Just like we did with the project sponsor,[object Object]
Quantified Customer goals,[object Object]
Now we’ve got an initial Goal Table...,[object Object],We have what we need to create,[object Object],our initial Business Value model,[object Object]
What have we done?,[object Object],Set the context,[object Object],Identify the project sponsor ,[object Object],Identify the project sponsor’s goals,[object Object],Quantify the project sponsor’s goals,[object Object],Identify the customer(s),[object Object],Identify the customer’s goals,[object Object],Quantify the customer’s goals,[object Object]
Exercise 1,[object Object],Build a Business Value Model,[object Object]
Building a Business Value Model,[object Object],Work in groups per table,[object Object],Use Post-Its to make model easy to change,[object Object],When you have a question or an issue,[object Object],Write it on a red Post-It,[object Object],Continue working,[object Object],Resolve issues and questions when we come round to your table,[object Object]
Building a Business Value Model,[object Object],Choose a small (4-6) number of measures,[object Object],Balanced: financial, people, organisation,[object Object],Identify relationships,[object Object],Build a model that you can use to:,[object Object],Determine successful outcome,[object Object],Steer the project,[object Object],Add more measures if needed,[object Object]
Generic example,[object Object],A,[object Object],B,[object Object],C,[object Object],D,[object Object],Organisation,[object Object],People,[object Object],Financial,[object Object]
For example,[object Object],Unit Test coverage,[object Object],# of Issues found by customer,[object Object],Customer Satisfaction,[object Object],Velocity,[object Object],Project Cost,[object Object],Unit Test Quality,[object Object],Financial,[object Object],People,[object Object],Organisation,[object Object]
Building a Business Value Model,[object Object],Choose a small (4-6) number of measures,[object Object],Balanced: financial, people, organisation,[object Object],Identify relationships,[object Object],Build a model that you can use to:,[object Object],Determine successful outcome,[object Object],Steer the project,[object Object],Add more measures if needed,[object Object],Time’s up!,[object Object],6 min,[object Object]
Present your model,[object Object],A few examples of Business Value Models,[object Object]
Exercise 2,[object Object],Improve your Business Value Model,[object Object]
Improving a Business Value Model,[object Object],One person per table goes to the next table,[object Object],To bring fresh perspective and ideas,[object Object],Ensure we have indicators to,[object Object],Determine successful outcome (late, lagging),[object Object],Steer the project (early, leading),[object Object],Identify constraints, things we can’t change,[object Object],Regulations, goals of other projects, company values,[object Object],How do you measure them?,[object Object],Add constraints them to the model,[object Object],How are they related to the goals?,[object Object]
For example,[object Object],Lagging,[object Object],Leading/Lagging,[object Object],Leading,[object Object],Unit Test coverage,[object Object],# of Issues found by customer,[object Object],Customer Satisfaction,[object Object],Velocity,[object Object],Project Cost,[object Object],Unit Test Quality,[object Object]
For example,[object Object],Lagging,[object Object],Leading/Lagging,[object Object],Leading,[object Object],Must integrate with System XYZ,[object Object],Speed of Service,[object Object],Unit Test coverage,[object Object],# of Issues found by customer,[object Object],Customer Satisfaction,[object Object],Velocity,[object Object],Project Cost,[object Object],Unit Test Quality,[object Object]
Improving a Business Value Model,[object Object],One person per table goes to the next table,[object Object],To bring fresh perspective and ideas,[object Object],Ensure we have indicators to,[object Object],Determine successful outcome (late, lagging),[object Object],Steer the project (early, leading),[object Object],Identify constraints, things we can’t change,[object Object],Regulations, goals of other projects, company values,[object Object],How do you measure them?,[object Object],Add constraints them to the model,[object Object],How are they related to the goals?,[object Object],Time’s up!,[object Object],6 min,[object Object]
Present your model,[object Object],A few examples of Business Value Models,[object Object]
Exercise 3,[object Object],More stakeholders and goals,[object Object]
More stakeholders,[object Object],Who else is involved to provide porting in/out service to customers?,[object Object],What are their goals?,[object Object],How do we know we’ve achieved them?,[object Object],How does that impact our Business Value Model?,[object Object],Time’s up!,[object Object],6 min,[object Object]
Customer Value Analysis™ in practice,[object Object]
The Logical Thinking Process,[object Object]
The Logical Thinking Process,[object Object],Intermediate Objectives Map,[object Object],Prerequisite/,[object Object],Transition Tree,[object Object],How do we get there?,[object Object],In small steps.,[object Object],What is our goal?,[object Object],What are we missing?,[object Object],Future Reality Tree,[object Object],Current Reality Tree,[object Object],Would that work?,[object Object],What could possibly go wrong?,[object Object],Why don’t we have ,[object Object],what we need?,[object Object],Conflict Resolution Diagram,[object Object],What could be done to resolve the ,[object Object],underlying fundamental conflict?,[object Object]
Using the Logical Thinking Process,[object Object],Intermediate Objectives Map,[object Object],Current Reality Tree,[object Object],Conflict Resolution Diagram,[object Object],Future Reality Tree,[object Object],Prerequisite/,[object Object],Transition Tree,[object Object],Context Diagram,[object Object],Business Value Model,[object Object],Plan,[object Object]
Writing stories made easy,[object Object],Goal,[object Object],AS A...,[object Object],TO ACHIEVE...,[object Object],I NEED...,[object Object],GOTCHAS,[object Object],Stakeholder,[object Object],Capability,[object Object],Test and ,[object Object],measure,[object Object],Risk,[object Object],I KNOW I GOT,[object Object],IT WHEN...,[object Object],TO ACHIEVE ...,[object Object],AS A ...,[object Object],I NEED ...,[object Object],PASSES,[object Object],IT’S DONE WHEN ...,[object Object],TO NOT ACHIEVE ...,[object Object],I NEED ... Another capability,[object Object]
User Story Carpaccio,[object Object],Goal Table,[object Object],Project Level Story,[object Object],Project Level Story,[object Object],Project Level Story,[object Object],Project Level Story,[object Object],Release Level Story,[object Object],Release Level Story,[object Object],Release Level Story,[object Object],Release Level Story,[object Object],Iteration Level Story,[object Object],Iteration Level Story,[object Object],Iteration Level Story,[object Object],Iteration Level Story,[object Object],Iteration Level Story,[object Object],Iteration Level Story,[object Object],Iteration Level Story,[object Object],Iteration Level Story,[object Object]
Kanban board,[object Object],TODO,[object Object],BUSY,[object Object],RFT,[object Object],DONE,[object Object],Iteration,[object Object],Release,[object Object],Project,[object Object]
Work in Progress limits,[object Object],TODO,[object Object],BUSY,[object Object],RFT,[object Object],DONE,[object Object],Iteration,[object Object],Release,[object Object],Project,[object Object]
Yeah-but, no-but, yeah-but!,[object Object]
Objections to Customer Value Analysis™,[object Object],“We’ve spent 6 months on analysis already”,[object Object],“Business Value is impossible to measure”,[object Object],“All stakeholders must be identified upfront”,[object Object],“It’s too structured”,[object Object],“This is waterfall analysis, it’s not agile”,[object Object],“This is too hard”,[object Object],“Doing this with the whole team is a waste of time”,[object Object]
Why we do Customer Value Analysis™,[object Object]
The Startup Bank,[object Object],Situation,[object Object],It’s December 1999,[object Object],“It has to be in java” (why?),[object Object],We have to build an online bank,[object Object],The launch press conference is booked for end of February 2000,[object Object],We have 2 developers,[object Object],Outcome,[object Object],We launched on time,[object Object],Full-featured frontend,[object Object],Combination  of manual and automated processes,[object Object],One country at first, then expanded to Europe,[object Object],All manual processes were automated gradually as customer base grew,[object Object]
A Commercial Bank,[object Object],Situation,[object Object],Mythical belief in the value of the project ,[object Object],Project attempted 3 times previously,[object Object],Estimated development cost continued to go up during analysis,[object Object],Unclear project goals ,[object Object],Competing stakeholders,[object Object],Outcome,[object Object],Determined the validity of the existing business case of the project,[object Object],Reduced the scope by 40% making it eligible for the existing program,[object Object]
The Phone Company,[object Object],Situation,[object Object],Already spent 2 months on analysis,[object Object],Identified 60 features,[object Object],“We need web-based self-service”,[object Object],Reluctantly agreed to do a few days of Customer Value Analysis™,[object Object],Outcome,[object Object],Only 10 out of those 60 features delivered value,[object Object],Identified 4 new features crucial to the success of the project,[object Object],25% of the value could be delivered within one month; no need for a web application,[object Object]
Benefits of Customer Value Analysis™,[object Object],Objection : ,[object Object],	“We’ve spent 6 months on analysis already”,[object Object],Answer:,[object Object],	“Given a project costing $1,000,000 a few days invested in Customer Value Analysis™ is a worthwhile investment”,[object Object],Benefit:,[object Object],	Reduced scope, clear and common goals, earlier delivery more than paid back the investment,[object Object]
Benefits of Customer Value Analysis™,[object Object],Objection : ,[object Object],	“Business Value is impossible to measure”,[object Object],Answer:,[object Object],	“If it’s important, we’ll find a way to measure it. If it’s not important, why are we doing this?”,[object Object],Benefit:,[object Object],	We talk about value before cost; we have unambiguous goals and we see we’re getting closer,[object Object]
Benefits of Customer Value Analysis™,[object Object],Objection : ,[object Object],	“All stakeholders must be identified upfront”,[object Object],Answer:,[object Object],	“Correct. By starting with the goals of the sponsor and the customer(s), we’ll discover everyone who needs to be involved”,[object Object],Benefit:,[object Object],	We don’t “forget” stakeholders.,[object Object]
Benefits of Customer Value Analysis™,[object Object],Objection : ,[object Object],	“It’s too structured”,[object Object],Answer:,[object Object],	“Structure liberates rather than constrains creativity. The techniques provide all the right questions. The answers are still up to you.”,[object Object],Benefit:,[object Object],	Provided guidance and visibility into the analysis work. We don’t have to remember too much, the models show us what we don’t know yet.,[object Object]
Benefits of Customer Value Analysis™,[object Object],Objection : ,[object Object],	“This is waterfall analysis, it’s not agile”,[object Object],Answer:,[object Object],	“We’ve found that this work reduces implementation time significantly and ensures that we identify what we really need”,[object Object],Benefit:,[object Object],	A day of analysis can cut weeks of implementation time. No more “It’s what I asked for”. Instead “Great! This is exactly what we need.”,[object Object]
Benefits of Customer Value Analysis™,[object Object],Objection : ,[object Object],	“This is too hard”,[object Object],Answer:,[object Object],	“Let’s try it on (part of) one project, you’ll be surprised how much we’ll get done in a few days”,[object Object],Benefit:,[object Object],	The small steps make analysis work accessible to everyone involved in the project, so we can use the intelligence of the whole team,[object Object]
Benefits of Customer Value Analysis™,[object Object],Objection : ,[object Object],	“Doing this with the whole team is a waste of time”,[object Object],Answer:,[object Object],	“We all have to understand the goal. The fastest way to do this is by building the model together”,[object Object],Benefit:,[object Object],	The whole team knows why they’re doing the project; developers and testers come up with unexpected product ideas,[object Object]
A Business Value Model is a Hypothesis,[object Object],The Business Value Model is one of many models we build. None of them are perfect.,[object Object],Our model is a hypothesis, what we think will happen.,[object Object],We re-evaluate and improve the model regularly based on feedback,[object Object],It’s not a static business case. We won’t be punished if we get it wrong.,[object Object]
Summary,[object Object],We build a Goal Table to understand who needs what and why they need it,[object Object],We build a Business Value Model to come to agreement on our definition of value,[object Object],We use the Business Value Model to prioritise the goals to be achieved,[object Object],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,[object Object]

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Business value by systems thinking

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  • 4. Show how to do Business Analysis in an Agile way
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  • 93. Show how to do Business Analysis in an Agile way
  • 94. Present a few techniques you can use right away
  • 95. Experience the process of creating a Business Value Model
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Editor's Notes

  1. Portia and Pascal introduce themselves by sharing a bit about their background.
  2. Portia and Pascal introduce themselves by sharing a bit about their background.