The document discusses strategies for prioritizing product backlogs by balancing business value, risk, and cost. It emphasizes the importance of value determination and risk mitigation in the development process, advocating for collaborative decision-making and the use of prioritization frameworks. Additional resources, including training and literature, are provided to support Agile product management.

1. Real World Strategies for
Prioritizing the Product
Backlog
Greg Cohen Ron Lichty
Principal Consultant Interim VP of Engineering
280 Group LLC RonLichty@sbcGlobal.net
greg@280group.com
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2. About Us
Greg Cohen Ron Lichty
• Fifteen years of PM Experience • Twenty years Eng Mgmt Experience
– Med diagnostics and devices – Apple
• Chiron – Fujitsu
• Smith & Nephew – Charles Schwab
– Pandesic (SAP and Intel) – Razorfish
– IdealLab! – Zone Alarm
– Instill – startups
• Principal Consultant, 280 Group • Consulting VPE
• Certified Scrum Master • Certified Scrum Master
• SVPMA Board Member and former • SDForum Board Member
President
• Co-Author of next year’s
• Author “Agile Excellence for Product “Managing the Unmanageable:
Managers” Rules, Tools & Wisdom for Managing
Software People and Projects”
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3. Prioritizing by value is tough
and must be balanced with risk
Return
Risk &
Cost
Short term vs long term 3
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4. Agenda
• Overview
• Prioritizing by value
• Mitigating risk
• How to leverage emergent architecture
• Managing costs
• Impact of time on priority
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5. Prioritize product backlog
by business value
• Determine business value
• Value is often only realized by a collection of features
(e.g. multiple stories that work together)
• Value determination usually
requires judgment
• Individual’s value judgments
based on tacit knowledge
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6. Return on Investment
• To your business
• For your customer
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7. Market Opportunity Scores
Desired Outcomes Importance Satisfaction Opportunity
Be able to know if an accessory
8.5 2.1 14.9
is compatible with my camera
Minimize the time it takes to find
a camera that meets my skills 9.2 7.2 11.2
and budget
Be able to track my order from
7.3 9.0 5.6
purchase thru delivery
Algorithm:
Opportunity = Importance + (Importance – Satisfaction)
Anthony W. Ulwick, What Customers Want, 2005 7
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8. Buying Features
• Buy a feature1
– Create list of features
– Play with 4 to 7 customers at a time
– Price some feature so customers have to pool money
• Spend $100 of R&D
– Create list of features
– Ask customer to allocate R&D
budget to the list of features
1Luke Hohmann, Innovation Games, 2007. Online version http://innovationgames.com/online-games/ 8
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9. Subjective Value Determination
• Set a vision for the product and place each
requirement in the context of that vision
• Establish criteria and rank requirements
– Prioritization Matrix
– Buy-in is reinforced when criteria and rankings are
done as a group activity
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10. Example Matrix
Note: Cost and Risk still need to be considered
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11. Mitigating Risk
• Practice Risk-First Development
– Identify project risks
– Weigh the risk
• your project can tolerate
• your organization can tolerate
– Give priority to stories and
tasks that mitigate
unacceptable risk
– Consistent risk: UI
(need to iterate UI)
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12. Leveraging Emergent
Architecture
• “Gift” features: gifts from development
• Based on:
– Chartering
– “Commander’s Intent”
– Communicating vision
• Also based on listening for
brainstorms, insights
– Encourage them
– (but stop short of encouraging
out-of-process dev)
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13. Maximizing technical investment
and learning
• Let your team invest in work with technical
pay-off
– Early learning and maximal understanding
– Slash technical debt
– Reduce uncertainty
– Choosing / prioritizing backlog items
that facilitate design to emerge, prove
workflow, test architecture
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14. Managing Costs
• Collaboration
– Development can provide cost - at least relative
cost
– Product Owner can ask: What can I do to reduce
that cost - to get the ROI I want?
• Splitting
• MMF
• Alternatives
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15. Impact of time on priority
High risk New industry standard
Return Return
Time Time
Maintenance
Microprocessor
Upgrades
Return
Return
Time
Time
Denne & Cleland-Huang, Software by Numbers, 2004 15
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16. Risk, Return, Cost View
High Return
Feature 4
Feature 3
Feature 5
Low Risk High Risk
Feature 2
Feature 1
= cost
Low Return
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17. Summary
• Prioritizing by value is complicated
• Mitigate project risks by doing risk first
development
• At times it makes sense to place a high risk
item before a higher value item
• Need to balance Return, Cost, and Risk
• What you want and what it costs are a
conversation
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18. Additional Resources
1. Books
Agile Excellence for Product Managers
by Greg Cohen
2. Discussion Groups
a) “LeanPM” Yahoo! discussion group
b) 280 Group LinkedIn Group
3. Free PM Templates
www.280Group.com  Resources
4. Training
Agile Product Management Excellence Course
• AIPMM PMEC West Conference, May 24 - 26
• San Jose, June 11 (www.280group.com, Save 15% AGPME15)
• New York, June 25 (www.280group.com, Save 15% AGPME15)
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19. Thank You
Contact us
greg@280group.com
RonLichty@sbcGlobal.net
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