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Prioritizing Value Beyond Boundaries - Scrum Gathering Bengaluru - Natalie Warnert

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A value mapping activity that compares "business" value to "user" value using financial measurements and kano analysis to help prioritize and value features. SGBLR

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Prioritizing Value Beyond Boundaries - Scrum Gathering Bengaluru - Natalie Warnert

  1. 1. Prioritizing Value Beyond Boundaries Natalie Warnert #sgblr June 28, 2016
  2. 2. Natalie Warnert • Agile Transformation Coach • MA, SPC, CSP, CSM, PSM • #WomenInAgile Web: www.nataliewarnert.com Twitter: @nataliewarnert
  3. 3. Why is value measurement important to me?
  4. 4. What do the documents say? • Agile Principles: – Our highest priority is to satisfy the customer through early and continuous delivery of valuable software. • Scrum Guide: – A framework within which people can address complex adaptive problems, while productively and creatively delivering products of the highest possible value. – The Product Owner is responsible for maximizing the value of the product and the work of the Development Team. www.agilemanifesto.org, www.scrumguides.org
  5. 5. The fight for priority • This is more valuable than that! • Priority can look very different at different levels of the organization • Portfolio • Program/Product • Team
  6. 6. Business Value Measurement val·ue /ˈvalyo͞o/ Verb 1.estimate the monetary worth of (something). “the feature was valued at $45,000” Synonyms: evaluate, assess, estimate, appraise, price www.google.com
  7. 7. Business Value Measurement • Tangible • ROI (most common) – Net profit/cost of investment = ROI – OR… how much can we profit from this investment (percentage)? • Sales increase • Cost reduction • Net Present Value (NPV)
  8. 8. Business Value Measurement • But how tangible is it? • Can we estimate “value” on stories? Groups of stories? Non-functional requirements? • What is the relevant measure for the business and the product? • Who is our customer? • Who is our user?
  9. 9. Business Value Measurement –Cost of Delay • Cost of Delay – what is the cost of having NOT done this? [value + urgency + risk reduction & opportunity enablement]
  10. 10. Business Value Measurement –Cost of Delay • Cost of Delay – what is the cost of having NOT done this? [value + urgency + risk reduction & opportunity enablement] • If we have an equal cost of delay pick the shortest job first Feature Cost of Delay Duration A $2 2 B $2 1
  11. 11. Business Value Measurement –Cost of Delay • Cost of Delay – what is the cost of having NOT done this? [value + urgency + risk reduction & opportunity enablement] • If we have an equal cost of delay pick the shortest job first • If we have an equal duration pick highest CoD Feature Cost of Delay Duration A $2 2 C $1 2
  12. 12. Business Value Measurement –Cost of Delay • Cost of Delay – what is the cost of having NOT done this? [value + urgency + risk reduction/opportunity enablement] • What if it’s not one or the other? Feature Cost of Delay Duration A $2 2 B $2 1 C $1 2
  13. 13. Business Value Measurement –Cost of Delay • Cost of Delay – what is the cost of having NOT done this? • Weighted shortest job first (WSJF) • Implementation and decision to use CD3 = CoD/Duration Feature Cost of Delay Duration CD3 = CoD/Duration A $2 2 1 B $2 1 2 C $1 2 1/2
  14. 14. Business Value Measurement –Cost of Delay • Cost of Delay – what is the cost of having NOT done this? • Weighted shortest job first (WSJF) • Implementation and decision to use CD3 = CoD/Duration Feature Cost of Delay Duration CD3 = CoD/Duration A $2 2 1 B $2 1 2 C $1 2 1/2
  15. 15. Activity – 7 minutes • Prioritize the work items into a program roadmap based on tangible monetary measures only • Left = lower value • Right = higher value Lower Value Higher Value
  16. 16. Activity Debrief • What was difficult about the activity? • What were the first few items in your prioritization order? Last few? • How realistic is it to get everything done? • Which scope would likely get cut? • What was missing from the conversation about priority and valuation? • Take a picture of your priority arrangement.
  17. 17. Business Value Management • WSJF is important, but not as important as how we calculate it
  18. 18. Business Value Management • WSJF is important, but not as important as how we calculate it • Cost of Delay [value + urgency + risk reduction/opportunity enablement] – We forget components!
  19. 19. Business Value Management • WSJF is important, but not as important as how we calculate it • Cost of Delay [value + urgency + risk reduction/opportunity enablement] • And duration…
  20. 20. Business Value Management • WSJF is important, but not as important as how we calculate it • Cost of Delay [value + urgency + risk reduction/opportunity enablement] • And duration… • But it’s an estimation at best
  21. 21. Business Value Management • WSJF is important, but not as important as how we calculate it • Cost of Delay [value + urgency + risk reduction/opportunity enablement] • And duration… • But it’s an estimation at best • And when we estimate in a box (especially with money), we are more often than not WRONG
  22. 22. User Value Measurement • But the end user does not care about value as a measure
  23. 23. User Value Measurement • But the end user does not care about value as a measure • User thinks of value as: val·ue /ˈvalyo͞o/ Noun 1. the regard that something is held to deserve; the importance, worth, or usefulness of something. “this product is of great value” Synonyms: worth, usefulness, advantage, benefit, gain, good, help, merit www.google.com
  24. 24. User Value Measurement • As a…I want…so that…
  25. 25. User Value Measurement • As a…I want…so that… • As a customer/user/subscriber… • I want [certain functionality] • So that I can do something that is valuable to me and gain satisfaction by doing it
  26. 26. User Value Measurement • As a…I want…so that… • As a customer/user/subscriber… • I want [certain functionality] • So that I can do something that is valuable to me and gain satisfaction by doing it – Ease, time-saving – Unique/new/differentiating – NOT so that the company can make money off of me • Intangible
  27. 27. User Value Measurement • User cost of delay – What I NEED to do (basic/threshold) – What I WANT to do (performance) – What I haven’t thought to do yet (delight/excite)
  28. 28. User Value Measurement • The user doesn’t always know what they want: – “If I had asked people what they wanted, they would have said faster horses.” –Henry Ford • The business does not always know either: – “People don't want a quarter-inch drill, they want a quarter-inch hole.” – Theodore Levitt
  29. 29. User Value Measurement - Kano Very Satisfied Very Dissatisfied Need FulfilledNeed Unfulfilled
  30. 30. User Value Measurement - Kano Very Satisfied Very Dissatisfied Need FulfilledNeed Unfulfilled Basic
  31. 31. User Value Measurement - Kano Very Satisfied Very Dissatisfied Need FulfilledNeed Unfulfilled Basic Performance
  32. 32. User Value Measurement - Kano Very Satisfied Very Dissatisfied Need FulfilledNeed Unfulfilled Basic Performance Delight
  33. 33. User Value Measurement - Kano Very Satisfied Very Dissatisfied Need FulfilledNeed Unfulfilled Time Basic Performance Delight
  34. 34. Activity 2 – 7 minutes • Move feature cards ONLY vertically based on customer value factors • Discuss which buckets each feature could fit into based on what the customer values Lower Value Higher Value Delight: Don’t know I want Performance: I WANT Basic: I NEED
  35. 35. Activity 2 Debrief Lower Value Higher Value Delight: Don’t know I want Performance: I WANT Basic: I NEED
  36. 36. Activity 2 Debrief Lower Value Higher Value Delight: Don’t know I want Performance: I WANT Basic: I NEED
  37. 37. Activity 2 Debrief Lower Value Higher Value Delight: Don’t know I want Performance: I WANT Basic: I NEED
  38. 38. Activity 2 Debrief Lower Value Higher Value Delight: Don’t know I want Performance: I WANT Basic: I NEED
  39. 39. Activity 2 Debrief Lower Value Higher Value Delight: Don’t know I want Performance: I WANT Basic: I NEED
  40. 40. What is missing? User Feeling Money Run a business Build the right thing
  41. 41. Find the right balance User Feeling Money Run a business Build the right thing
  42. 42. Money vs. Feeling Very Satisfied Very Dissatisfied Need Unfulfilled Time Basic Performance Delight Valuation = Money Value = FeelingVs. Value Cost
  43. 43. Money vs. Feeling Very Satisfied Very Dissatisfied Need Unfulfilled Time Basic Performance Delight Valuation = Money Value = FeelingVs. Value Cost
  44. 44. Money vs. Feeling Very Satisfied Very Dissatisfied Need Unfulfilled Time Basic Performance Delight Valuation = Money Value = FeelingVs. Value Cost
  45. 45. Money vs. Feeling Very Satisfied Very Dissatisfied Need Unfulfilled Time Basic Performance Delight Valuation = Money Value = FeelingVs. Value Cost Program (value stream)
  46. 46. What if my product does not align with monetary/user value? • Switch out axes for other characteristics – Efficiency (transportation) – Compliance (government/legal) • What else? • Add a third dimension…
  47. 47. Why is value measurement important to me?
  48. 48. Wrap Up • Value is both a verb and a noun (like Agile) • Think about making money and the user – balance between importance • Development tier (level) can help influence decisions
  49. 49. Questions? Thank you! www.nataliewarnert.com Twitter: @nataliewarnert #sgblr Please fill out feedback for the session on the post-it notes and leave for me

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