The document discusses the importance of understanding the time-value profile in software development and the value of agile methodologies over traditional approaches. It emphasizes that delivering value sooner often yields greater financial returns and underscores the need for regular delivery, effective stakeholder communication, and strategic planning to maximize value while managing costs. Key lessons highlight that deadlines should be flexible and tied to value, urging teams to prioritize features based on their potential contribution to revenue.

1. Evolving #NoProjects -> Con5nuous
Allan Kelly - @allankellynet
allan@allankelly.net
Planning for Value
How much? When?
Agile on the Beach
July 2017

3. relax

4. Is this project right for Agile?
Or is Waterfall be>er here?
Is this project right for Kanban?
Or is Scrum be>er here?

5. Who cares about
right?
Which will make more
money?

6. Agile makes more $ £ € because it
delivers something sooner

7. Today’s Lesson #1
A li>le bit Soon
is
Worth more than a lot
delivered Later

8. Today’s Lesson #2
Know the Time-Value Profile
of the thing you are building

9. Today’s Lesson #3
Deadlines are elasSc by
value

10. Agile folk get it wrong!
• Give more
opportuniSes for
feedback
• Tighter feedback loops
• Allow for changing
requirements
• Improve quality
• Reduce risk
• They increase value
• They make more money
£€$
(O, and reduce risk,
improve quality, etc. etc.)
Regular deliveries are good because…

11. 20.00%
20.50%
21.00%
21.50%
22.00%
22.50%
23.00%
23.50%
24.00%
24.50%
25.00%
$ 0
$ 50,000
$ 100,000
$ 150,000
$ 200,000
$ 250,000
$ 300,000
Big bang delivery 12 monthly deliveries
Delivered in 1 Big Bang
NPV = $ 215,725
Value/Cost = 21.57%
12 monthly small bangs
NPV = $ 243,359
Value/Cost = 24.34%
$27,000
2.75%
$1 million – 1 year

12. Value delivered
Cost to build
over

13. “Price is what you pay.
Value is what you get.”
Warren Buffet

14. Which story first?
Value = $355,000
Time to delivery =
4 weeks
Value = $1,060,000
Time to delivery =
6 weeks
As a toy retailer I want an app
that allows kids to select from
my special range so that their
parents can buy.
As a toy retailer I want an app
that allows kids to make lists
of toys they want so their
parents can buy.

15. Which story first?
Value = $355,000
Time to delivery =
4 weeks
Value = $1,060,000
Time to delivery =
6 weeks
As a toy retailer I want an app
that allows kids to select from
my special HALLOWEEN range
so that their parents can buy.
As a toy retailer I want an app
that allows kids to make lists
of toys they want SANTA TO
BRING so their parents can
buy.
Today is 1 September

16. Time-Value Profile
How does value change over Ime?
0
200000
400000
600000
800000
1000000
1200000
Sep 1 Sep 15 Sep 29 Oct 13 Oct 27 Nov 10 Nov 24 Dec 8 Dec 22 Jan 5

17. 0
200000
400000
600000
800000
1000000
1200000
Sep 1 Sep 15 Sep 29 Oct 13 Oct 27 Nov 10 Nov 24 Dec 8 Dec 22 Jan 5
Value over 4 months
Santa app total value over 4 months
Delivery date
Total value for a
given date
Total value starts to fall
aner 15 September
To maximize value
deliver by 15 Sep 1 Sep-13 Oct
6 weeks

18. 0
200000
400000
600000
800000
1000000
1200000
Sep 1 Sep 15 Sep 29 Oct 13 Oct 27 Nov 10 Nov 24 Dec 8 Dec 22 Jan 5
Value over 4 months
Santa app total value over 4 months
1 Sep-13 Oct
6 weeks Use By Date
Best Before Date

19. 0
50000
100000
150000
200000
250000
300000
350000
400000
Sep 1 Sep 15 Sep 29 Oct 13 Oct 27 Nov 10 Nov 24 Dec 8 Dec 22 Jan 5
Product B value over 4 months
Halloween app value over 4 months
1 Sep -
28 Sep
4 weeks

20. 0
50000
100000
150000
200000
250000
300000
350000
400000
Sep 1 Sep 15 Sep 29 Oct 13 Oct 27 Nov 10 Nov 24 Dec 8 Dec 22 Jan 5
Product B value over 4 months
Halloween app value over 4 months
1 Sep -
28 Sep
4 weeks
Use By Date
Best Before Date

21. Together
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
Sep 1 Sep 15 Sep 29 Oct 13 Oct 27 Nov 10 Nov 24 Dec 8 Dec 22 Jan 5
Combined value from two apps
Santa app Halloween app

22. What do you want to do?
A. Do Halloween & then Santa
B. Do Santa & then Halloween
C. Do Halloween & forget Santa
D. Do Santa & forget Halloween
E. Change the esSmates
F. Do both and pray
G. Add more people

23. Re-use?
• How much of Halloween can be reused?
– How much of Santa can be taken from
Halloween?
• How much extra does reusable code cost?
– How much Sme does reusable add to the work?
• How much money is lost by delay?
• How much money is gained from early
delivery?

24. Reusability
increases
RISK
Santa depends
on Halloween

25. What do you want to do?
A. Do Halloween & forget Santa
B. Do Santa & forget Halloween
C. Do Halloween & then Santa
D. Do Santa & then Halloween
E. Change the esSmates
F. Do both and pray
G. Add more people
H. Reuse

26. Santa first, Halloween second
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1 2 3 4 5 6 7 8 9 10
Combined value from two apps
Halloween app Santa app
1 Sep-13 Oct
6 weeks
13 Oct
– 9 Nov

27. Santa first
App makes $1,025,000
$35,000 lost because it was not ready by
13 October
Halloween app makes $0
Total = $1,025,000

28. 0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1 2 3 4 5 6 7 8 9 10
Combined value from two apps
Halloween app Santa app
1 Sep -
28 Sep
1 Sep-13 Oct
6 weeks
28 Sep-9 Nov
6 weeks
13 Oct
– 9 Nov

29. Halloween makes $340,000
$15,000 lost because not ready
before 29 September
Santa makes $800,000
$225,000 lost because it is not ready
unSl 10 November
Halloween first

30. Halloween comes first
Santa first
Total = $1,025,000
Halloween first
Total = $1,140,000
$115,000 more

31. Opportunity Cost of Delay
• Extra costs incurred because delivery is late
– e.g. temporary staff, priority shipping, penalty
fines
• Value foregone:
– Lost revenue opportuniSes
– Not being in the market (less Sme on sale)
– Not being available before criScal date
– Not being in the market before compeStors

32. Time is money?
More Sme -> More costs
More Sme -> Less revenue
(Usually) Revenue is inversely proporSonal to
Sme to delivery

33. Opportunity Cost of Delay
“6 month delay can be worth 33% of life
cycle profits”
McKinsey (Reinertsen) 1983
Principles of Product Development
Reinertsen, 2009

34. Deadlines are analogue
Different dates result in different
values
Deadlines are not binary
(all or nothing)

35. I need this and I need it
YESTERDAY

36. Yesterday…
0
200
400
600
800
1000
1200
Yesterday Today Tomorrow
Best Before Date
Use By Date

37. I need this and I need it
YESTERDAY
O dear, I don’t have a
TARDIS (Sme machine) but
maybe I can get something for you
tomorrow?
Brilliant, I knew I could count
on you
If all the value accrued
yesterday then it is lost
If value sSll exists then it
might be worth doing

38. How do you get to value?
• Ask your stakeholders
• Do the analysis
• EsSmate

39. Value Poker
Like Planning Poker
• Value points not Effort points

41. 10,000
8,000
Do now Do soon Do later
5,000
Best before
+1mth
Best before
+6mths
Best before
+3mths

42. Time-Value Profile is an
input to planning
0
50000
100000
150000
200000
250000
300000
350000
400000
Sep 1 Sep 15 Sep 29 Oct 13 Oct 27 Nov 10 Nov 24 Dec 8 Dec 22 Jan 5
Product B value over 4 months

43. SoluSons must be built to:
a) Obtain as much of the value as possible
b) Within some Sme frame
c) For a cost which leaves some profit
How much profit is made
and
How much value is extracted
are negoIable.

44. Know the Time-Value profile
Know your target profit
Know how much you can spend
Work back to date & burn rate
Engineer, engineer

45. Allan Kelly…
Ø ConsulSng on sonware development & strategy
Ø Training for Agile
Author
– LiSle Book of Requirements & User Stories (2016)
h>p://www.leanpub.com/userstories
– Xanpan: Team Centric Agile Sonware Development (2014)
h>ps://leanpub.com/xanpan
– Business PaSerns for SoXware Developers (2012)
– Changing Sonware Development (2008)

46. More…
www.allankelly.net

47. LeanPub
h>ps://leanpub.com/cdigital
1. A li>le soon is worth more than
a lot later
2. Know the Sme-value profile
3. Deadlines are elasSc by value
allan@allankelly.net
Twi>er: @allankellynet
½price code:
AOTB2017
48 hours