DefineValuePrioritizeReq200804

8/14/2019 DefineValuePrioritizeReq200804

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Helping Product Owners DefineValue and Prioritize Requirements

So many decisions, moretime than we thought


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Kent J. McDonaldBusiness Systems Coach, Knowledge Bridge Partners

Founding Partner, Accelinnova

So many decisions, moretime than we thought


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Overview

Problems

Value Models Today

Why It Doesnt Work

Considerations

Purpose

New Models

Example


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The Problem(s)

The Business

Expects Us to Do

The Right Things

Methodologies Tell

Us How to Do

Things Right

How Do We Do This?

Who Decides?

And When?


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Features and Functions

Never Used

45%

Rarely Used

19%

Sometimes

16%

Often 13%

Always 7%

Always or Often

Used: 20%

Never or Rarely

Used: 64%

Standish Group Study, reported by CEO Jim Johnson, XP2002


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Value Models

ValueModel

Business Value

Costs

Costs

Benefits

How Do YouDetermine Costs?

How Do YouDetermine Benefits?


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Costs

Costs Associated with

the Team

Hardware Costs Software Licensing

Costs

Vendor Service Costs Impact to Operations

(Extra Staff)


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Benefits

Increased Revenue

Cost Reductions

Opportunity Costs Avoided

Fee and Penalty Avoidance

Support of Other Initiatives

Reputation

Improved Customer

Satisfaction


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Value Models

Value

Model

Business Value

CostsCosts

Benefits

This Is Hard.


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Measuring Business Value

Many Different Approaches Cash Flow

Net Present Value Internal Rate of Return

Return on Investment

These Can All Be Gamed

Uncertainty Hard to Factor

Other Factors ImpactValue


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Considerations Impact Value

Value

Model

Considerations

Business Value

CostsCosts

Benefits


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Considerations

Things That Could Impact

Value:

RisksRisks

AssumptionsAssumptions

ConstraintsConstraints


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Risks

Technical Difficulties

Changes in MarketConditions

Team Makeup and

Skill Set Domain Knowledge


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Assumptions

Availability of Team

Members

Market Demand forProduct

Team Velocity

Understanding ofDomain Knowledge


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Constraints

Market Window

External Events

Compliance Dates Budget Limit

Team Members

TechnicalArchitecture

Non FunctionalRequirements


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Collaboration Process

Agree to Purpose ofExercise

Brain Write

Stick Items on a Wall Group Like Items

Together

Provide Headlines forGroupings

Vote for Priority


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Considerations Impact Value

Value

Model

Considerations Business Value

CostsCosts

Benefits

That Didnt Help Much

How Do You Justify a Project That Does NotProvide Positive Business Value?


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Its a Strategic Project


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Value Model

Value

Model

Considerations

Purpose

Considerations

C

osts

C

osts

B

enefits

Business Value


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Project Purpose

Optimists View:What Job Is theWhat Job Is the

Project Trying toProject Trying to

Get Done?Get Done?Pessimists View:

What Problem IsWhat Problem Is

the Project Tryingthe Project Tryingto Solve?to Solve?

The Key Is Common Understanding.The Key Is Common Understanding.


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Purpose

Tools to Help

Discover Purpose:

Purpose-BasedAlignment Model

The 5 Questions

Elevator Statement

Innovation Game


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Strategic Development

Mission Vision Values

Strategic Intent ~ Strategy~ Purpose

Long-Range Goals

Annual Objectives

Action Plans (what, who, when)

Individual Business ObjectivesTactical

Str

ategic

SCO / 5Q


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Strategic Development

Mission Vision Values

Strategic Intent ~ Strategy~ Purpose

Long-Range Goals

Annual Objectives

Action Plans (what, who, when)

Individual Business ObjectivesTactical

Str

ategic

SCO / 5Q

Start Here


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Strategic Intent

Cost

Leadership

Best Customer Solution

Competitive Position

Strategic

Scope

Cost Differentiation

Broad

Narrow

Product

Leadership

Where is Your Organization ?


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Defining Strategy

Answer These Questions:3. Whom do we serve and what do they want and

need most?

4. What services do we provide to help them?

5. How do we know were doing a good job?

6. What is the best way to provide these services?

7. How should we organize to deliver theseservices?

Identifies Strategic Decision FiltersStrategic Decision Filters


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Purpose-Based Alignment

MarketDifferentiating

High

Low

Mission CriticalLow High

Differentiating

ParityWho Cares?

Partner

Purpose Does Not Equal PriorityPurpose Does Not Equal Priority


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Purpose Statement

Stating the Purpose:

Your Elevator Statement

For Products and Services: Who Is It For?

What Do They Need?

Key Benefit Is?

Why Is It Different Than the

Competition?


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Purpose Statement

Your Elevator StatementFor Business Problems:

Whats the Problem? Who Does It Affect?

Whats the Impact?

Whats a SuccessfulSolution?


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Purpose as a Product Box

Product Box

An Innovation Gameby Luke Hohmann

Build ImaginaryPackaging for Product

Customers Identify theProblems They WantSolved

Identifies ExpectedBenefits

http://www.jonathanboutelle.com/mt/archives/2005/11/offline_gamelik.html


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Example: Health Insurance

Health Insurance Example:

Create a 24x7 resource people could call

to get health care questions answered andget direction to sources for care.

E l H lth I


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Example: Health InsuranceIntent and Filters

Strategic Intent:Strategic Intent:


Decision Filter:Decision Filter:

Does this initiative help to

improve health care value

for our stakeholders?

Cost

Leadership


Competitive Position

Strategic

Scope

Cost Differentiation

Broad

Narrow

ProductLeadership

E l H lth I


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Example: Health InsurancePurpose Alignment

Market

Differentiating

High

Low

Mission CriticalLow High

Healthcare

analytics

Member

focus

Claims Processing

Enrollment

Customer Service

Disability

Insurance

Pharmacy

Dental

E l H lth I


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Example: Health InsurancePurpose Statements

Whats the Problem?Healthcare industry is difficult to navigate

Who Does It Affect?Members

Whats the Impact?Confused about appropriate place to receive care,resulting in needless expenses

Whats a Successful Solution?Provides members a single, trusted point of contact toget health and wellness and urgent care questionsanswered

E l H lth I


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Example: Health InsurancePurpose

Provide members a

single point of entryto heath insurers

health and wellness

resources.

Answer members

urgent care questions

E l H lth I


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Example: Health InsuranceCosts

Software

Development Costs Vendor Development

Costs

Ongoing OperationalCosts

E l H lth I


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Example: Health InsuranceBenefits

Consolidated

Member Point of

Contact

Cost Avoidance

Gather Clinical

Information

E l H lth I


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Example: Health InsuranceConsiderations

Vendor Size

Integration with

Vendor Systems Date Available

Commitments toCustomers

Dependency onOther Project toSupply Data

E l H lth I


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Example: Health InsuranceIs Business Value Defined?

Costs >> Benefits

Increased Information

About Members

Customer

Satisfaction More Appropriate

Care Delivery

Better Informed


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Example

Do We Know What

the Right Stuff Is? Do We Know

What to Build First?

Who Decides?

So Why Do We Care About


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So Why Do We Care AboutBusiness Value?


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Its All About Decisions


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Value Model?

Value

Model

Considerations

Purpose

Considerations

C

osts

C

osts

Benefits

Business Value


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Value Model!

Value

Model

Considerations

Purpose

Considerations

Costs

Costs

Benefits

What do

we do?

When do

we do it?

When

do we

decide?


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What Do We Do?


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Is Analysis a Lost Art?

Do I Understand the Problem? Do I Understand the Guidelines For a Solution?

Have I Consistently Described the Solution?

Can I Verify the Solution?


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Doing the Right Stuff

Tie Project Purpose

to Strategy Factor in

Considerations

Utilize Cost/BenefitInformation


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Tie Purpose to Strategy

What Is the Project Purpose?What Is the Project Purpose?

Does the Purpose Align withDoes the Purpose Align with

Decision Filters?Decision Filters?

Yes Continue!

No Stop!Stop!

What Decision Filters? Go Back and Define Some.

Does

purpose

meet

decisionfilters?

Continue

What

Decision

Filters?

No

Yes


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Factor In Considerations

A Business Driven

Deadline?

Impact on OtherProjects?

Impacted by Other

Projects? Availability of Key

People?

Impact of Regulations?


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Utilize Cost/Benefit Analysis

Adjust for

Considerations

Use ConsistentAnalysis Between

Projects

UnderstandUncertainty in

Estimates

Selecting The Right


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Selecting The RightRequirements

Look at the RightRight Level

Put the AnalysisAnalysis Back

In Business Analysis

Do the Right Stuff

What Just MeetsJust Meets

Purpose?


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Requirements Levels

Why Do This Project?

What Do Users Want?

What Do We Build?

The Software Requirements

Memory Joggerby Ellen Gottesdiener

This Is theThis Is the

Right LevelRight Level

Business

Requirements

User

Requirements

Software

Requirements


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Minimum Necessary Set

Minimum Features to Create Value

Minimum Features to Replace Existing

System Base on Project

Purpose and

Considerations


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When Do We Do It?


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Prioritizing Features

Determine Relative

Value

Priority = Order

Revisions to Order

Based on Technical

Considerations


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Relative Value of Feature

Relative Benefit

Relative Cost

Benefit Measured inBenefit Points

Cost Measured in

Story Points Resolve Outliers


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Value in the Extreme

Team DiscussesFeature

Each MemberIndicates NumericalEstimate

Discuss Outliers

Outliers IndicateAssumptions,Considerations

Change Feature Order Based


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Change Feature Order Basedon Considerations

Move Up Features That Provide Information

Move Down Features That Depend on Others

Group Features Together That Have Synergy

h id ?


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When Do We Decide?

R l O i


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Real Options

Deciding Is Not a Once in a


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Deciding Is Not a Once in aLifetime Event

Knowledge Improves

Business Conditions

Change Project Conditions

Change

Do You Know WhyYou Are Deciding

Early?

D id Wh Sh ld D id


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Decide Who Should Decide

Who Makes TheDecision?

Who Makes Sure It Is

Enacted? Understand Before

Making Decisions

Decision Leader

NOTNOT For Purposes Of

Placing Blame

R l Wh D id ?


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Roles = Who Decides?

Many Roles forBusiness Stakeholders Customers Product Owners Users

Need Input From

Multiple People

Need To Know Who

Ultimately Decides

S Thi t R b


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Some Things to Remember

Value Impacted By

Purpose And

Considerations

Business Value Is

All About Decisions

Decide Wisely

Decide Who Should

Decide Wisely

Q ti ?


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Questions?

R f


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References

Stand Back and Deliver, co-author,

published by Addison Wesley, due out late

2008 or early 2009 The Software Requirements Memory

Jogger, Ellen Gottesdiener

Innovation Games, Luke Hohmann

C t t


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Contact

Kent J McDonald: www.knowledgebridgepartners.com

www.accelinnova.com

515.229.6929

[email protected]

Documents

DefineValuePrioritizeReq200804