1. Is It Worth It:Using A Business Value Model toGuide
Decisions Kent J. McDonald Knowledge Bridge Partners
2. Discussion Topics Business Value? Purpose Considerations
Costs & Benefits Using the BusinessValue Model to decide 3.
What is Business Value? Ill know it when I see itJustice Potter
Stewart, concurring opinion in Jacobellis v. Ohio 378 U.S. 184
(1964), regardingpossible obscenity in The Lovers. 4. Determining
Business Value? CostsBenefitsBusiness Value 5. Determining the
inputs?Estimate Guess Business Value Common Practice 6. Why do we
want to know Business Value?To make decisions! 7. Use business
value model and guidingquestions to decide if a project is worth
it. 8. Purpose = What problem areyou trying to solve? 9.
Solutionwithout aproblem 10. Guiding QuestionsExactly whatproblem
will thissolve?Why are we bestsuited to pursuethis?For whom do
wesolve that problem? 11. Purpose Based Alignment Model12 12.
Purpose Based Alignment ModelDo we take this Innovate,on?
CreateAchieve andMinimize/ maintain parity,Eliminate Mimic,Simplify
13 13. Decision Filters Simple rules to guidedecision making
Disperse throughoutthe organizationUsed for (among others) Strategy
alignment Scoping Design approach 14. To be the low cost airline.-
Southwest Airlines 15. Will this help us be the low cost airline? -
Southwest Airlines 16. Purpose and Decision FiltersTo be thelow
costairline Will this help us be the low cost airline? 17. The
Billboard TestOrder newpages by2pm and getthem tomorrow! 18. Case
Study Purpose What problem is CookingUgly trying to solve? For whom
is Cooking Uglytrying to solve thisproblem? What are Cooking
Uglysdecision filters? Are the capabilities Bethidentified
parity,differentiating, partner, orwho cares? 19. Cooking Ugly
Customer Relationships Baking (production) Decorating Marketing
& Sales Purchasing Accounts receivable Inventory 20 20.
Considerations= What could impact value? 21. Guiding QuestionsWhat
alternativesare out there now?What factors arecritical to success?
22. Guiding QuestionsHow will we get this product to market? 23.
Uncertainty Market uncertainty Technology uncertainty Number of
customers Project duration Approach to change 24. Complexity Team
size Mission critical Team location Team maturity Domain
knowledgegaps Dependencies 25. Context Leadership Model 27 26.
Guiding QuestionsWhy Now? Do we have the right people to solve
this? 27. ConstraintsConstraintFixed Flexible AcceptScopeXTimeXCost
XQualityX 28. Case Study Considerations What alternatives
alreadyexist to solve CookingUglys problem? What factors are
criticalto this projects success? What is the risk profile? How do
you think theConstraints should beprioritized? 29. Costs &
Benefits= Whats the impact on business objectives? 30. Guiding
QuestionsHow much could we spend on this? 31. Gut Feel or Ball
ParkHow long, and how much? About a year and$2.5 million. 32.
Comparison to Past Projects$1,000$100K $10M ??$1M 33.
ExtrapolateAssumptions: 2 week iterations Overall backlog size: 600
points Planning Velocity: 30? 5 Person Team Avg Cost/person/wk:
$4,000 Estimate: $800,000 34. Guiding QuestionsHow big is the
opportunity? 35. Benefits A consequence of the action that
contributes to meeting business objectives. Can be identified in
financial or non financial terms, but should be measurableSoft
Benefits in a Hard Business Case: Legitimacy and Value for
Difficult BenefitsSolution Matrix Ltd By Marty J Schmidt 36. Guess
37. IncreaseRevenue 38. Reduce Costs 39. Guiding QuestionHow will
we measure success? 40. ObjectivesSpecificMeasureableAgreed
UponRealisticTimely 41. Financial Objectives? ROIReturn on
Investment NPVNet Present Value TCOTotal Cost of Ownership
IRRInternal Rate of Return 42. Financial Objectives = Cash
FlowCostsBenefitsYear 0Year 1 Year 2 Year 3 Year 4 43. Non
Financial ObjectivesBy Dec 2012 increaseBy Dec 2012 reduce
paperinventory turns from 5/year apps from 1,000/month toto
10/year500/month 44. Case Study Costs & Benefits Identify at
least two options to solve Cooking Uglys problem Identify the costs
incurred by each alternative Identify the benefits provided by each
alternative How would you measure success? 45. But Wait!How can I
possiblycalculate a numberfor my businessvalue with thatstuff?What
ever should Ido? 48 46. The Conversation RoomThanks to Nigel Dalton
47. Is It Worth It?Move forward? Trash it? 48. Case Study The
Conversation Is the project worth pursuing? If so, which approach
will you take and why? If not, why not? 49. In what order should we
deliver?Release 1 Release 2 Release 3 If time 50. Timing Can Be Key
Costs BenefitsPeriod 0 Period 1 Period 2 Period 3 Period 4 51. The
only constant is change Change in assumptions Change in constraints
Change inunderstanding Change in businessconditions Change in
objectives 52. How often do you reevaluate? Definitely after
eachrelease/implementation If you become aware ofany big changes
Ask at retrospectives:Is it still worth it? 53. Is It Still Worth
It?Move forward?Change it? Trash it? 54. Case Study The
Conversation ReduxBased on the newinformation Is the project still
worth it? Would you change your approach? If so, how? 55. If you
remember nothing else Business Value guidesdecisions Purpose
&Considerations impactBusiness Value Costs & Benefits
focuson objectives Its a conversation, not anumber 60 56. Guiding
Questions 1. Exactly what problem will this solve? 2. For whom do
we solve that problem? 3. How big is the opportunity? 4. How will
we measure success? 5. What alternatives are out there now? 6. Why
are we best suited to pursue this? 7. Why now? 8. How will we get
this product to market? 9. What factors are critical to
success?From Inspired: How to Create Products Customers Love by
Marty Cagan 57. Additional Guiding Questions1. Is the problem worth
solving?2. Do we have the right people to solve this?3. How will we
encourage adoption?4. How much could we spend on this? 58.
Questions?Kent
[email protected]@BeyondReqswww.beyondrequirements.comSlides
available
from:http://www.knowledgebridgepartners.com/presentations/isitworthit/
