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Evolving#NoProjects->Con5nuous
AllanKelly-@[email protected]
PlanningforValueHowmuch?When?
Agile on the BeachJuly 2017
relax
IsthisprojectrightforAgile?OrisWaterfallbe>erhere?
IsthisprojectrightforKanban?OrisScrumbe>erhere?
Whocaresaboutright?
Whichwillmakemoremoney?
Agilemakesmore$£€becauseitdeliverssomethingsooner
Today’sLesson#1
Ali>lebitSoonis
WorthmorethanalotdeliveredLater
Today’sLesson#2
KnowtheTime-ValueProfileofthethingyouarebuilding
Today’sLesson#3
DeadlinesareelasScbyvalue
Agilefolkgetitwrong!
• GivemoreopportuniSesforfeedback
• Tighterfeedbackloops• Allowforchangingrequirements
• Improvequality• Reducerisk
• Theyincreasevalue• Theymakemoremoney£€$
(O,andreducerisk,improvequality,etc.etc.)
Regulardeliveriesaregoodbecause…
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
Bigbangdelivery 12monthlydeliveries
Deliveredin1BigBangNPV=$215,725Value/Cost=21.57%
12monthlysmallbangsNPV=$243,359Value/Cost=24.34%
$27,0002.75%
$1million–1year
Valuedelivered
Costtobuildover
“Priceiswhatyoupay.Valueiswhatyouget.”
WarrenBuffet
Whichstoryfirst?
Value=$355,000Timetodelivery=
4weeks
Value=$1,060,000Timetodelivery=
6weeks
AsatoyretailerIwantanappthatallowskidstoselectfrommyspecialrangesothattheirparentscanbuy.
AsatoyretailerIwantanappthatallowskidstomakelistsoftoystheywantsotheirparentscanbuy.
Whichstoryfirst?
Value=$355,000Timetodelivery=
4weeks
Value=$1,060,000Timetodelivery=
6weeks
AsatoyretailerIwantanappthatallowskidstoselectfrommyspecialHALLOWEENrangesothattheirparentscanbuy.
AsatoyretailerIwantanappthatallowskidstomakelistsoftoystheywantSANTATOBRINGsotheirparentscanbuy.
Todayis1September
Time-ValueProfileHowdoesvaluechangeoverIme?
0
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400000
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1000000
1200000
Sep1 Sep15 Sep29 Oct13 Oct27 Nov10 Nov24 Dec8 Dec22 Jan5
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1200000
Sep1 Sep15 Sep29 Oct13 Oct27 Nov10 Nov24 Dec8 Dec22 Jan5
Valueover4months
Santaapptotalvalueover4months
DeliverydateTotalvaluefora
givendate
Totalvaluestartstofallaner15SeptemberTomaximizevaluedeliverby15Sep1Sep-13Oct
6weeks
0
200000
400000
600000
800000
1000000
1200000
Sep1 Sep15 Sep29 Oct13 Oct27 Nov10 Nov24 Dec8 Dec22 Jan5
Valueover4months
Santaapptotalvalueover4months
1Sep-13Oct6weeks UseByDate
BestBeforeDate
0
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100000
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Sep1 Sep15 Sep29 Oct13 Oct27 Nov10 Nov24 Dec8 Dec22 Jan5
ProductBvalueover4months
Halloweenappvalueover4months
1Sep-28Sep
4weeks
0
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Sep1 Sep15 Sep29 Oct13 Oct27 Nov10 Nov24 Dec8 Dec22 Jan5
ProductBvalueover4months
Halloweenappvalueover4months
1Sep-28Sep
4weeks
UseByDate
BestBeforeDate
Together
0
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400000
600000
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1000000
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Sep1 Sep15 Sep29 Oct13 Oct27 Nov10 Nov24 Dec8 Dec22 Jan5
Combinedvaluefromtwoapps
Santaapp Halloweenapp
Whatdoyouwanttodo?
A. DoHalloween&thenSantaB. DoSanta&thenHalloweenC. DoHalloween&forgetSantaD. DoSanta&forgetHalloweenE. ChangetheesSmatesF. DobothandprayG. Addmorepeople
Re-use?
• HowmuchofHalloweencanbereused?– HowmuchofSantacanbetakenfromHalloween?
• Howmuchextradoesreusablecodecost?– HowmuchSmedoesreusableaddtothework?
• Howmuchmoneyislostbydelay?• Howmuchmoneyisgainedfromearlydelivery?
ReusabilityincreasesRISK
Santade
pend
son
Halloween
Whatdoyouwanttodo?
A. DoHalloween&forgetSantaB. DoSanta&forgetHalloweenC. DoHalloween&thenSantaD. DoSanta&thenHalloweenE. ChangetheesSmatesF. DobothandprayG. AddmorepeopleH. Reuse
Santafirst,Halloweensecond
0
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1000000
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1 2 3 4 5 6 7 8 9 10
Combinedvaluefromtwoapps
Halloweenapp Santaapp
1Sep-13Oct6weeks
13Oct–9Nov
Santafirst
Appmakes$1,025,000$35,000lostbecauseitwasnotreadyby13October
Halloweenappmakes$0Total=$1,025,000
0
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400000
600000
800000
1000000
1200000
1400000
1600000
1 2 3 4 5 6 7 8 9 10
Combinedvaluefromtwoapps
Halloweenapp Santaapp1Sep-28Sep
1Sep-13Oct6weeks
28Sep-9Nov6weeks
13Oct–9Nov
Halloweenmakes$340,000$15,000lostbecausenotreadybefore29September
Santamakes$800,000$225,000lostbecauseitisnotreadyunSl10November
Halloweenfirst
Halloweencomesfirst
SantafirstTotal=$1,025,000
HalloweenfirstTotal=$1,140,000
$115,000more
OpportunityCostofDelay
• Extracostsincurredbecausedeliveryislate– e.g.temporarystaff,priorityshipping,penaltyfines
• Valueforegone:– LostrevenueopportuniSes– Notbeinginthemarket(lessSmeonsale)– NotbeingavailablebeforecriScaldate– NotbeinginthemarketbeforecompeStors
Timeismoney?
MoreSme->MorecostsMoreSme->Lessrevenue
(Usually)RevenueisinverselyproporSonalto
Smetodelivery
OpportunityCostofDelay
“6monthdelaycanbeworth33%oflifecycleprofits”
McKinsey(Reinertsen)1983
PrinciplesofProductDevelopmentReinertsen,2009
DeadlinesareanalogueDifferentdatesresultindifferent
valuesDeadlinesarenotbinary
(allornothing)
IneedthisandIneeditYESTERDAY
Yesterday…
0
200
400
600
800
1000
1200
Yesterday Today Tomorrow
BestBeforeDate
UseByDate
IneedthisandIneeditYESTERDAY
Odear,Idon’thaveaTARDIS(Smemachine)but
maybeIcangetsomethingforyoutomorrow?
Brilliant,IknewIcouldcountonyou
Ifallthevalueaccruedyesterdaythenitislost
IfvaluesSllexiststhenitmightbeworthdoing
Howdoyougettovalue?
• Askyourstakeholders• Dotheanalysis• EsSmate
ValuePoker
LikePlanningPoker• ValuepointsnotEffortpoints
10,000
8,000
Donow Dosoon Dolater
5,000Bestbefore+1mth
Bestbefore+6mths
Bestbefore+3mths
Time-ValueProfileisaninputtoplanning
0
50000
100000
150000
200000
250000
300000
350000
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Sep1 Sep15 Sep29 Oct13 Oct27 Nov10 Nov24 Dec8 Dec22 Jan5
ProductBvalueover4months
SoluSonsmustbebuiltto:a) Obtainasmuchofthevalueaspossibleb) WithinsomeSmeframec) Foracostwhichleavessomeprofit
Howmuchprofitismadeand
HowmuchvalueisextractedarenegoIable.
KnowtheTime-ValueprofileKnowyourtargetprofitKnowhowmuchyoucanspendWorkbacktodate&burnrate
Engineer,engineer
AllanKelly…Ø ConsulSngonsonwaredevelopment&strategyØ TrainingforAgile
Author– LiSleBookofRequirements&UserStories(2016)
h>p://www.leanpub.com/userstories– Xanpan:TeamCentricAgileSonwareDevelopment(2014)h>ps://leanpub.com/xanpan
– BusinessPaSernsforSoXwareDevelopers(2012)– ChangingSonwareDevelopment(2008)
More…
www.allankelly.net
LeanPubh>ps://leanpub.com/cdigital
1. Ali>lesoonisworthmorethanalotlater
2. KnowtheSme-valueprofile3. [email protected]>er:@allankellynet
½pricecod
e:
AOTB2017
48hours
