I have written before about my concern about the meaning of "Business Value". As a follow up I would like to suggest a new strategy for Product Owners that should lead to a more consistent and transparent approach to the prioritisation of User Stories based on Cost and Benefit.
First of all, an organisation should define "Business Value". There is no getting away from this. It should not vague or unclear. Agile development aside, an organisation that defines Business Value is likely to be a focussed organisation that gets the right job done at the right time! The team as a whole is more likely to have a positive feeling about proposed work if it demonstrably has Business Value and is not just the latest hot potato! My suggested starting point for a definition would be:
"A User Story has Business Value if it:
- Meets a minimum requirement to meet basic user expectation; or
- Makes the product more strategically competitive; or
- Makes the organisation more strategically competitive; or
- Is a popular feature that will generate revenue; or
- Is a feature that will reduce costs"
The list above is in order of importance. A product must first meet the basic expectations of the user and it must jump the minimum barriers to entry for a particular industry. Then it should seek to become strategically competitive or make the developing organisation more competitive. Finally the product should have the features required to generate revenue or improve the bottom line through reduced costs.
Every organisation will have its own definition of Business Value customised for its own market, people, political situation etc.
From here on in, the Product Owner should have enough information to relatively estimate the Business Value of a User Story. For example, adding a social networking feature to a Scuba Diving club web site could be strategically important. Interestingly, the Business Value of a User Story may change over time. For example, if all Scuba Diving club web sites have social networking features then it becomes a minimum requirement of the user rather than a strategic User Story that will make the product more competitive.
I would suggest that the Product Owner uses the same scale as the development team uses for Story Point (Cost) estimation to estimate the Business Value. This then allows the Product Owner to perform the trade-off between Business Value (Benefit) and Cost to determine the priority of the User Story.
I am not suggesting any maths (e.g. weighted averages etc) to do any of this automatically. I think that the gut feel of the Product owner based on the Business Value and Story Points should provide enough for the prioritisation to take place.
It is also worth noting that this approach does not add any additional effort to the Agile process. All it does is formalise the process.
posted @ Thursday, July 03, 2008 2:57 PM