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Measuring Business Value

March 17, 2010

For stakeholders and managers, the single most appealing aspect about project management with Scrum is almost always the fact that all development efforts are driven by Business Value. That means that work is prioritized based on the amount of value it will generate for the organization. In an article called “Estimating Business Value,” InfoQ’s Chris Sims considers how teams can determine which user stories represent the highest Business Value. What ensues is a comprehensive discussion of how organizations do just that. Perhaps most interesting is Pascal Van Cauwenberghe’s assertion that Product Owners should not select user stories they believe to contain the most business value, but should first consider what generates business value and then work backwards to write the user story accordingly. He offers a step-by-step process to guide Product Owners through that process for the first time:

  • “We first decide what values (or benefits) we want to achieve before launching a project or product
  • “Then we find and improve the business processes that deliver that value
  • “Then we find and improve the supporting business processes that make the value-delivering processes possible
  • “When the team needs user stories, we take the highest value processes and break them down into user stories at the right level of granularity for the team’s needs. The team pulls the stories, so we only generate a minimal set of user stories.”

The article continues with additional approaches for teams to weigh, including suggestions from Brandon Carlson, Mike Cohn, James Shore, and Kelly Waters. It’s a valuable post for providing so many perspectives to this one problem. To their advice, I’d also recommend consulting Michael James’ whitepaper “An Agile Approach to ‘Metrics’: Applied Macromeasurements to Ensure On-time Delivery” and Dr. Dan Rawsthorne’s whitepaper “Monitoring Scrum Projects with AgileEVM and Earned Business Value (EBV) Metrics.”

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One Response to “Measuring Business Value”

  1. Casey Armstrong on August 3rd, 2011 11:36 pm

    I like the ideas, but recommend checking out some of Steve Blank’s principals on what’s important early with project management, and obviously, as this blog is focused on, staying agile.

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