Updated: May 26, 2021
Any product, business or organization creates a product OR resource that has some “value”. This is the “value” that make lives easy, that produces better products, that establishes the organizations trust, vision and drive business goals.
So, how do you establish value?
A business value gives “that value” to end users and businesses to develop a “feature” withstanding the changing market needs, demands, competition and foresight. Given the focal point and decision-making stance, a business value (here after called as “BV”) became a core principle in any methodology a project/ program/ enterprise adopts or implement.
In software industry, a project is not judged by cost, number of resources nor a single intellectual SME. It’s the “BV” that is delivered in the fastest manner, iteratively and incrementally. Few Agile manifesto core team members like: Ken Schwaber, Kent Beck, Highsmith unanimously emphasize on “business value” as the core Agile principle in terms of driving the vision and goals.
And who is that person to maximize the BV?... Well, the Scrum Guide says, it is the “product owner” that steers the BV, measures ROI, drive the features in meeting the BV. Now, this realization about BV drives us towards establishing the value.
As per Scrum Guide, the Product owner is the face of the business (stakeholders, end users) who wear the hat in driving BV by understanding the strategic goals. This leads to the start of defining value, well, the meaning of value differs from every other person, project, product, organization etc. And value applies to both customer or business! Yes, the “business value” and “customer value” can be interchanged given the criteria of vision and goal defined by the stakeholder(s).
A Product Owner’s will establish and maximize the business value through strategic skills of product roadmap, product discovery, vision and tactical skills of preparing the product backlog, prioritizing, ensuring user stories are in place and well written. Meaningful techniques are employed to customize and deliver the business outcomes.
An organization will establish a BV considering these parameters in order to stay competitive and deliver value:
Stakeholders: what end users needs are and will buy.
Risk/ change management/ capability building: embracing marketplace and IoT.
Process/ service/ product: what the team is considering as excitement.
Cost/ market value.
Some techniques (clubbed) that maximize, measure, assess Business value at a project level, program level and enterprise levels:
Epic- feature-user story-tasks-estimations-Requirement Traceability matrix
Product backlog- slicing-Prioritization-validation
Empathy- personas-Stakeholder management
Scope-Budget (Cost analysis)- Requirements (Business, Solution, Transition)-Methodologies
Cost of delay-Return on investment-cash flow analysis-net present value
Process reengineering-SWOT-GAP-Decision Analysis
As per PMBOK 6th edition, “the business value is the net quantifiable benefit derived from a business endeavor. The benefit may be tangible, intangible, or both”. The BV can be assessed through non-functional requirements:
The BV can be assessed through tangible requirements:
The BV can be assessed through intangible requirements:
Trademarks, patents, IP
Conclusion: Take any use case from your life/ working experience/ business decisions. When you start decoding the value and ROI, you involuntarily end up assessing the business value, time, estimates, market place stance, scenarios and best practices etc. etc.
More about the Business value in another blog.