Wednesday 13 February 2008

Transparancy of Business Value

Dear Junior
The story-format from Behaviour Driven Development is wonderful in many ways. I have not yet found another format that is even as close to the semantic density of
As <role>
I want <feature>
So that <benefit>.
However, I would like to dive into one particular aspect.
If you have three things collected it is often interesting to focus on two of them and pay less attention to the third. During my student years there was a joke that it was easy to be well-dressed, social, and sober - but you had to pick two out of three.
In this case we have the role, feature, and the benefit. Please play the game of focusing out the role or the feature. I want to dive into what happens if you fade out the feature itself and focus on the role and the benefit. Benefits can be measured in millions of ways, but let us make it easy for us and convert it to monetary business value. If you need help in doing that, please contact closest economist, they have a broad selection of models for company value calculations to pick from.
"As <role> (...) so that <business value>": If we look at the last part, it is a value experienced by someone - and that can be converted to money. If we look at the first part, it tells us which group will benefit. Multiply the size of the group with the value per person, and you have the potential strategic business value of the story.
As an example: last fall I discussed this during a mountain walk with Bryan Basham who work for StillSecure on the Cobia system for configuration of network nodes (e g routers). One of their stories read roughly "As a network admin I want to apply a setting to a group of network nodes, so that I do not need to configure each of them manually". So, why should a customer pay for this functionality? Well, manual repetition of the same configuration converts really easy to cost of labour hours. So, the benefit of having each network admin saving a few hours each month transfer through multiplication to a monthly reduction of costs, which through not-to-advanced economical calculations can be transferred to a now-value. Voila!
The benefit of actually putting a figure on the value of the story is that you can get clearer transparency of the business value through the organisation. When the product owner makes priorities she can have a look at the estimated value as well as the estimated cost (number of story points we will spend on implementing the story). Another way to use it could be to clear out communication with external stakeholders. E g, a seller might have gotten his will through by being the loudest shouter. However, when he is forced to set a figure of the value, he can also be held accountable if he gets the feature, but fail to deliver extra sales. It can also be fruitful for the CTO/CIO to sum up the value of all stories delivered by development in their quarterly report to the CEO. In that way it might become clear that IT development is not just "all costs"; it actually delivers business value, or at least potential value for someone else to realise into actual cash.
Unfortunately, many organisations are not brave enough to see this so clear. For some reason they prefer to see development as a cost which is funded through a limited budget, and which often do not deliver what they should.