Friday, March 2, 2007

What is Business Value? Part 1

I have noticed a bunch of projects lately (mine and those of other people) where the business value is not so clear.

As Yogi Berra said, "If you don't know where you're going, you might not get there."

But what is Business Value? I mean, what is it really?

First, I like the definition of Lean. Value is defined by the end customer. Value becomes meaningful when talking about a specific product that meets a customer’s needs at a specific price at a specific time. (See here:

End customer. So, all the rest of us are just making guesses at what the customer wants. Remarkably, sometimes we are right. And the next sentence is also important. There has to be a context. In fact, I believe the context is much larger and harder to define than this. We buy things based on a conscious or unconscious comparison to all the other things we might buy or do or not do.

For example, when I go to Starbucks for a decaf coffee (don't ask; no, I hardly ever buy a latte), I am implicitly comparing to all the other cool things I could do, places with social scenes, drinks I might have, other bars or coffee houses I have gone to lately.

My main point is business value is complex. And it changes. The customers are changing and my understanding of the customers is hopefully improving along the way. Indeed, I should organize things so that I can experiment with new products, to find out if my hypotheses about the customers were correct. (Yes, Virginia, even end customers can't always explain to you what they really want. Accurately.)

So, with agile project management, we are learning about what the project is and how to do the project and who the team really is. At that same time, the business lead is learning "what really is the business value here".

"As you from crimes would pardon’d be,
Let your indulgence set me free"
- Shakespeare, The Tempest

The business lead must accept the Team is learning, and they must accept that the business lead is learning.

Now, the fact that we are learning does not mean we start with totally sloppy thinking or no thinking. We need to make a relatively quick first estimate (hey, it might even be accurate enough). And then test that. I would not suggest starting a project just on the hunch of a "business lead" who has no track record of successful hunches.

A couple of suggestions:
  • Demand to understand the business value of your project (be reasonable in how you put this)
  • Talk about it (anyone might have a contribution)
  • Talk about it some more; see if everyone is motivated by the business value as articulated so far
  • Develop an approach together to getting more confirmation that the business value of your project is really there (Hint: incremental releases might be part of that approach.)
We have some more things to say about business value, and then we will talk about the relationship between a SW project and a process.

+ Joe Little

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