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Agile Technique Brief: Project Value Models
Quick Summary
Learn to reach agreement on the project purpose, risks, constraints, assumptions, and more, and use that information to decide which projects and features to develop, prioritize them, and keep the priorities consistent with changing circumstances.
What this is
This technique brief describes an approach a team can use to make value-based, rational, objective decisions about what projects and features to do and in what priority to deliver them. It guides teams to:
- Establish a shared understanding of the project purpose
- Identify the various considerations that impact the project on a daily basis
- Determine the expected costs and benefits realized by a project
- Use this information to make informed decisions
Why it's useful
Informed decision-making is one of the key factors of success on projects, so it is very helpful for teams to understand the components of good decision-making. In the case of projects and features, these decisions should ideally be made on the basis of value, with the appropriate information available and at the appropriate time. The Project Value Model helps teams identify the information necessary to make value-based decisions, and organizes that information so it can be used to make decisions throughout the project as conditions change.
How to use it
- Gather the team together to establish a shared understanding of the project purpose.
- Establish a place to record project considerations. Use the collaboration process to create an initial list of risks, assumptions, and constraints. Add to this list whenever new items come up.
- Determine your organization’s preferred approach to cost-benefit analysis, and create a spreadsheet that allows your team to quickly revise cost and benefit information throughout the life of the project, in order to determine the value delivered. Include a way of tracking assumptions related to various cost and benefit items, for quick tracing of how various cost and benefit numbers were determined.
- Decide whether or not to pursue the project. Use the Purpose Alignment Model to identify how the project aligns with the organization’s strategy. Decide whether the project is worth pursuing based on its support of differentiating or parity activities. If there are any risks too large to overcome, or any constraints that cannot be met by the project, do not pursue the project.
- Compare cost-benefit information with the organizational expectations and decide whether the initial instance of the project provides the expected value.
- Determine the relative cost, benefit, and value of the requested features and produce an ordered features list.
The downloadable file includes guidelines for ongoing use of the project value model during the project.
Kent J. McDonald, partner and co-founder of Accelinnova, has more than a decade of experience guiding successful projects and designing business solutions in a variety of industries, including financial services, health insurance, performance marketing, human services, non-profit, and automotive. By addressing common questions about project leadership, Kent demonstrates how agile practices can be applied in organizations, focusing on his "Words To Lead By: Collaborate; Iterate; Serve The Team; Consider Context; Practice Excellence; Reflect And Adapt; Deliver Value."
Kent has a Bachelor of Science in Industrial Engineering from Iowa State University and an MBA from Kent State University. He is co-founder, and Treasurer of the Agile Project Leadership Network, is a founder of the Agile Iowa Group, and is on the planning committee for the Agile 2007 Conference. He welcomes questions about project leadership with a focus on value at kent@kentmcdonald.com.
Agile Technique Brief: Requirements Cards
Define feature requirements, also called user stories, concisely with this Scrum-based technique, using only the information absolutely necessary (and available) at project launch.
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