value realization of initiatives - putting your best project first!
TRANSCRIPT
Project (Initiative) Value Realization
How Not to Select your Next ‘Project’ Value & Speed vs Efficiency & Cost
Alex Kanaan
Play it SAFe!
About Me
Connect With Me
More about Me http://www.alexkanaan.com
Read My Blog http://www.alexkanaan.com/#latestnews
Contact Me http://www.alexkanaan.com/#contact
Follow my Tweets @AlexKanDu
Connect on LinkedIn https://www.linkedin.com/in/arkanaan
Project Value Realization● How do we currently prioritize projects?
➢No particular methodology or formula
➢We take into account money savings ➢Impact on revenue
➢Time factors
➢Meet & discuss trade-offs
➢Emphasis on cost and efficiency
Project Value Realization● Why move to a value based prioritization?
✓ We need to be able to decide not only when to start but more importantly when to stop & move on to something more valuable.
✓ We should be able to compare projects and opportunities according to their total benefits regardless of complexity and size
✓ This allows us to capture low hanging fruit first and get the best value soonest
✓ We need to change our prioritization focus from an efficiency and cost basis to a more effective speed and value basis
✓ This also gives us the added benefit of being faster in responding to changes
Scenario A: Which Project do we do First?
B
C
A
Project A
LOE 120 days
Value $$$$
Project B
LOE 120 days
Value $$$
Project C
LOE 120 days
Value $$
2006 Projects 2006 Projects 2006 Projects
B
C
A
Scenario B:Which Project do we do First?
Project A
LOE 120 days
Value $$$$
Project B
LOE 90 days
Value $$$$
Project C
LOE 60 days
Value $$$$
2006 Projects 2006 Projects 2006 Projects
Project Value Realization● How do we move to a value based prioritization?
❑ Understand & calculate total benefits & urgency and their impact on our projects
❑ Create a common unit to help compare projects with different values & urgencies
❑ Compare opportunities using the common unit and prioritize according to business value & decay over time
Project Value Realization Total Benefits*
User & Business Value Time Criticality Risk Reduction & Opportunity Enablement
Value to business, customer & partners
How user & business value decays over time
What else does this do for the business
• The business benefit it brings to the company
• Impact on Revenue • Cost Savings • Negative or positive
impacts • 1=low value, 13=high
value
• The need to be fast • Will partners, customers,
etc. wait for us or go elsewhere?
• How will customer satisfaction be affected if we wait?
• 1=low need, 13=high need
• The need to reduce the risk of current/future deliveries?
• Adds more value in information we receive?
• Potential for a new business opportunities?
• 1=low, 13=high
User & Business Value Time CriticalityRisk Reduction &
Opportunity Enablement
TOTAL BENEFIT = + +
Source – Scaled Agile Framework *Total benefit = cost of delay as described by Donald Reinersten
Project Value Realization● WSJF (Weighted Shortest Job First) is the common unit
that allows us to compare opportunities with different urgencies and business values
● Bringing it all together – the Math: ● GOAL: Convert all projects to a common unit so as to compare
their total value regardless of complexity and size ● In order to measure total benefit (Cost of Delay) – assign a
relative value to each item & sum up
● As quick estimate for duration and LOE use a relative Job Size ● Calculate WSJF = Total Value / Size ● The one with the highest WSJF is the one that brings us the
most value, soonest
Project Value Realization● It’s All Relative! ● Start with smallest item, give it a ‘1’
● There must be at least one ‘1’ in each column
● Scale for each parameter is 1,2,3,5,8,13,20;
● Higher => more value or larger size
ID Project User Business Value
Time Criticality
RR & OE COD Job Size WSJF
WAPP Phase I
1 2 3 1+2+3 COD / Job Size
Travel BookingDeals Platform
Project Value Realization● Keep in mind this is just a tool to help stimulate and
facilitate discussions regarding project selections
● It’s a flexible way to organize our projects
● Once sorted according to WSJF, further conversations may change the orders again, that’s OK!!
Project Value Realization● If you liked my presentation, connect with me from
the next page for more ☺
Connect With Me
More about Me http://www.alexkanaan.com
Read My Blog http://www.alexkanaan.com/#latestnews
Contact Me http://www.alexkanaan.com/#contact
Follow my Tweets @AlexKanDu
Connect on LinkedIn https://www.linkedin.com/in/arkanaan
Project Value Realization
Value & Speed vs Efficiency & Cost
About Me
About Me
Connect With Me
More about Me http://www.alexkanaan.com
Read My Blog http://www.alexkanaan.com/#latestnews
Contact Me http://www.alexkanaan.com/#contact
Follow my Tweets @AlexKanDu
Connect on LinkedIn https://www.linkedin.com/in/arkanaan
Project Value Realization● How do we currently prioritize projects?
➢No particular methodology or formula
➢We take into account money savings ➢Impact on revenue
➢Time factors
➢Meet & discuss trade-offs
➢Emphasis on cost and efficiency
Project Value Realization● Why move to a value based prioritization?
✓ We need to be able to decide not only when to start but more importantly when to stop & move on to something more valuable.
✓ We should be able to compare projects and opportunities according to their total benefits regardless of complexity and size
✓ This allows us to capture low hanging fruit first and get the best value soonest
✓ We need to change our prioritization focus from an efficiency and cost basis to a more effective speed and value basis
✓ This also gives us the added benefit of being faster in responding to changes
Scenario A: Which Project do we do First?
B
C
A
Project A
LOE 120 days
Value $$$$
Project B
LOE 120 days
Value $$$
Project C
LOE 120 days
Value $$
2006 Projects 2006 Projects 2006 Projects
B
C
A
Scenario B:Which Project do we do First?
Project A
LOE 120 days
Value $$$$
Project B
LOE 90 days
Value $$$$
Project C
LOE 60 days
Value $$$$
2006 Projects 2006 Projects 2006 Projects
Project Value Realization● How do we move to a value based prioritization?
❑ Understand & calculate total benefits & urgency and their impact on our projects
❑ Create a common unit to help compare projects with different values & urgencies
❑ Compare opportunities using the common unit and prioritize according to business value & decay over time
Project Value Realization Total Benefits*
User & Business Value Time Criticality Risk Reduction & Opportunity Enablement
Value to business, customer & partners
How user & business value decays over time
What else does this do for the business
• The business benefit it brings to the company
• Impact on Revenue • Cost Savings • Negative or positive
impacts • 1=low value, 13=high
value
• The need to be fast • Will partners, customers,
etc. wait for us or go elsewhere?
• How will customer satisfaction be affected if we wait?
• 1=low need, 13=high need
• The need to reduce the risk of current/future deliveries?
• Adds more value in information we receive?
• Potential for a new business opportunities?
• 1=low, 13=high
User & Business Value Time CriticalityRisk Reduction &
Opportunity Enablement
TOTAL BENEFIT = + +
Source – Scaled Agile Framework *Total benefit = cost of delay as described by Donald Reinersten
Project Value Realization● WSJF (Weighted Shortest Job First) is the common unit
that allows us to compare opportunities with different urgencies and business values
● Bringing it all together – the Math: ● GOAL: Convert all projects to a common unit so as to compare
their total value regardless of complexity and size ● In order to measure total benefit (Cost of Delay) – assign a
relative value to each item & sum up
● As quick estimate for duration and LOE use a relative Job Size ● Calculate WSJF = Total Value / Size ● The one with the highest WSJF is the one that brings us the
most value, soonest
Project Value Realization● It’s All Relative! ● Start with smallest item, give it a ‘1’
● There must be at least one ‘1’ in each column
● Scale for each parameter is 1,2,3,5,8,13,20;
● Higher => more value or larger size
ID Project User Business Value
Time Criticality
RR & OE COD Job Size WSJF
WAPP Phase I
1 2 3 1+2+3 COD / Job Size
Travel BookingDeals Platform
Project Value Realization● Keep in mind this is just a tool to help stimulate and
facilitate discussions regarding project selections
● It’s a flexible way to organize our projects
● Once sorted according to WSJF, further conversations may change the orders again, that’s OK!!
Project Value Realization● If you liked my presentation, connect with me from
the next page for more ☺
Connect With Me
More about Me http://www.alexkanaan.com
Read My Blog http://www.alexkanaan.com/#latestnews
Contact Me http://www.alexkanaan.com/#contact
Follow my Tweets @AlexKanDu
Connect on LinkedIn https://www.linkedin.com/in/arkanaan
Connect With Me
More about Me http://www.alexkanaan.com
Read My Blog http://www.alexkanaan.com/#latestnews
Contact Me http://www.alexkanaan.com/#contact
Follow my Tweets @AlexKanDu
Connect on LinkedIn https://www.linkedin.com/in/arkanaan
Project Value Realization● How do we currently prioritize projects?
➢No particular methodology or formula
➢We take into account money savings ➢Impact on revenue
➢Time factors
➢Meet & discuss trade-offs
➢Emphasis on cost and efficiency
Project Value Realization● Why move to a value based prioritization?
✓ We need to be able to decide not only when to start but more importantly when to stop & move on to something more valuable.
✓ We should be able to compare projects and opportunities according to their total benefits regardless of complexity and size
✓ This allows us to capture low hanging fruit first and get the best value soonest
✓ We need to change our prioritization focus from an efficiency and cost basis to a more effective speed and value basis
✓ This also gives us the added benefit of being faster in responding to changes
Scenario A: Which Project do we do First?
B
C
A
Project A
LOE 120 days
Value $$$$
Project B
LOE 120 days
Value $$$
Project C
LOE 120 days
Value $$
2006 Projects 2006 Projects 2006 Projects
B
C
A
Scenario B:Which Project do we do First?
Project A
LOE 120 days
Value $$$$
Project B
LOE 90 days
Value $$$$
Project C
LOE 60 days
Value $$$$
2006 Projects 2006 Projects 2006 Projects
Project Value Realization● How do we move to a value based prioritization?
❑ Understand & calculate total benefits & urgency and their impact on our projects
❑ Create a common unit to help compare projects with different values & urgencies
❑ Compare opportunities using the common unit and prioritize according to business value & decay over time
Project Value Realization Total Benefits*
User & Business Value Time Criticality Risk Reduction & Opportunity Enablement
Value to business, customer & partners
How user & business value decays over time
What else does this do for the business
• The business benefit it brings to the company
• Impact on Revenue • Cost Savings • Negative or positive
impacts • 1=low value, 13=high
value
• The need to be fast • Will partners, customers,
etc. wait for us or go elsewhere?
• How will customer satisfaction be affected if we wait?
• 1=low need, 13=high need
• The need to reduce the risk of current/future deliveries?
• Adds more value in information we receive?
• Potential for a new business opportunities?
• 1=low, 13=high
User & Business Value Time CriticalityRisk Reduction &
Opportunity Enablement
TOTAL BENEFIT = + +
Source – Scaled Agile Framework *Total benefit = cost of delay as described by Donald Reinersten
Project Value Realization● WSJF (Weighted Shortest Job First) is the common unit
that allows us to compare opportunities with different urgencies and business values
● Bringing it all together – the Math: ● GOAL: Convert all projects to a common unit so as to compare
their total value regardless of complexity and size ● In order to measure total benefit (Cost of Delay) – assign a
relative value to each item & sum up
● As quick estimate for duration and LOE use a relative Job Size ● Calculate WSJF = Total Value / Size ● The one with the highest WSJF is the one that brings us the
most value, soonest
Project Value Realization● It’s All Relative! ● Start with smallest item, give it a ‘1’
● There must be at least one ‘1’ in each column
● Scale for each parameter is 1,2,3,5,8,13,20;
● Higher => more value or larger size
ID Project User Business Value
Time Criticality
RR & OE COD Job Size WSJF
WAPP Phase I
1 2 3 1+2+3 COD / Job Size
Travel BookingDeals Platform
Project Value Realization● Keep in mind this is just a tool to help stimulate and
facilitate discussions regarding project selections
● It’s a flexible way to organize our projects
● Once sorted according to WSJF, further conversations may change the orders again, that’s OK!!
Project Value Realization● If you liked my presentation, connect with me from
the next page for more ☺
Connect With Me
More about Me http://www.alexkanaan.com
Read My Blog http://www.alexkanaan.com/#latestnews
Contact Me http://www.alexkanaan.com/#contact
Follow my Tweets @AlexKanDu
Connect on LinkedIn https://www.linkedin.com/in/arkanaan