prioritizing portfolio backlog to maximize value steve mayner agile asia 2016

Prioritizing Portfolio Backlogs

to Maximize

ValueUsing Multi-Criteria Decision Analysis

Stephen MaynerSenior SAFe® Program Consultant

Scaled Agile, Inc.

SAFe® Senior Program ConsultantScaled Agile, Inc.

steve.mayner@scaledagile.com@stevemaynerstevemayner

#aafhyd #SAFe #WhereIsART

OUR HIGHEST PRIORITY IS TO SATISFY THE CUSTOMER THROUGH EARLY AND CONTINUOUS DELIVERY

OF VALUABLE SOFTWARE.Agile Manifesto, Twelve Principles

AGILEMANIFESTO.ORG/PRINCIPLES

“

”(The Lodge at Snowbird Ski Resort, where Agile was born…)

what is Things only have the value that we give them.

Molière 1622-1673

Stock priceMarket shareCapitalizationROIEPS

shareholder

EthicsFair Trade

EnvironmentVolunteerismLocal Growth

Human Rights

social

Filling unmet…jobs…pains…gains

Cost effectiveDifferentiated

customer

SafetyPay & Benefits

OpportunityLearning

Networking

employee

CollaborationInnovationVolumeIntegrationAnalytics

supplier/partner

Business ValueShareholder

Value

SocialValue

CustomerValue

Employee Value Supplier/

Partner Value

Learning

Org. Agility

Innovation

Internal Systems

How do leaders know which indicators of business value to follow in order to achieve the desired

business outcomes?

Schwartz, M. (2016). The art of business value. Portland, OR: IT Revolution

They don’t.

Schwartz, M. (2016). The art of business value. Portland, OR: IT Revolution

They have a hypothesis.

Schwartz, M. (2016). The art of business value. Portland, OR: IT Revolution

scaledagileframework.com

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Billing

Trigger: Customerorder

Shipping/TrackingCRM

Operational Value Stream (Example: Order processing)

People who operate the systems

Systems:

Value: Order delivered

#1-Take an economic view#2-Apply systems thinking

#3-Assume variability; preserve options#4-Build incrementally with fast, integrated learning cycles

#5-Base milestones on objective evaluation of working systems#6-Visualize and limit WIP, reduce batch sizes, and manage queue lengths

#7-Apply cadence, synchronize with cross-domain planning#8-Unlock the intrinsic motivation of knowledge workers

#9-Decentralize decision-making

If you only quantify one thing, quantify the —Donald G. Reinertsen, Principles of Product Development Flow

weighted-shortest job (WSJF)

Reinertsen, D. (2012). The principles of product development flow: Second generation lean product development. Redondo Beach, CA: Celeritas Publishing

+ time criticality + risk reduction-

Job size

Reinertsen, D. (2012). The principles of product development flow: Second generation lean product development. Redondo Beach, CA: Celeritas Publishing

Quantifying thebusiness value

Multi-Criteria Decision Analysis

(MCDA)…a general framework for

supporting complex decision-making situations with multiple and

often conflicting objectives that stakeholders groups and/or

decision-makers value differently

Belton, V., & Stewart, T. (2002). Multiple criteria decision analysis: An integrated approach. Springer.

Multiple stakeholdersStructured decision alternatives

Facilitate decision dialogueQuantify categorical criteriaUnify plural value dimensions

Step #1

Program portfolio management team determines

describing business value

Launch NextGen ProductReduce operating costs

Ensure complianceDecrease employee turnover

Increase customer satisfactionReduce carbon footprint

Step #2

Program portfolio management team determines

Quantifying business value

5 – directly enables product to go to market4 – direct precursor to releasing product to market3 – strongly improves ability to launch2 – moderately improves ability to launch1 – nominally improves ability to launch0 – no relationship to launching the nextgen product

Scoring definition example

5 – required to comply with regulations, laws, directives0 – not required for compliance

Scoring definition example

For this decision analysis technique, an ordinal scale (Likert) is more appropriate than interval scale (Fibonacci)

Step #3

Program portfolio management team determines

Quantifying business value

launch nextgen productreduce operating costsensure compliancedecrease employee turnoverincrease customer satisfactionreduce carbon footprint

weighting example

Step #4

Program portfolio management team builds

Putting it all together

Criteria Weight Scoring Definitions RawScore

WeightedScore

LaunchNextGenProduct 30% 5– directlyenablesproducttogotomarket4– directprecursortoreleasingproducttomarket3– stronglyimprovesabilitytolaunch2–moderately improvesabilitytolaunch1– nominallyimprovesability tolaunch0– norelationshiptolaunchingthenextgenproduct

3 9

CostSavings 20% 5– Immediate AND>=$100M4 –Within1yearAND>=$25M3 –Within2yearsAND>=$10M2–Within3yearsAND>=$1M1–Within5yearsOR>=$100K0– Nocostsavings

4 8

Compliance 20% 5– Requiredtocomplywithregulations, statutes,directives0– Notrequiredforcompliance

5 10

Decreaseemployeeturnover

10% 5– Directlyreducesturnover>=25%4 –Directlyreducesturnoverbetween 18%to24%3 –Directlyreducesturnoverbetween 10%to17%2– Directlyreducesturnoverbetween 1%to10%1– Indirectly reducesturnover0– Noconnectiontoemployeeturnover

2 2

Increasecustomersatisfaction

10% 5– Providesatop5mostrequestedproductcapability4 – Providesatop50mostrequestedproductcapability3 – Directlyresolvesa top5mostcommonlyreportedissue2– Directlyresolvesa top50mostcommonlyreportedissue1– Providesunrequestedproduct/serviceenhancement0– Noconnectiontocustomersatisfaction

4 4

Total ValuePoints 33Apply to epics, enablers, capabilities, features

Use modified planning poker with

numbered cards 0 – 5 to achieve

consensus

+ time criticality + risk

Job size

+ time criticality + risk reduction

Job size

Story points

NextG

enProduct

Costsavin

gsCompliance

Emplo

yeeturnover

Custo

mersatisfaction

Carbonfootprint

TotalValu

ePoints

StoryP

oints

WSJF

Weighting 3 4 5 2 1 4Epic6 5 5 4 4 2 4 81 1800 0.045Epic5 2 1 2 2 1 1 29 750 0.039Epic1 3 3 1 2 2 2 40 1500 0.027Epic2 2 3 5 4 3 3 66 3000 0.022Epic4 0 1 3 1 1 4 38 2000 0.019Epic3 0 1 5 2 2 4 51 4500 0.011

0

10

20

30

40

50

60

70

80

90

100

1 2 3 4 5 6 7 8 9 10 11 12

Program Increments

Value Burnup Chart

Value Points

ConsistentFair

DefensibleUnderstandable

Measurable

46

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