the economics of product development v0.8
Post on 16-Apr-2017
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• EnterpriseAgileCoachandTrainer
• The5thLeSSTrainergloballyand1stintheUK
• FormerHeadofScaledAgileatMcKinsey&Co.
• Formerdeveloper,ScrumMaster&ProjectManager
• TrainedTeamandExecutiveCoach
• YearsofexperienceinscalingScruminlargeproduct
groups
KarimHarbott
ALittleAboutMe
karim@guidingagile.com@KarimHarbott
www.guidingagile.com
Queues“InProductdevelopment,ourgreatestwasteisnotunproductive
engineers,butworkitemssittingidleinpricesqueues.”
DonaldG.Reinertsen
CapacityUtilisation
Que
ueingTime
x2
x10
M/M/1/∞queue
50% 90% 100%0%
0
5
10
15
20x20
Capacityutilisation=%ofcycletimewaitinginaqueue!!
CapacityUtilisation&Queuesize
Prob
abilityofo
ccurrence
£1
100% Spend = £1
£2
10%
Saving=£0.90
£3
Saving=£0.99
1%
67%lessinvestmentforthesamepayoff
Cumulativeinvestment
TheValueofFastFeedback
Project funding
Large projects
‘Phased’ projects
Detailed project
planningManual
regression testing
Complex architecture
Reviews / sign-offs Manual
deployment processes
SomeInhibiterstoSmallBatches
Prioritisation“Thekeyisnottoprioritisewhat'sonyourschedule,buttoschedule
yourpriorities”
StephenCovey
Project Duration (weeks)
Cost of Delay (£k)
Weight = CoD / duration
1 1 10 10
2 3 3 1
3 10 1 0.1
Weightedshortestjobfirst
Weightedshortestjoblast
CostofD
elay
CostofD
elay
Delaycost£
1
2
£1k 3£3k
£3k
Delaycost=£7k
3
£100k
£30k 2
£30k 1 Delaycost=£160k
WeightedShortestJobFirst(WSJF)
1. Measurecostofdelay,evenifitisnotperfect.2. Payattentiontoqueuesandtheircost.3. Preventqueuesfrombuildingupbybuildingin
excesscapacity.4. Drivedowntransactioncoststoenablesmall
batches.5. Limityourwork-in-progress(WiP).6. Prioritiseusingweightedshortestjobfirst(WSJF).
Summary
“Whenhigh-qualitydecentralisedeconomicinformationisabsent,itistoooftenreplacedbythemind-numbingbureaucracyof
centralisedcontrol“
DonaldG.Reinertsen
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