Quantifying Cost of Delay: Why is it the “one thing” to quantify? How do I do it?

Don Reinertsen says that if you only quantify one thing, quantify the Cost of Delay. As we’ve talked about before, quantifying Cost of Delay not only helps improve prioritisation, it also help with making trade-off decisions, creates a sense of urgency, and changes the focus of the conversation. Maybe this has got you interested in experimenting with it, but you’re not sure how to get started? If so, this workshop is specifically for you!

When people hear about Cost of Delay they sometimes doubt whether their organisation is ready for it. They say things like, “We don’t have the maturity for it”, or “We couldn’t do that because our stakeholders wouldn’t support it”. We’ve heard people say this too. And yet, in hindsight, people find it much easier than they thought! We will show you how to get started with using Cost of Delay, despite these doubts.

Building blocks

The first essential building block is to understand the value. To help structure the conversation we will use a simple economic framework to surface the assumptions and drive to the economic impacts. The second essential building block is to understand the urgency. For this, we will look at different urgency curves to help us understand how value is likely to decay over time. Combining these two gives us the Cost of Delay helping us to question and better understand what our gut tells us about value and urgency.

Practice makes perfect!

To get going, we will start by looking at some simplified scenarios that help you put what you’ve learned about Cost of Delay into practice. You’ll work at your own pace through some simple exercises that test different aspects of your understanding. To really embed it, once you’re done you’ll get a chance to help others around you – you become the teacher. We will then quickly reflect on what we’ve learned so far.

Then, we’re all going to work on quickly estimating the Cost of Delay for a real life example for a real company. You’ll do this in pairs making assumptions you need to get to a cost of delay for the feature in dollars per week. To help us learn about what the key assumptions were we will compare results across the group to help us understand what the value might be and the areas of greatest uncertainty.

To wrap up we’re going to ask you to do a mini-retrospective about what you’ve learned and what your puzzles are. If we have any time left, we’re happy to help you have a go with a feature or project you are working with.

 
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Outline/structure of the Session

Workshop

 

Learning Outcome

By the end of this session you should be able to go back to your organisation armed with a better understanding of what Cost of Delay is, why it’s useful and be confident enough to apply it.

  • Learn about an economic framework for estimating value
  • Learn about the most common urgency profiles we see
  • Do some exercises to work out the Cost of Delay for a set of scenarios
  • Get some practice with helping others to calculate the Cost of Delay
  • Learn about the assumptions we often need to make in order to calculate Cost of Delay.
  • Get to a Cost of Delay figure (in dollars per week) for a real situation, compare and contrast with others.
  • Be able to calculate the Cost of Delay for your own Project or Feature.

Target Audience

product owners, scrum masters, product managers, team leaders, business analysts, anyone who is involved in product development

schedule Submitted 6 months ago

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  • Jutta Eckstein
    By Jutta Eckstein  ~  5 months ago
    reply Reply

    Hi Ozlem and Joshua, you might be aware that full-day sessions take place at the beginning or at the end of the conference. So I just want to check if either one would be fine with you: March 6 or March 11/12?

    Thanks, Jutta

    • Özlem Yüce
      By Özlem Yüce  ~  5 months ago
      reply Reply

      Hi Jutta, 

      We'd prefer either 6th or 11th as we would need to travel back home latest on 12th to be at work on Monday. Ideally 6th is the best option for us. 

      Thanks

      • Jutta Eckstein
        By Jutta Eckstein  ~  5 months ago
        reply Reply

        Thank you Özlem, this helps!

  • Madhavi Ledalla
    By Madhavi Ledalla  ~  6 months ago
    reply Reply

    Hello Ozlem and Joshua, thank you for the submission to Agile India 2017. The duration of the workshop is marked as 480 min which is around 8 hours. Could you please clarify if you plan to run it as a pre-conference or a post-conference workshop for one full day. Thank you.

    • Özlem Yüce
      By Özlem Yüce  ~  6 months ago
      reply Reply

      Hi Madhavi, 

      We are planning to run it as a pre-conference session if that's ok. Thank you!

  • Deepti Jain
    By Deepti Jain  ~  6 months ago
    reply Reply

    Hi Ozlem and Joshua,

    Thank you for the submission to Agile India 2017!
    Your talk is absolutely amazing, people talk about Cost of Delay, but only in theory. It will be awesome to see something in action. This one must happen! If this is not a day long workshop, is there a way it can be timeboxed in 45 or 90 minutes?

    Thanks,
    Deepti

    • Özlem Yüce
      By Özlem Yüce  ~  6 months ago
      reply Reply

      Hi Deepti, 

      Thanks for your comments. I have submitted a separate talk on Cost of Delay for the conference. Please check that out here: https://confengine.com/agile-india-2017/proposal/3257/value-and-urgency-the-power-of-quantifying-cost-of-delay

      We also ran 90 minutes of this workshop previously at Lean-Kanban conferences as well as Agile 2014. The feedback was very positive but everyone told us that the time was not enough. Through feedback we got, we have learned that this is a topic that you can not rush when it comes to practice. We have done 1 day workshops previously and the feedback was much much better. If this one day workshop opens, the participants will definitely get a chance to practice using Cost of delay and will take away a brand new skill which would be fundamental for any organisation. I hope this is ok and we can somehow figure out a way to make this happen. We'd love to come to India! :D

      • Deepti Jain
        By Deepti Jain  ~  6 months ago
        reply Reply

        That's awesome kiss
        Now going to your mentioned link so that I can paste both my UP thumbs and only beating heart there <3

        Thanks,
        Deepti

        • Özlem Yüce
          By Özlem Yüce  ~  6 months ago
          reply Reply

          Thanks Deepti! Look forward to meeting you in person, hope we can make this happen ;)

          • Deepti Jain
            By Deepti Jain  ~  6 months ago
            reply Reply

            Me too. See you in the conference :)
            I hope you get enough registrations. Wish you luck for the workshop.


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