Most scrum teams create effort estimates, often using story points. As a product owner, you also want to have an estimate of the business value of each user story. Business value estimates help you create a more rational backlog and maximize the value the team delivers.

This workshop explores the art and science of estimating the business value of user stories. Participants will gain an understanding of the essence of business value,
and why it is more complex than just revenue or profit. Then we will then learn a surprisingly simple technique to estimate and quantify business value.

 

 
 

Outline/structure of the Session

Part 1: The Business Value Estimation Game

 Right from the start, participants will be immersed in a simulation in which they are all stakeholders in a project and need to provide business value estimates to a product owner. In this simulation, I teach an approach called "The Business Value Estimation" game, which leads stakeholders through a process of creating numeric estimates for business value, while at the same time establishing common understanding about the ways in which this particular product/project creates value.

First, a relative ordering of the stories is incrementally built up by the stakeholders. This ordering is based solely on the value of each story, higher value stories to the right and lower value stories to the left. Note that this is not a backlog yet, and it is not prioritization, it is strictly in order of value. Participants will discuss why each story is more or less valuable than the others in the ordering. Through these conversations, they uncover what they actually value in the product. One thing they are sure to discover is that value is a multidimensional concept. While things like potential revenue or profit are often important components of value, they are rarely the sole drivers of value.

Once the stakeholders have a workable ordering of stories from “this one adds the least value” to “this one adds the most value” they move on to assigning numeric estimates. This is done by creating a relative scale where the lowest value story is given a business value score of 1, and then all other stories are scored relative to that. Just like with effort estimation, the Fibonacci sequence is used.

The Business Value Estimation Game has proven itself very effective for stakeholder groups that have some common interest. Internal stakeholders, for example, will usually be successful in creating value estimates with this technique. For stakeholders who have little to no common ‘skin in the game’ a different technique is recommended.

 

Learning Outcome

After completing this workshop, participants will be able to...


  • Facilitate exercises with stakeholders to define and quantify “business value”
in their context

  • Articulate key components of business value beyond basic monetary terms

  • Apply a structured method for assigning numeric business value to user stories
  • Understand how backlog ordering and sprint planning are enhanced by the assignment of numeric business value to user stories

Target Audience

Product Owners, Stakeholders, Business Leadership

Requirements

The ideal room setup for this workshop is round tables with 8 or so participants seated around the table. The game will be played using index cards laid on the table. 

This workshop does not require Powerpoint or a projector.  A summary handout of the key points of the workshop and game mechanics will be provided for each participant.

Participants do not need to prepare before attending this session - and need only bring their enthusiasm and interest in exploring how to separate "business value" from "return on investment."

schedule Submitted 1 year ago

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