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Evolving #NoProjects -> #ProjectLess
Allan Kelly - @allankellynet
allan@allankelly.net
Planning for Value
How much? When?
...
Allan Kelly…
 Consulting on software development & strategy
 Training for Agile
Author
– Little Book of Requirements & U...
Is this project right for Agile?
Or is Waterfall better here?
Is this project right for Kanban?
Or is Scrum better here?
Who cares about
right?
Which will make more
money?
Agile makes more $ £ € because it
delivers something sooner
Value delivered
______ over ______
Cost to build
“Price is what you pay.
Value is what you get.”
Warren Buffet
20.00%
20.50%
21.00%
21.50%
22.00%
22.50%
23.00%
23.50%
24.00%
24.50%
25.00%
$ 0
$ 50,000
$ 100,000
$ 150,000
$ 200,000
$ ...
Agile folk get it wrong!
• Give more
opportunities for
feedback
• Tighter feedback loops
• Allow for changing
requirements...
Which story first?
Value = $355,000
Time to delivery =
4 weeks
Value = $1,060,000
Time to delivery =
6 weeks
As a toy reta...
Which story first?
Value = $355,000
Time to delivery =
4 weeks
Value = $1,060,000
Time to delivery =
6 weeks
As a toy reta...
Time-Value Profile
How does value change over time?
0
200000
400000
600000
800000
1000000
1200000
Sep 1 Sep 15 Sep 29 Oct ...
0
200000
400000
600000
800000
1000000
1200000
Sep 1 Sep 15 Sep 29 Oct 13 Oct 27 Nov 10 Nov 24 Dec 8 Dec 22 Jan 5
Value ove...
0
200000
400000
600000
800000
1000000
1200000
Sep 1 Sep 15 Sep 29 Oct 13 Oct 27 Nov 10 Nov 24 Dec 8 Dec 22 Jan 5
Value ove...
0
50000
100000
150000
200000
250000
300000
350000
400000
Sep 1 Sep 15 Sep 29 Oct 13 Oct 27 Nov 10 Nov 24 Dec 8 Dec 22 Jan ...
0
50000
100000
150000
200000
250000
300000
350000
400000
Sep 1 Sep 15 Sep 29 Oct 13 Oct 27 Nov 10 Nov 24 Dec 8 Dec 22 Jan ...
Together
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
Sep 1 Sep 15 Sep 29 Oct 13 Oct 27 Nov 10 Nov 24 Dec...
Together
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1 2 3 4 5 6 7 8 9 10
Combined value from two apps
H...
What do you want to do?
A. Do Halloween & then Santa
B. Do Santa & then Halloween
C. Do Halloween & forget Santa
D. Do San...
Re-use?
• How much of Halloween can be reused?
– How much of Santa can be taken from Halloween?
• How much extra does reus...
What do you want to do?
A. Do Halloween & forget Santa
B. Do Santa & forget Halloween
C. Do Halloween & then Santa
D. Do S...
Santa first, Halloween second
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1 2 3 4 5 6 7 8 9 10
Combined ...
Santa first
App makes $1,025,000
$35,000 lost because it was not ready by
13 October
Halloween app makes $0
Total = $1,025...
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1 2 3 4 5 6 7 8 9 10
Combined value from two apps
Halloween ...
Halloween app makes $340,000
$15,000 lost because not ready
before 29 September
Santa makes $800,000
$225,000 lost because...
Halloween comes first
Santa first
Total = $1,025,000
Halloween first
Total = $1,140,000
$115,000 more
Opportunity Cost of Delay
• Extra costs incurred because delivery is late
– e.g. temporary staff, priority shipping, penal...
Time is money?
More time -> More costs
More time -> Less revenue
(Usually) Revenue is inversely proportional to
time to de...
Opportunity Cost of Delay
“6 month delay can be worth 33% of life
cycle profits”
McKinsey (Reinertsen) 1983
Principles of ...
Deadlines are analogue
Different dates result in different
values
Deadlines are not binary
(all or nothing)
I need this and I need it
YESTERDAY
Yesterday…
0
200
400
600
800
1000
1200
Yesterday Today Tomorrow
Best Before Date
Use By Date
I need this and I need it
YESTERDAY
O dear, I don’t have a
TARDIS (time machine) but
maybe I can get something for you
tom...
Today’s Lesson #1
A little bit Soon
is
Worth more than a lot
delivered Later
Today’s Lesson #2
Know the Time-Value Profile
of the thing you are building
Today’s Lesson #3
Deadlines are elastic by
value
How do you get to value?
• Ask your stakeholders
• Do the analysis
• Estimate
Value Poker
Like Planning Poker
• Value points not Effort points
Time-Value Profile is an
input to planning
0
50000
100000
150000
200000
250000
300000
350000
400000
Sep 1 Sep 15 Sep 29 Oc...
Solutions must be built to:
a) Obtain as much of the value as possible
b) Within some time frame
c) For a cost which leave...
Know the Time-Value profile
Know your target profit
Know how much you can spend
Work back to date & burn rate
Engineer, en...
Feedback
Option A Option B
#NoProjects
LeanPub
https://leanpub.com/noprojects
allan@allankelly.net
Twitter: @allankellynet
Planning for Value: how much? when?
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Planning for Value: how much? when?

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How to increase the value delivered and meet deadlines.

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Planning for Value: how much? when?

  1. 1. Evolving #NoProjects -> #ProjectLess Allan Kelly - @allankellynet allan@allankelly.net Planning for Value How much? When? Linz March 2017
  2. 2. Allan Kelly…  Consulting on software development & strategy  Training for Agile Author – Little Book of Requirements & User Stories (2016) http://www.leanpub.com/userstories – Xanpan: Team Centric Agile Software Development (2014) https://leanpub.com/xanpan – Business Patterns for Software Developers (2012) – Changing Software Development: Learning to be Agile (2008)
  3. 3. Is this project right for Agile? Or is Waterfall better here? Is this project right for Kanban? Or is Scrum better here?
  4. 4. Who cares about right? Which will make more money?
  5. 5. Agile makes more $ £ € because it delivers something sooner
  6. 6. Value delivered ______ over ______ Cost to build “Price is what you pay. Value is what you get.” Warren Buffet
  7. 7. 20.00% 20.50% 21.00% 21.50% 22.00% 22.50% 23.00% 23.50% 24.00% 24.50% 25.00% $ 0 $ 50,000 $ 100,000 $ 150,000 $ 200,000 $ 250,000 $ 300,000 Big bang delivery 12 monthly deliveries Delivered in 1 Big Bang NPV = $ 215,725 Value/Cost = 21.57% 12 monthly small bangs NPV = $ 243,359 Value/Cost = 24.34% $27,000 2.75% $1 million – 1 year
  8. 8. Agile folk get it wrong! • Give more opportunities for feedback • Tighter feedback loops • Allow for changing requirements • Improve quality • Reduce risk • They increase value • They make more money £€$ (O, and reduce risk, improve quality, etc. etc.) Regular deliveries are good because…
  9. 9. Which story first? Value = $355,000 Time to delivery = 4 weeks Value = $1,060,000 Time to delivery = 6 weeks As a toy retailer I want an app that allows kids to select from my special range so that their parents can buy. As a toy retailer I want an app that allows kids to make lists of toys they want so their parents can buy.
  10. 10. Which story first? Value = $355,000 Time to delivery = 4 weeks Value = $1,060,000 Time to delivery = 6 weeks As a toy retailer I want an app that allows kids to select from my special HALLOWEEN range so that their parents can buy. As a toy retailer I want an app that allows kids to make lists of toys they want SANTA TO BRING so their parents can buy. Today is 1 September
  11. 11. Time-Value Profile How does value change over time? 0 200000 400000 600000 800000 1000000 1200000 Sep 1 Sep 15 Sep 29 Oct 13 Oct 27 Nov 10 Nov 24 Dec 8 Dec 22 Jan 5
  12. 12. 0 200000 400000 600000 800000 1000000 1200000 Sep 1 Sep 15 Sep 29 Oct 13 Oct 27 Nov 10 Nov 24 Dec 8 Dec 22 Jan 5 Value over 4 months Santa app total value over 4 months Delivery date Total value for a given date Total value starts to fall after 15 September To maximize value deliver by 15 Sep1 Sep-13 Oct 6 weeks
  13. 13. 0 200000 400000 600000 800000 1000000 1200000 Sep 1 Sep 15 Sep 29 Oct 13 Oct 27 Nov 10 Nov 24 Dec 8 Dec 22 Jan 5 Value over 4 months Santa app total value over 4 months 1 Sep-13 Oct 6 weeks Use By Date Best Before Date
  14. 14. 0 50000 100000 150000 200000 250000 300000 350000 400000 Sep 1 Sep 15 Sep 29 Oct 13 Oct 27 Nov 10 Nov 24 Dec 8 Dec 22 Jan 5 Product B value over 4 months Halloween app value over 4 months 1 Sep - 28 Sep 4 weeks
  15. 15. 0 50000 100000 150000 200000 250000 300000 350000 400000 Sep 1 Sep 15 Sep 29 Oct 13 Oct 27 Nov 10 Nov 24 Dec 8 Dec 22 Jan 5 Product B value over 4 months Halloween app value over 4 months 1 Sep - 28 Sep 4 weeks Use By Date Best Before Date
  16. 16. Together 0 200000 400000 600000 800000 1000000 1200000 1400000 1600000 Sep 1 Sep 15 Sep 29 Oct 13 Oct 27 Nov 10 Nov 24 Dec 8 Dec 22 Jan 5 Combined value from two apps Santa app Halloween app
  17. 17. Together 0 200000 400000 600000 800000 1000000 1200000 1400000 1600000 1 2 3 4 5 6 7 8 9 10 Combined value from two apps Halloween app Santa app
  18. 18. What do you want to do? A. Do Halloween & then Santa B. Do Santa & then Halloween C. Do Halloween & forget Santa D. Do Santa & forget Halloween E. Change the estimates F. Do both and pray G. Add more people
  19. 19. Re-use? • How much of Halloween can be reused? – How much of Santa can be taken from Halloween? • How much extra does reusable code cost? – How much time does reusable add to the work? • How much money is lost by delay? • How much money is gained from early delivery? Building for reuse increases RISK to both What about Intellectual Property?
  20. 20. What do you want to do? A. Do Halloween & forget Santa B. Do Santa & forget Halloween C. Do Halloween & then Santa D. Do Santa & then Halloween E. Change the estimates F. Do both and pray G. Add more people H. Reuse
  21. 21. Santa first, Halloween second 0 200000 400000 600000 800000 1000000 1200000 1400000 1600000 1 2 3 4 5 6 7 8 9 10 Combined value from two apps Halloween app Santa app 1 Sep-13 Oct 6 weeks 13 Oct – 9 Nov
  22. 22. Santa first App makes $1,025,000 $35,000 lost because it was not ready by 13 October Halloween app makes $0 Total = $1,025,000
  23. 23. 0 200000 400000 600000 800000 1000000 1200000 1400000 1600000 1 2 3 4 5 6 7 8 9 10 Combined value from two apps Halloween app Santa app 1 Sep - 28 Sep 1 Sep-13 Oct 6 weeks 28 Sep-9 Nov 6 weeks 13 Oct – 9 Nov
  24. 24. Halloween app makes $340,000 $15,000 lost because not ready before 29 September Santa makes $800,000 $225,000 lost because it is not ready until 10 November Halloween first
  25. 25. Halloween comes first Santa first Total = $1,025,000 Halloween first Total = $1,140,000 $115,000 more
  26. 26. Opportunity Cost of Delay • Extra costs incurred because delivery is late – e.g. temporary staff, priority shipping, penalty fines • Value foregone: – Lost revenue opportunities – Not being in the market (less time on sale) – Not being available before critical date – Not being in the market before competitors
  27. 27. Time is money? More time -> More costs More time -> Less revenue (Usually) Revenue is inversely proportional to time to delivery
  28. 28. Opportunity Cost of Delay “6 month delay can be worth 33% of life cycle profits” McKinsey (Reinertsen) 1983 Principles of Product Development Reinertsen, 2009
  29. 29. Deadlines are analogue Different dates result in different values Deadlines are not binary (all or nothing)
  30. 30. I need this and I need it YESTERDAY
  31. 31. Yesterday… 0 200 400 600 800 1000 1200 Yesterday Today Tomorrow Best Before Date Use By Date
  32. 32. I need this and I need it YESTERDAY O dear, I don’t have a TARDIS (time machine) but maybe I can get something for you tomorrow? Brilliant, I knew I could count on you If all the value accrued yesterday then it is lost If value still exists then it might be worth doing
  33. 33. Today’s Lesson #1 A little bit Soon is Worth more than a lot delivered Later
  34. 34. Today’s Lesson #2 Know the Time-Value Profile of the thing you are building
  35. 35. Today’s Lesson #3 Deadlines are elastic by value
  36. 36. How do you get to value? • Ask your stakeholders • Do the analysis • Estimate
  37. 37. Value Poker Like Planning Poker • Value points not Effort points
  38. 38. Time-Value Profile is an input to planning 0 50000 100000 150000 200000 250000 300000 350000 400000 Sep 1 Sep 15 Sep 29 Oct 13 Oct 27 Nov 10 Nov 24 Dec 8 Dec 22 Jan 5 Product B value over 4 months
  39. 39. Solutions must be built to: a) Obtain as much of the value as possible b) Within some time frame c) For a cost which leaves some profit How much profit is made and How much value is extracted are negotiable.
  40. 40. Know the Time-Value profile Know your target profit Know how much you can spend Work back to date & burn rate Engineer, engineer
  41. 41. Feedback Option A Option B
  42. 42. #NoProjects LeanPub https://leanpub.com/noprojects allan@allankelly.net Twitter: @allankellynet

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