Calculating Value

Calculating business value effectively and using that insight to prioritize the Product Backlog is one of the most important things an organization can do to drive higher profits and achieve a competitive advantage using Scrum. This is because the Scrum framework helps you to deliver product features independently, allowing you to focus on delivering high value functionality first. Time and again, we see that 80% of a product’s value resides in roughly 20% of its features and that 65% of all features are never or rarely used. By using business value as the lens to order the Product Backlog, the Product Owner can get these features into customer’s hands faster, receive feedback, and maybe discover new high-value features. However, too often it is also one of the Scrum practices that gets glossed over or done in an ad hoc way.

Teams that overlook a disciplined approach to business value are leaving money on the table. Regardless of the Estimation technique used, business value should be an explicit consideration and assigned in consistent way. This will eliminate most disagreements about strategic decisions that rely on top-down decrees, intuition or luck. When business value is transparent, both Leadership and Team members can make informed decisions about how best to make the project a commercial success.

This online course details how Scrum Inc. calculates Business Value and uses it to inform our fiscal and strategic goals. Our quick but quantitative method will give you the practical knowledge you need to maximize the business value of your backlog.

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2 Responses to “Calculating Value”

  1. Antonio Balza says:

    What is the location of the Spreadsheet that calculates NPV?

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