Business Value Flashcards
What is a business value?
Term that includes all forms of value that determine the health and well-being of the firm in the long run.
What is a commercial value?
Commercial value is the most obvious one, and consists of functionality or work that translates into profit directly
Give some examples of financial value
- A new version of a software package that customers will pay for to acquire;
- A new piece of functionality that can be paid for, like modules in on-demand web-apps;
- Changes that reduce operating costs, like reduction in required servers by improving code or cheaper distribution to customers (e.g. via Steam instead of packaged);
- Being able to send a bill to a customer for the work that was done;
- Improve the subjective value of the application so people are willing to pay more for it (in Lean Six Sigma this is considered quality or customer value, something Apple is quite good at);
What is the key question for identifying financial value?
‘How much revenue or profit does this work result in?’
What is the benefit of market value and what’s the key question to ask?
The market value increases the potential number of customers.
Key question is thus: how many new potential customers will be served by this new feature?
Give a few examples for market value
- Functionality that draws in a new group of customers;
- Porting applications to other platforms, like smartphones, from iOS to Android, etc;
Adding features that the competitors doesn’t have (or implement them better);
What is the benefit of the efficiency value and what is the key question to ask?
Efficiency value addresses the organizational betterment and it helps decreasing operational costs.
Key question: How much time of money will this save us?
Give a few examples for efficiency value
- Reduce the amount of errors in a task or increase speed (by automating it or parts of it)
- Increasing the usability or quality of an application to reduce load on support desks;
- Reducing the amount of time needed to set up new customer environments or deploy them;
- Decreasing the time to market;
What is the benefit of a customer value and what is the key question to ask?
Customer value increases the likelihood that customers will continue to use your product (‘make it stick better’).
Key question: to what extent will this decrease the likelihood that a customer leaves?
Give a few examples of customer value
- Improving usability in an application to make it easier to use (and reduce frustration);
- Adding a new feature that is commonly requested by users;
What is the benefit of future value?
What is the key question?
Future value increases the chances of more easily achieving one of the other values in the (near) future by investing in innovation and learning now.
Key question: ‘How much will this save us in time or money in the future?’
How does the PO know if all items of the backlog provide value?
All items of a backlog must translate to one of the Commercial/Market/Customer/Efficiency/Future values, so that is the “right stuff”.
How can you validate value?
By releasing to the customers very early and often.
When is a feature valuable?
When it has been released and customer says it’s valuable.
What is the 80/20 rule in this context?
80% of the value resides in 20% of the features. 20% very important features, 15% could have, 65: nice to have.
