Michael Harris, the president and CEO of DCG Software Value, explains the importance of prioritizing IT projects based on value and offers a simple system for doing so.
How Can We Get More Business Value Out of Software Development?
The title of this article is a common refrain heard among the heads of business units in major corporations. In many cases, it is a fair question; generally, IT management is not focused on value delivery. Instead, it is usually focused on getting a few high-profile projects finished as quickly as possible (utilizing as few resources as possible) in order to prove its worth.
Consequently, IT makes decisions about which software development projects to tackle based on how difficult the project is, how many and which resources the project will require, and who shouts the loudest to get their project done (not necessarily in that order!).
And, of course, project prioritization includes consideration of the budget. Every CIO or software development manager can tell you what their annual budget is; most can even tell you what the budget is for a particular project, as well as how that project is actually tracking against it.
But what about the value delivered by a software project? Does your organization make that consideration? If it does, that’s impressive; very few companies know the distribution of the business value of their projects. Even fewer communicate that business value to the tactical decision makers who are prioritizing software development resources to projects.
Doesn’t agile software development solve this problem? Well, yes and no. Mature implementations of agile prioritize product backlogs (lists of the next tasks or “stories” to work on) by business value. In some methodologies, such as the Scaled Agile Framework (SAFe), business representatives are encouraged to put numeric values on stories to allow for prioritization by value when tactical leaders and teams are making resource allocation decisions.
Unfortunately, most agile implementations are not mature enough to include value information—or, the value information is not disseminated to the actual tactical decision makers (or those decision makers are not aware of the importance of prioritizing by business value).
The solution is the Value Visualization Framework (VVF). VVF is a five-step process that runs in parallel to the creation of the business case for a project. It necessitates that all stakeholders and team members know the business and economic value of the projects they are working on so that they can maximize business value flow.
Project completion is important. Effectively utilizing the IT budget is important. But what’s ultimately important is that IT has an impact on the bottom line of the business, completing work based on what will provide the most value. The VVF can help you define and track that value within your organization. Without such a framework in place, how is your organization defining value?
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