I am struggling to quantify value (e.g. Cost of delay) of competing priority items so that I can communicate that figure to senior management and can make Lean decisions.
Quantifying value can be a challenge.
This is because:
- Your organisation may not have done the detailed analysis necessary to work out potential benefits, costs, etc.
- Value may also include non-financial factors such as organisational strategy, regulatory requirements, etc.
- Different people in the organisation may have different views on what is valuable.
- Quantifying value on small backlog items may be more difficult than on coarser grained items. For example, it is often easier to compute the value of epics/themes than to do it for user stories.
I would recommend you start a discussion in your organisation about what approach they want to take towards defining value. A lot will depend on how much effort they want to put in to this.
For some organisations it is OK to have a very lightweight analysis of value, perhaps just rating backlog items as high/medium/low value.
For other organisations a more comprehensive approach may be required. These organisations might then consider:
- Deciding at what granularity level to do value estimation.
- Using some kind of relative weighting for factors like cost of delay, user retention, new user generation, etc.
- Increased financial analysis, driven by the business (sales/marketing teams), so that more information is available for determining value.
An important point is that much of this may require a significant investment of time and resources by the organisation just to come up with a framework for value estimation.