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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.

closed as too broad by Todd A. Jacobs Apr 8 at 3:11

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    Need more information. – Mark C. Wallace Apr 1 at 13:58
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    "Priority" is likely to be less important than "impact". If building a website, the adding of a "shopping cart" feature and adding the ability to "login" might both be a #1 priority. But, since users can check out as "guest", you can still "go live" without the login feature. – Robert Paulsen Apr 1 at 14:07
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    Hi Asma, welcome to PM.SE! What are the aspects you are considering right now to take decisions? Remember that the priority call is usually a responsibility of the product owner, not from senior management. – Tiago Cardoso Apr 2 at 10:56
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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.

  • Thank you Barnaby for leaving a detailed answer. My organization want me to calculate cost of delay for each feature so that I can move forward by identifying items in backlog that have highest cost of delay. But Quantifying a value is real hard. How value of an Item could be measured? i meant existing customers that we have or products and are demanding for a feature. This New feature is going to in customer retention and might not generate any new return in terms of dollars. – Asma Arshad Apr 2 at 7:37
  • If there is feature for potential customer How can we know the concrete value that newly added feature is going to attract ------ no of customers hence it gives a Good ROI. – Asma Arshad Apr 2 at 7:37
  • The point I am making in my answer is that you need to work with other people in your organisation to find this kind of information. Talk to people in sales and marketing. Find out if they can come up with some finanicial analysis that will help you to progress. I can't tell you what approach to take as it will be different in every organisation. – Barnaby Golden Apr 2 at 9:06

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