Friday, December 16, 2005

Prioritizing Product Backlog: 25%-400% Increase in Revenue

Agile processes focus on customer value. Features with highest business value are delivered first. The problem is that most Product Owner prioritize by what appears to be highest priority without evaluating alternatives.

Mark Denne and Jane Cleland- Huang show that evaluating all possible orderings of delivery of product features (a factorial problem easily done on a computer) based on timing of expense and timing of anticipated revenue will always generate 25% more revenue and in some cases generate 400% more revenue. Sounds like venture capitalists ought to be really interested in this!

Denne, M. and J. Huang, Software by numbers: low-risk, high-return development. 2004, Upper Saddle River, N.J.: Prentice Hall PTR. xviii, 190 p.

Ultimately, software development is about creating value—yet, all too often, software fails to deliver the business value customers need. This book will help you change that, by linking software development directly to value creation. You'll learn exactly how to identify which features add value and which don't—and refocus your entire development process on delivering more value, more rapidly.

Software by Numbers shows you how to:
  • Identify Minimum Marketable Features (MMFs)—the fundamental units of value in software development
  • Accelerate value delivery by linking iterative development to iterative funding
  • Optimize returns through incremental architecture techniques
  • Effectively involve business stakeholders in the development process
  • Sequence feature delivery based on "mini-ROI" assessments
  • Quantify financial risk at every step throughout the development process
  • Manage "intangibles" throughout the software development process