Focus On REalised Value
Focus On Realised Value
We prioritise the expenditure of our budget on delivering features and service by considering the value we believe we can deliver to our customers. We need to ensure that the value we thought would be created by a feature or service is being delivered. This knowledge is used to decide to confirm or to change priorities for future work and service delivery.
In A Nutshell
We deliver features in our products and services because we believe they will create value for our customers. That value in turn contributes to the success of our organisation. Before we deliver features and services, what we have is a belief - in other words, we are betting on a successful outcome. After we deliver features we should gather information to confirm that our belief is correct or incorrect.
The information allows us to decide how to act. If the data confirms we made the right bet we can continue to formulate our bets in the same way. We can decide to pursue the bet further in forthcoming periods of work. Alternatively, if the data demonstrates that we made the wrong bet then we can reduce the priority of the investment. In an extreme case we can decide to stop the investment completely.
To get the right information, we need to define how we are going to measure value. Unfortunately, this can be complex to achieve effectively. Value is realised outside of our organisation and delivered into it. This means that value can be impacted by many other exogenous factors, not just the change or feature we have introduced. Disentangling these multiple, potentially conflicting influences is very challenging.
To help simplify the tangle of influences, we often use a combination of direct and indirect measures. Direct measures are immediate or proximate measures of the value we are betting on. Indirect measures examine influences that we believe are correlated (or anti-correlated) with the value we are betting on. If we see signals from direct measures and correctly correlated signals from our indirect measures, we have more confidence that at least some of the change in our value metric is related to the change that we have made.
Implementing Practices
Sustain Metric Definitions
Analyse Metric Data
Use Data To Decide
When we deliver features into a product and when we provide the services offered by that product we are making an explicit investment from our available budgets. We need to evaluate the value realised by the product, its features and services so that we can assess the return from our investments. We use the information provided by our evaluation to help guide large scale decisions on where future investments should be directed.