What is the definition of Business Value in Agile?

What is the definition of Business Value in Agile?

When you see this term, you might think this refers to an organization's overall financial value and products. The context for answering this question is defining the value of a specific set of requirements, capability, feature, or user story for a product.

Business value has tangible and intangible benefits a business can get from the capabilities of a product. While mostly considered financial, other aspects can't be measured in terms of dollars but are equally important to determining business value.

Tangible Business Value

These are items you can physically see, touch, and measure. Often we measure the tangible in dollars, but other measurements are used. Here are some examples:

  • Revenue Growth

  • Lost Revenue

  • Expense Reduction

  • Increased Expenses

  • Total Cost of Ownership (TCO)

  • Return on Investment (ROI)

  • Cycle Time Reduction

  • Service Level Agreement (SLA) Penalties

  • Service Level Agreement (SLA) Bonuses

  • Outage Penalties

  • Percentage of Market Share

  • Decreased Work Effort

  • Sprint Velocity (Speed of Product Feature Deployment)

  • And more

Intangible Business Value

These are items that you can't physically see or touch. Often they are difficult to measure in terms of dollars, and determining the measurements for intangible benefits can be difficult. Here are some examples:

  • Company Reputation

  • Customer Satisfaction

  • Employee Satisfaction

  • Service Tickets

  • Problem Tickets

  • Product Reliability

  • Product Safety

  • Legal and Contractual Compliance

  • Regulatory Compliance

  • Risk Avoidance or Mitigation

  • Reduced Resources

  • Business As Usual (BAU) - Maintenance, Bug Fix, Support

  • And more

Paul Crosby

Product Manager, Business Analyst, Project Manager, Speaker, Instructor, Agile Coach, Scrum Master, and Product Owner. Founder of the Uncommon League and the League of Analysts. Author of “Fail Fast Fail Safe”, “Positive Conflict”, “7 Powerful Analysis Techniques”, “Book of Analysis Techniques”, and “Little Slices of BIG Truths”. Founder of the “Sing Your Life” foundation.

https://baconferences.com
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