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What Is Required for Business Value?

7 April 2016

There is no such thing as absolute value in this world. You can only estimate what a thing is worth to you.
— Charles Dudley Warner (1829–1900), essayist and novelist

What is required to create business value? At the organizational level, value is generated based on four important factors: vision, people skills, financial strength, and marketing capability. At the operational level, there are many factors that will enhance the value. Several important factors are listed in the figure above, but more are summarized below:
  • Have an on-board, skilled/experienced Scrum team (product owner, ScrumMaster, and development team)
  • Waste management: Cut out gold-plating of features, waiting time, heavy documentation, etc.
  • Time management: Adhere to timeboxes; get things done.
  • Stable teams: The product focus is high when the team is motivated and stable during the project.
  • Release management: Do Scrum (i.e., product backlog, sprint backlog, user stories, minimum viable product, estimating, sprint planning, etc.).
  • Pull system: Create a good pull system and have a fixed limit on work in progress.
  • Just-in-time or right-time decision making is important; delays lead to lower value.
From a product viewpoint, the business value is embedded in every increment in during which the Scrum team (product owner, ScrumMaster, and development team) and stakeholders come together to deliver value. With a traditional project-management approach, we notice that development teams are unaware of the business value of their work; teams are more focused on locked scope. For this reason, Scrum shifts the focus to business value rather than locked scope.

The product owner plays an important role in the process of discovery and to the supporting team during delivery. The picture illustrates how the product owner visualizes business value by validating, nurturing, prioritizing, implementing, and delivering.

The product owner keeps the business value centered to achieve the following goals:
  • Early return on investment by deploying the most important functions
  • Identifying unnecessary or low-key functionality and removing it from the product backlog during continuous prioritization
  • Lowering the costs
  • Motivating the team by letting them know how much business value a story they are working provides
  • Establishing common goals among all stakeholders (internal and external)
  • Reducing the risk
  • Increasing customer satisfaction
Does business value change? Yes. Remember the saying: Change is a constant. In an organization in which flexibility or agility is emphasized, the business justification could change due to many factors. It is therefore important that a project remain aligned and continue to deliver value. The change can even occur during the course of a sprint while the team is busy working. Everyone who adopted or is willing to adopt Scrum should know that Scrum isn’t actually about delivery; it is about change.

A major waste in product development is working on the wrong product. Take a look at earlier products. For many still, most product features are never used because they don’t provide any value to the end user. That’s why Scrum created a value identifier role called the "product owner," who is involved throughout the project in adding and removing requirements, reprioritizing them, and more. The product owner plays an active role in each sprint rather than defining requirements up front and then hoping the team delivers the right value many months later, as so often happens with traditional product managers.

Opinions represent those of the author and not of Scrum Alliance. The sharing of member-contributed content on this site does not imply endorsement of specific Scrum methods or practices beyond those taught by Scrum Alliance Certified Trainers and Coaches.

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