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Measuring Business Value in Agile Software Development

Measuring business value for software development isn’t easy. Point in fact it’s rather hard to put a quantifiable measurement on something that simply doesn’t have a quantifiable metric tied to value in it’s life-cycle. This article by Kelly Waters notes that sometimes it’s painfully obvious what the value is to the business (in the case of developing a new software package for sale, for instance), but more often than not the measurement is ambiguous or non existent. How does one get measurement on a team that addresses bug fixes, user requested enhancements, or new features? Waters suggests using Fibonacci points (where a series of numbers where the number is the sum of the previous two (1,2,3,5,8, etc.)) to assign business value and size of the project: The development team provides the points for size, because only they are qualified to judge how big a feature is, relative to another. Whereas the business value points should come from the Product Owner/Business Owner. In the same way as the development team estimates in points, the Product Owner decides on a business value for each item, relative to each other. The key thing here is that the estimated business value is relative, i.e. a feature with a business value of 2 is twice as valuable as a feature worth 1; a 5is worth 5 times a 1, etc. Using the Fibonacci score, a calculation could then be done wherein the business value is divided by the size, you can come up with a scale of priority, which Waters calls the “priority score”. Waters is the first to point out that this is a rudimentary way of determining the business value of software development in Agile, but it still might be worth a shot if there are no current measurement systems in place.

About Matthew Kabik

Matthew Kabik is the former Editor of Computer Aid's Accelerating IT Success. He worked at Computer Aid, Inc. from 2008 to 2014 in the Harrisburg offices, where he was a copywriter, swordsman, social media consultant, and trainer before moving into editorial.

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