Prioritizing “Business Value” for your Systems

As I discussed in the recent Building up your store POS System: The Agile Approach post, the small deliverable chunks of an agile backlog are ordered, and for the most part executed, by the concept of “Business Value”.

So it seems time to share the secret recipe for “business value”. Are you ready?…

There isn’t one. Sorry. Well, at least there isn’t a secret recipe in the way you might expect.

Business value is a pretty fuzzy term. At its’ most practical, it is simply the order of deliverables in a backlog. Not some magical formula – just whether a work item is at the top of the list or the bottom. What it denotes, though, is the descending order of value to the business. If you executed in the order of your backlog, you are always delivering what is next most valuable to the business.

There are a variety of different simplified ways of determining the backlog order (business value), which mostly tend to focus around Key Performance Indicators (KPIs) or the clarity or risk of work items. These are all important considerations, but you can’t use any one for determining the business value of your deliverables.

Here’s the 10,000 ft view on how business value is really determined:

An informed and empowered product owner considers the vision for the future, the short term goals and dependencies, the state of understanding and risk of the work to be executed, the needs of the different stakeholders, and the feedback from the previous deliverables, as well as the market at large. The product owner is expected to have a detailed understanding and open dialog running with each of these areas and is responsible for ensuring the stakeholders have an understanding of the deliverables, vision and business value.

The agile methodology is adaptable and responsive to new information and priorities largely because it empowers someone who has their finger on the pulse of the product from all angles and who has the ability to adapt and prioritize. KPIs, risk, and dependencies are all excellent things to consider, but they are tools to help you build the big picture. If you are not willing to completely ignore them when the big picture tells you something else is the next most important piece, you fail to leverage the value of Agile.

As a product owner, I ‘ve never had a backlog order that remained stable over time. With my teammates I add, remove, split and re-prioritize almost constantly because, when you’re able to deliver and adapt frequently, what’s next most valuable to the business is a moving target. In fact, that’s sort of the point! For example, a simple report may not seem important to many, but when the product owner knows that the current work commitment cannot be used in production without that report (it’s a critical dependency), it becomes highly valuable to the business despite perhaps being low on risk and KPI metrics.Individual business value measures, such as KPIs, can’t provide that big picture on their own.

So, the question of “what is business value?” turns out to really be “what can a strong-performing product owner help deliver for your product and your business?”. As for the secret recipe? – try an effective, informed and empowered Product Owner.


Jaeger Consulting Group provides Point of Sale System optimization support to connect business goals to software solutions.

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