VALUE POINTSMaximizing Digital Services ROI

Using Multi-Criteria Decision Analysis

Stephen MaynerScaled Agile, Inc.

SAFe® Senior Program ConsultantScaled Agile, Inc.

steve.mayner@scaledagile.com@stevemaynerstevemayner

#agile2016 #SAFe #WhereIsART

FEDERAL IT IS CHANGING

“To reboot how the government works…”

TheTechFARHandbook DigitalServicesPlaybook

OUR HIGHEST PRIORITY IS TO SATISFY THE CUSTOMER THROUGH EARLY AND CONTINUOUS DELIVERY

OF VALUABLE SOFTWARE.Agile Manifesto, Twelve Principles

AGILEMANIFESTO.ORG/PRINCIPLES

“

”(The Lodge at Snowbird Ski Resort, where Agile was born…)

What is value?

Stock priceMarket shareEPSNVPGrowth

MissionResponsive

TransparentAccessible

Cost EffectiveCompliant

SAFe® isafreelyrevealedknowledgebaseofintegrated,provensuccesspatternsforenterpriseLean-Agiledevelopment.

Knowledgeforpeoplebuildingtheworld'smostimportantsystems

www.scaledagileframework.com

#1-Take an economic view#2-Apply systems thinking

#3-Assume variability; preserve options#4-Build incrementally with fast, integrated learning cycles

#5-Base milestones on objective evaluation of working systems#6-Visualize and limit WIP, reduce batch sizes, and manage queue lengths

#7-Apply cadence, synchronize with cross-domain planning#8-Unlock the intrinsic motivation of knowledge workers

#9-Decentralize decision-making

If you only quantify one thing, quantify the —Donald G. Reinertsen, Principles of Product Development Flow

weighted-shortest job (WSJF)

Reinertsen, D. (2012). The principles of product development flow: Second generation lean product development. Redondo Beach, CA: Celeritas Publishing

COST OF DELAY

DURATION

USER-Business value + time criticality + risk reduction / opportunity enablement

Job size

ThejobwiththehighestWSJFprovidesthegreatesteconomicbenefit.

Scaleforeachparameter:1,2,3,5,8,13,20

Note:Doonecolumn atatime,startbypickingthesmallestitemandgivingita“1.”

Theremustbeatleastone“1”ineachcolumn!

WSJF==User-businessvalue+Timecriticality+RR|OEvalue

Jobsize

CoD

Duration

What is “USER BUSINESS value”How can it be quantified

The key questions for government agencies…

Multi-Criteria Decision Analysis

(MCDA)…a general framework for

supporting complex decision-making situations with multiple and

often conflicting objectives that stakeholders groups and/or

decision-makers value differently

Belton, V., & Stewart, T. (2002). Multiple criteria decision analysis: An integrated approach. Springer.

Multiple stakeholdersStructured decision alternatives

Facilitate decision dialogueQuantify categorical criteriaUnify plural value dimensions

Step #1

Program portfolio management team determines

Value criteria

What is USER BUSINESS value

Retire the mainframeReduce operating costs

Ensure complianceGenerate new revenue

Increase stakeholder satisfactionAdd new capabilities

Step #2

Program portfolio management team determines

Scoring definitions

How can it be Quantified

Retire the mainframe5 – directly enables functionality to be turned off4 – direct precursor to disabling mainframe functionality3 – strongly improves ability to migrate2 – moderately improves ability to migrate1 – nominally improves ability to migrate0 – no relationship to retiring the mainframe

Scoring definition example

Ensure compliance5 – required to comply with regulations, laws, directives0 – not required for compliance

Scoring definition example

For this decision analysis technique, an ordinal scale (Likert) is more appropriate than interval scale (Fibonacci)

Step #3

Program portfolio management team determines

Relative weighting

How can it be Quantified

30% retire the mainframe20% reduce operating costs20% ensure compliance10% generate new revenue 10% increase stakeholder satisfaction10% add new capabilities

100%

weighting example

Step #4

Program portfolio management team builds

Value matrix

Putting it all together

Criteria Weight Scoring Definitions RawScore

WeightedScore

RetiretheMainframe 30% 5– Directlyenablesfunctionalitytobeturnedoff4 – Directprecursortodisablingmainframefunctionality3 – Stronglyimprovesabilitytomigrate2– Moderatelyimprovesabilitytomigrate1– Nominallyimprovesabilitytomigrate0– Norelationshiptoretiringthemainframe

3 9

CostSavings 20% 5– ImmediateAND>=$100M4 – Within1yearAND>=$25M3 – Within2yearsAND>=$10M2– Within3yearsAND>=$1M1– Within5yearsOR>=$100K0– Nocostsavings

4 8

Compliance 20% 5– Requiredtocomplywithregulations, statutes,directives0– Notrequiredforcompliance

5 10

NewRevenue 10% 5– Directlyenablesnewrevenue>=$100M4 – Directlyenablesrevenuebetween$25Mto$99.9M3 – Directlyenablesrevenuebetween$10Mto$24.9M2– Directlyenablesrevenuebetween$0.1Mto$9.9M1– Indirectlyenablesnewrevenue0– Noconnectiontorevenuegeneration

2 2

Stakeholder Satisfaction/NewCapabilities

10%10%

5– Providesatop5mostrequestedenhancement4 – Providesatop50mostrequestedenhancement3 – Directlyresolvesatop5mostcommonlyreportedissue2– Directlyresolvesatop50mostcommonlyreportedissue1– Providesunrequested/ITgeneratedenhancement0– Noconnectiontocustomersatisfaction

4 4

Total ValuePoints 33Apply above user story level (epics, enablers, capabilities, features) - Cohn

Use modified estimation pokerwith numbered cards 0 – 5 to

achieve consensus

USER-Business value + time criticality + risk reduction / opportunity enablement

Job size

Value points + time criticality + risk reduction

Job size

Value points

JOB SIZE

Retirethemainframe

Reduceoperatingcosts

Ensurecom

pliance

Generaterevenue

Custom

ersatisfaction

Addnew

capabilities

TotalValu

ePoints

JobSize

WSJF

Weighting 3 4 5 2 1 4Epic/Feature3 0 5 5 2 2 4 67 5 13.40

Epic/Feature6 5 5 4 4 2 4 81 13 6.23

Epic/Feature5 2 1 2 2 1 1 29 5 5.80

Epic/Feature1 3 3 1 2 2 2 40 8 5.00

Epic/Feature2 2 3 5 4 3 3 66 20 3.30

Epic/Feature4 0 1 3 1 1 4 38 13 2.92

0

10

20

30

40

50

60

70

80

90

100

1 2 3 4 5 6 7 8 9 10 11 12

Program Increments

Value Burnup Chart

Value Points

ConsistentFair

DefensibleUnderstandable

Measurable

Hands-on EXERCISE

Before you begin…

FORM TABLE TEAMS AND build your

MATRIX

3min

ValueMatrixA.

5–4–3–2–1–0–

B.5–4–3–2–1–0–

C.5–4–3–2–1–0–

Weighting

Acceptance criteria:Two flip chart sheets (one ofeach) per table that look like the examples to the right.

Weight_________ValuePoints

Epic1– Raw_________

Epic1– Wgt______________

Epic2– Raw_________

Epic2– Wgt______________

Epic3– Raw_________

Epic3 – Wgt______________

A.B.C.

Step #1

DETERMINE YOUR

VALUE CRITERIAAcceptance criteria:3 value categories

Examples:1. Security2. Ease of Access3. Single UX 5

min

ValueMatrixA.Security

5–4–3–2–1–0–

B.EaseofAccess5–4–3–2–1–0–

C.SingleUX5–4–3–2–1–0–

Weighting

Step #2

DETERMINE YOUR

SCORING DEFINITIONS

10min

Acceptance criteria:0-5 definitions for each criteria

Examples:5. Enables highest level of security4. Enables strong security3. Enables moderate security2. Has limited security enablement1. Has minimal security enablement0. Has no security enablement

ValueMatrixA.Security

5– Enableshighest4– Enablesstrong3– Enablesmoderate2– Limitedenablement1– Minimalenablement0– Noenablement

B.EaseofAccess5–4–3–2–1–0–

C.SingleUX5–4–3–2–1–0–

Weighting

Step #3

DETERMINE YOUR

RELATIVE WEIGHTING

2min

Acceptance criteria:Weighting values for each criteria that total 100%

Examples:A. Security 50%B. Ease of Access 25%C. Single UX 25%

ValueMatrixA.Security

5– Enableshighest4– Enablesstrong3– Enablesmoderate2– Limitedenablement1– Minimalenablement0– Noenablement

B.EaseofAccess5–4–3–2–1–0–

C.SingleUX5–4–3–2–1–0–

Weighting

50%

25%

25%

Step #4

TEST YOUR

VALUE MATRIX

5min

Acceptance criteria:Weighting listed for each criteriaEach epic scored using your value matrixWeighted score calculated for each epicTotal value points listed for each epic

Epics:1. API access to all source systems2. SSO multi-factor authentication3. Live agent option for all services

Weight_________ValuePoints

Epic1– Raw_________

Epic1– Wgt______________

Epic2– Raw_________

Epic2– Wgt______________

Epic3– Raw_________

Epic3 – Wgt______________

A.B.C.5 2.5 2.5

421

205 2.5

352

1512.52.5

224

105 2.5

27.5

30

17.5

TEAM REPORTS

10min

Acceptance criteria:Spokesperson for each team identifiedTeam value matrix describedTeam scoring results describedReport completed in 2 min timebox

Questions?