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Prioritization / Project Management / Requirements / ROI / Software requirements specification
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Using ROI For Requirements Is A Risky Business
We’ve talked repeatedly about using ROI to drive prioritization of requirements based upon value. ROI can be used as the basis for prioritization for all decision making.
If we fail to take risk into account, our calculations will certainly be wrong, and we may make a poor decision. When we talk about accounting for risk in this context, we mean that we are accounting for the unlikely, undesired, or unintentional outcomes. We use the term expected value to refer to the risk adjusted approximation of the outcome. In financial circles, this is also called discounting.
The most common mistake people make when calculating ROI is failing to take into account the expected value of the return or the expected value of the cost of a project.
Definitions / ROI
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Definition of Expected Value
Understanding the expected value of a possible future event allows us to make mathematically sound decisions. We can decide if we want to make an investment. We can assign a reasonable price for our services. We can prioritize requirements. Expected value is a calculation that should be used when calculating ROI.
Marketing / Testing
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Software Testing Series: Top Three Measurements of Quality
The three most important things to understand about the quality of your software are the three things most relevant to your business and your stakeholders (and arguably, your boss).
Top three measurements of software quality
1. How do people perceive our quality?
2. How big of a problem is our quality?
3. How bad is our software, really?
Process Improvement / Software development
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Why Incremental Delivery Is Good
Incremental delivery is a key component of most software projects today – it allows us to deliver the most valuable elements of a system first, which allows our customers to start getting benefit from the system earlier. As additional features are developed, and additional use cases are enabled, they are delivered to the customers, who get incremental value from those features. This can have a significant impact on ROI projections for a project – and can be the difference between getting the deal and losing it.
Definitions / ROI
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Definition of ROI – Return on Investment
We talk about ROI all the time – what is it, in layman’s terms? ROI is the acronym for return on investment. Another way to think of it is “How much profit will we make if we invest in this project?” Profit is revenue minus costs. Technically, the question should […]
Austin TX / Process Improvement / Requirements / Requirements management software / Software development / Software requirements specification / UX
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iRise – software prototyping tool
We received a comment from Tom Humbarger at iRise on an earlier post, which led us to take a look at their site. iRise provides a tool for rapid prototyping of web-based applications, and there’s an overview of the products available. They have iRise Studio which allows people to create […]
Requirements / Slightly off-topic
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Dilbert does product managers
http://www.dilbert.com/comics/dilbert/archive/dilbert-20060129.html We won’t copy the image of the cartoon – but we’ll tell you that it opens with Alice: “I’ll need to know your requirements before I start to design the software.” ObRelatedTopic: How to interview when gathering requirements Great Dilbert products The latest book (Nov 2005) from Scott Adams, […]
Consulting / Lists / People management / Requirements
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Five Measures of Product Manager Performance
Joy posted a really good article last week at Seilevel’s requirements defined blog, Measuring product manager performance on internal system products. Her post is a followup to an extensive and heated debate that happened last fall on the Austin PMM forum. It’s a great forum to subscribe to – a […]