Instead of Prioritize the present when planning your product. Neglecting the future is almost as bad as over-emphasizing it. The key is to incorporate your plans for the future correctly by making them play second fiddle to the present needs of your market. Serve both today and tomorrow – but […]
Flashback
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Flashback: A Year Ago This Week on Tyner Blain [2006-02-10]
A look back at the best from a year ago
Business Analysis / Prioritization / Product Management / Requirements / ROI
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Prioritization With ROI and Utility
Prioritization with ROI is generally thought of as a quantitative analysis. For hard ROI, that is true. For soft ROI, it is anything but true. You have to make a prediction of the utility of the requirement or feature. That predicted utility is based on our expected utility, which is based on your past experiences. Your past experiences are reflected in remembered utility, which is a function of experienced utility. How can you know with certainty, and use that to prioritize requirements or features?
Product Management / Requirements
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From Market Requirement To Product Requirements
We looked previously at an example of market analysis, defining first a market opportunity, and then a market requirement. We wrote an article a while ago about how to go from an MRD to a PRD. In this article, we will look at the journey from our market requirement to associated product requirements. And thanks, Roger, for throwing down the gauntlet.
Business Analysis / Requirements / Requirements gathering / ROI
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Don’t Prevent My Success
Finding the right balance when defining requirements can be hard. On one side, we want to avoid an inadequate system – “Don’t prevent my success by excluding features I might want”. On the other side, we want to avoid cost-overruns, delayed schedules, and negative-ROI features. This can be a hard line to walk.
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.
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 […]