Deadlines vs. Sad-Lines: Using Cost of Delay to Understand your Customer's Real Priorities
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Transcript of Deadlines vs. Sad-Lines: Using Cost of Delay to Understand your Customer's Real Priorities
@jonathansen
Using&Cost&of&
Delay&to&
Understand&your&
Customer’s&Real&
Priorities
Deadlines vs. Sad-lines
@jonathansen
Some Project Challenges
• Delayed&Start&
• Wrong&Thing&Started&
• Premature&Op>miza>on
Problems&that&Happen&Some>mes
Root Cause: Misunderstood Cost of Delay
@jonathansen
Cupcake Market LifecycleAn&Example
Realized(Value
Poten/al(Value
Cupcake&Episode
Compe>tor&starts&selling
@jonathansen
Cupcake Market LifecycleAn&Example
Realized(Value
Poten/al(Value
Cupcake&Episode
Compe>tor&starts&selling
Cost%of%Delay
@jonathansen
Typical Project Start
• Monthly&Release&Cycle&
• Desired&Feature&List&
• Budget:&$4000
“What&can&we&have&this&month?”
@jonathansen
Estimated Delivery Costs
Feature Story%Points T&M%Cost%($)
1 1 $500
2 3 $1500
3 3 $1500
4 10 $5000
@jonathansen
Capacity + BudgetCustomer’s&Backlog
Feature Story%Points T&M%Cost%($)
1 1 $500
2 3 $1500
3 3 $1500
4 10 $5000
Capacity: ≤8 points
Below Budget: $3500
@jonathansen
What About Cost of Delay?Customer’s&Backlog
Feature Story%Points T&M%Cost%($)
Added%Revenue%per%
month%($)
Value%aGer%6%months%($)
1 1 $500 $800 $4,300
2 3 $1500 $500 $1,500
3 3 $1500 $5,000 $28,500
4 10 $5000 $60,000 $355,000
@jonathansen
Customer’s&Backlog
Feature Story%Points T&M%Cost%($)
Added%Revenue%per%
month%($)
Value%aGer%6%months%($)
1 1 $500 $800 $4,300
2 3 $1500 $500 $1,500
3 3 $1500 $5,000 $28,500
4 10 $5000 $60,000 $355,000
What About Cost of Delay?Actual Value:
$33,880
@jonathansen
Customer’s&Backlog
Feature Story%Points T&M%Cost%($)
Added%Revenue%per%
month%($)
Value%aGer%6%months%($)
1 1 $500 $800 $4,300
2 3 $1500 $500 $1,500
3 3 $1500 $5,000 $28,500
4 10 $5000 $60,000 $355,000
Potential Value WastedActual Value:
$33,880
Potential Value
@jonathansen
Tracking a Feature’s CostsCoD&for&“Feature&I”
Worth&$20,000/week&once&released
Dev+QA&es>mate:&$4,000
Development&Costs
@jonathansen
Tracking a Feature’s CostsCoD&for&“Feature&I”
Week 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Value%Added
Wait
Idea&Captured
Dev&&&QA
UATDeployed
Si\ng&in&Backlog
Wai>ng&for&UAT
Wai>ng&for&Deployment
@jonathansen
Tracking a Feature’s CostsCoD&for&“Feature&I”
Week 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Value%Added
Wait
Idea&Captured
Dev&&&QA
UATDeployed
Si\ng&in&Backlog
Wai>ng&for&UAT
Wai>ng&for&Deployment
$4,000&(development&cost)+&$260,000&(13&weeks&Opportunity&Cost)=&$264,000
@jonathansen
Tracking a Feature’s CostsDrop&Everything&for&“Feature&I”?
Everything&has&a&
Different&Cost&of&Delay
@jonathansen
1. Increase&Revenue&2. Protect&Revenue&3. Reduce&Costs&4. Avoid&Costs
Ways to Increase Value
@jonathansen
Prioritizing with CoD
1. CoD&already&known&2. Quan>ta>ve&Es>ma>on&3. Qualita>ve&Es>ma>on
Depends&on&What&You&Have&to&Work&With
@jonathansen
Weighted&Shortest&Job&First
Project DuraQon Cost%of%Delay
Weight%=%CoD%/%
DuraQon1 1 10 102 3 3 13 10 1 0.1
Prioritizing with Known CoD
Source:%%The$Principles$of$Product$Development$Flow
@jonathansen
Cost(of(Delay(($)
Time
High&Weight&First
Project DuraQon Cost%of%Delay
Weight%=%CoD%/%
DuraQon
1 1 10 10
2 3 3 1
3 10 1 0.11
2
3
Weighted Shortest Job First
Source:%%The$Principles$of$Product$Development$Flow
@jonathansen
Low&Weight&First
Cost(of(Delay(($)
Time
1
2
3
Project DuraQon Cost%of%Delay
Weight%=%CoD%/%
DuraQon
1 1 10 10
2 3 3 1
3 10 1 0.1
By contrast, this is horrible
Source:%%The$Principles$of$Product$Development$Flow
@jonathansen
Sample Feature Value CardTitle:&Replace(Sign>Up(Process(with(Google(Accounts(Integra/on
What&kind(s)&of&value&is&this&feature&adding?
☑Add(Revenue&
☐Protect(Revenue
☑Lower(Costs(
☐Avoid(Costs
About&how&much&value&do&you&think&this&will&add/month?
☐<($500(
☒$500(>($999(
☐$1,000(>($9,999
☐$10,000(>($49,999(
☐$50,000(>($99,999(
☐>($100,000
How&will&it&add&those&kinds&of&Value?
The$current$sign-up$system$is$slow$and$10%$of$poten:al$users$abandon$the$process$3$pages$into$it.$Signing$up$with$Google$Accounts$will$take$fewer$than$3$clicks$and$is$projected$to$reduce$abandonment$by$40%.$Also,$we$will$no$longer$need$to$maintain$the$old$sign-up$module.
Complexity: 5$points
Weight: 150
WSJF&again
@jonathansen
Qualitative EstimationClues&in&the&Language
A.“It(is(becoming(increasingly&urgent(for(us(to(release(an(Android(
version”(
B.“We’re(losing(customers(—(we(need(an(Android(version(now!”(
C.“The(founda/onal(API(for(our(Android(app(will(be(shut&down&
on&March&15(so(we(need(to(replace(it(by(then.”(
D.“Maybe(we(should(think(about(wri/ng(an(Android(app(
some>me.”
@jonathansen
Work Item: Standard WorkTypical&Cost&of&Delay&Graph
“It(is(becoming(
increasingly&urgent(for(us(to(release(an(
Android(
version”
Cos
t of
Del
ay (
$)
Time
@jonathansen
Work Item: Standard WorkTrigger&Words
“increasingly&urgent”
“worth&$X&per&year”
“recurring&savings”
“compound&growth”
“compe>>ve&advantage”
“a&priority”
@jonathansen
Work Item: ExpediteTypical&Cost&of&Delay&Graph
“We’re(losing(
customers(—(
we(need(an(
Android(
version(now!”
Cos
t of
Del
ay (
$)
Time
@jonathansen
Work Item: ExpediteTrigger&Words
“right&away”
“drop&everything”
“NOW”
“we&are&bleeding&cash”
“customers&are&screaming”
@jonathansen
Work Item: Fixed DateTypical&Cost&of&Delay&Graph
“The(founda/onal(
API(for(our(
Android(app(will(
be(shut&down&on&March&15(so(we(need(to(replace(it(
by(then.”
Cos
t of
Del
ay (
$)
Time
@jonathansen
Work Item: Fixed DateTrigger&Words
“on&November&15”“next&Friday”
“Quarter&End” “seasonal&opportunity”
@jonathansen
Work Item: IntangibleTypical&Cost&of&Delay&Graph
“Maybe(we(
should(think(
about(wri/ng(
an(Android(
app(
some>me.”
Cos
t of
Del
ay (
$)
Time
?
@jonathansen
Work Item: IntangibleTrigger&Words
“seems&important”
“need&to&refactor”
“in&my&opinion” “probably&useful”
“would&be&nice”
@jonathansen
ConclusionWhat,&Why,&What&to&do
1.Invisible&Lost&Money&2.Queues&Increase&it&3.Bener&Priori>za>on
@jonathansen
Shameless Plug
Next NYC Lean Coffee: Wednesday 7pm @ Spotify