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  • Writer's pictureMehmood

Business Value

One of the key objectives in Agile product management and product development is to maximise business value. But what is business value? How do we define it?

The definition of business value is dependent on context. We need to understand what value means to a particular organisation because it's not the same for every organisation.

Business value is not always return on investment

By the way, it's difficult to calculate overall ROI and even more difficult to calculate it per feature or user story.

Customer value doesn't always equate to organisational value

For example: a company's strategy might be to get rid of 20% of its lowest paying customers as they are too expensive to support. So in this case, to provide value to the organisation we need to destroy customer value.

Bureaucracy delivers business value because it satisfies an underlying need

The key point is that business value is dependent on organisational priorities and varies across organisations.

In Agile, we understand that user requirements aren't sufficiently known up front and as we iteratively work through the problem that we really understand user requirements. In the same way, it's naïve to think that the business stakeholders know and fully understand what value means to the organisation at the outset. We need to figure this out iteratively and collaboratively.

Our goal in Agile is to understand the underlying need, the business value that must be delivered, and satisfy that in the best way possible.

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