Chapter 9. Prioritizing Themes

“The indispensable first step to getting what you want is this: Decide what you want.”

—Ben Stein

There is rarely, if ever, enough time to do everything. So we prioritize. The responsibility for prioritizing is shared among the whole team, but the effort is led by the product owner. Unfortunately, it is generally difficult to estimate the value of small units of functionality, such as a single user story. To get around this, individual user stories or features are aggregated into themes. Stories and themes are then prioritized relative to one another for the purpose of creating a release plan. Themes should be selected such that each defines a discrete set of user- or customer-valued functionality. For example, in developing the SwimStats website, we would have themes such as these:

• Keep track of all personal records and let swimmers view them.

• Allow coaches to assign swimmers to events optimally and predict the team score of a meet.

• Allow coaches to enter practice activities and track practice distances swum.

• Integrate with popular handheld computers for use at the pool.

• Import and export data.

• Allow officials to track event results and score a meet.

Each of these themes has tangible value to the users of the software. And it would be possible to put a monetary value on each. With some research we could determine that support for handheld computers is likely to result in ¤150,000 of new sales. We could compare that with the expected ¤200,000 in new sales if the next version can be used for scoring a swim meet. We could then prioritize those themes. There is more to prioritizing, however, than simply considering the monetary return from each new set of features.

Factors in Prioritization

Determining the value of a theme is difficult, and product owners on agile projects are often given the vague and mostly useless advice of “prioritize on business value.” This may be great advice at face value, but what is business value? To provide a more practical set of guidelines for prioritizing, in this chapter we will look at four factors that must be considered when prioritizing the development of new capabilities.

1. The financial value of having the features.

2. The cost of developing (and perhaps supporting) the new features.

3. The amount and significance of learning and new knowledge created by developing the features.

4. The amount of risk removed by developing the features.

Because most projects are undertaken either to save or to make money, the first two factors often dominate prioritization discussions. However, proper consideration of the influence of learning and risk on the project is critical if we are to prioritize optimally.

Value

The first factor in prioritizing work is the financial value of the theme. How much money will the organization make or save by having the new features included in the theme? This alone is often what is meant when product owners are given the advice to “prioritize on business value.”

Often, an ideal way to determine the value of a theme is to estimate its financial impact over a period of time—usually the next few months, quarters, or possibly years. This can be done if the product will be sold commercially, as, for example, a new word processor or a calculator with embedded software would be. It can also be done for applications that will be used within the organization developing them. Chapter 10, “Financial Prioritization,” describes various approaches to estimating the financial value of themes.

It can be difficult to estimate the financial return on a theme. Doing so usually involves estimating the number of new sales, the average value of a sale (including follow-on sales and maintenance agreements), the timing of sales increases, and so on. Because of the complexity in doing this, it is often useful to have an alternate method for estimating value. Because the value of a theme is related to the desirability of that theme to new and existing users, it is possible to use nonfinancial measures of desirability to represent value. This will be the subject of Chapter 11, “Prioritizing Desirability.”

Cost

Naturally, the cost of a feature is a huge determinant in the overall priority of a feature. Many features seem wonderful until we learn their cost. An important, yet often overlooked, aspect of cost is that the cost can change over time. Adding support for internationalization today may take four weeks of effort; adding it in six months may take six weeks. So we should add it now, right? Maybe. Suppose we spend four weeks and do it now. Over the next six months, we may spend an additional three weeks changing the original implementation based on knowledge gained during that six months. In that case, we would have been better off waiting. Or what if we spend four weeks now and later discover that a simpler and faster implementation would have been adequate? The best way to reduce the cost of change is to implement a feature as late as possible—effectively when there is no more time for change.

Themes often seem worthwhile when viewed only in terms of the time they will take. As trite as it sounds, it is important to remember that time costs money. Often, the best way to do this while prioritizing is to do a rough conversion of story points or ideal days into money. Suppose you add up the salaries for everyone involved in a project over the past twelve weeks and come up with ¤150,000. This includes the product owner and the project manager, as well as all of the programmers, testers, database engineers, analysts, user interface designers, and so on. During those twelve weeks, the team completed 120 story points. We can tell that at a total cost of ¤150,000, 120 story points cost ¤1,250 each. Suppose a product owner is trying to decide whether thirty points of functionality should be included in the next release. One way for her to decide is to ask herself whether the new functionality is worth an investment of ¤37,500 (30 × 1,250 = 37,500).

Chapter 10, “Financial Prioritization,” will have much more to say about cost and about prioritizing based on financial reward relative to cost.

New Knowledge

On many projects, much of the overall effort is spent in the pursuit of new knowledge. It is important that this effort be acknowledged and considered fundamental to the project. Acquiring new knowledge is important because at the start of a project, we never know everything that we’ll need to know by the end of the project. The knowledge that a team develops can be classified into two areas:

• Knowledge about the product

• Knowledge about the project

Product knowledge is knowledge about what will be developed. It is knowledge about the features that will be included and about those that will not be included. The more product knowledge a team has, the better able they will be to make decisions about the nature and features of the product.

Project knowledge, by contrast, is knowledge about how the product will be created. Examples include knowledge about the technologies that will be used, about the skills of the developers, about how well the team functions together, and so on.

The flip side of acquiring knowledge is reducing uncertainty. At the start of a project there is some amount of uncertainty about what features the new product should contain. There is also uncertainty about how we’ll build the product. Laufer (1996) refers to these types of uncertainty as end uncertainty and means uncertainty. End uncertainty is reduced by acquiring more knowledge about the product; means uncertainty is reduced through acquiring more knowledge about the project.

A project following a waterfall process tries to eliminate all uncertainty about what is being built before tackling the uncertainty of how it will be built. This is the origin of the common advice that analysis is about what will be built, and design is about how it will be built. Figure 9.1 shows both the waterfall and agile views of removing uncertainty.

Figure 9.1. Traditional and agile views of reducing uncertainty.

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On the waterfall side of Figure 9.1, the downward arrow shows a traditional team’s attempt to eliminate all end uncertainty at the start of the project. This means that before they begin developing, there will be no remaining uncertainty about the end that is being pursued. The product is fully defined. The rightward arrow on the waterfall side of Figure 9.1 shows that means uncertainty (about how the product will be built) is reduced over time as the project progresses. Of course, the complete up-front elimination of all end uncertainty is unachievable. Customers and users are uncertain about exactly what they need until they begin to see parts of it. They can then successively elaborate their needs.

Contrast this view with the agile approach to reducing uncertainty, which is shown on the right side of Figure 9.1. Agile teams acknowledge that it is impossible at the start of a project to eliminate all uncertainty about what the product is to be. Parts of the product need to be developed and shown to customers, feedback needs to collected, opinions refined, and plans adjusted. This takes time. While this is occurring the team will also be learning more about how they will develop the system. This leads to simultaneously reducing both end and means uncertainty, as shown in the agile view in Figure 9.1.

I’ve drawn the curve in the agile side of Figure 9.1 to show a preference toward early reduction of end uncertainty. Why didn’t I draw a straight line or one that favors early reduction of means uncertainty? I drew the line as I did to reflect the importance of reducing uncertainty about what a product should be as early as possible. End uncertainty does not need to be eliminated at the outset (as hoped for in the traditional view), and it cannot be. However, one of the greatest risks to most projects is the risk of building the wrong product. This risk can be dramatically reduced by developing early those features that will best allow us to get working software in front of or in the hands of actual users.

Risk

Closely aligned with the concept of new knowledge is the final factor in prioritization: risk. Almost all projects contain tremendous amounts of risk. For our purposes, a risk is anything that has not yet happened but might and that would jeopardize or limit the success of the project. There are many different types of risk on projects, including:

• Schedule risk (“We might not be done by October”)

• Cost risk (“We might not be able to buy hardware for the right price”)

• Functionality risk (“We might not be able to get that to work”)

Additionally, risks can be classified as either technological or business risks.

A classic struggle exists between the high-risk and the high-value features of a project. Should a project team start by focusing on high-risk features that could derail the entire project? Or should a project team focus on what Tom Gilb (1988) called the “juicy bits,” the high-value features that will deliver the most immediate bang for the customer’s buck?

To choose among them, let’s consider the drawbacks of each approach. The risk-driven team accepts the chance that work they perform will turn out to be unneeded or of low value. They may develop infrastructural support for features that turn out unnecessary as the product owner refines her vision of the project based on what she learns from users as the project progresses. On the other hand, a team that focuses on value to the exclusion of risk may develop a significant amount of an application before hitting a risk that jeopardizes the delivery of the product.

The solution, of course, is to give neither risk nor value total supremacy when prioritizing. To prioritize work optimally, it is important to consider both risk and value. Consider Figure 9.2, which maps the relationship between the risk and value of a feature into four quadrants. At the top right are high-risk, high-value features. These features are highly desirable to the customer but possess significant development risk. Perhaps features in this quadrant rely on unproven technologies, integration with unproven subcontractors, technical innovation (such as the development of a new algorithm), or any of a number of similar risks. At the bottom right are features that are equally desirable but that are less risky. Whereas features in the right half of Figure 9.2 are highly desirable, features falling in the left half are of lower value.

Figure 9.2. The four quadrants of the risk–value relationship.

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The appropriate development sequence for the features is shown in Figure 9.3. The high-value, high-risk features should be developed first. These features deliver the most value, and working on them eliminates significant risks. Next are the high-value, low-risk features. These features offer as much value as the first set, but they are less risky. Therefore, they can be done later in the schedule. Because of this, use the guideline to work first on high-value features, but use risk as a tie-breaker.

Figure 9.3. Combining risk and value in prioritizing features.

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Next are the low-value, low-risk features. These are sequenced third because they will have less impact on the total value of the product if they are dropped, and because they are low risk.

Finally, features that deliver low value, but are high risk, are best avoided. Defer work on all low-value features, especially those that are also high risk. Try to defer low-value, high-risk items right out of the project. There is no reason to take on a high degree of risk for a feature of limited value. Be aware that a feature’s risk and value profile changes over time. A low-value, low-risk feature in the Avoid quadrant of Figure 9.3 today could be in the Do first quadrant six months from now if all other features have been finished.

Combining the Four Factors

To combine the four prioritiziaton factors, think first about the value of the feature relative to what it would cost to develop today. This gives you an initial priority order for the themes. Those themes with a high value-to-cost ratio are those that should be done first.

Next, think of the other prioritization factors as moving themes forward or backward. Suppose that based on its value and cost, a theme is of medium priority. Therefore, the team would tend to work on this theme midway through the current release. However, the technology needed to develop this story is very risky. This would move the theme forward in priority and on the schedule.

It’s not necessary that this initial ranking followed by shifting forward and back be a formal activity. It can (and often does) take place entirely in the head of the product owner. The product owner will then typically present her priorities to the team, who may entreat the product owner to alter priorities slightly based on its assessment of the themes.

Some Examples

To make sure that these four prioritization factors are practical and useful, let’s see how they can be applied to two typical prioritization challenges: infrastructure and user interface design. In the following sections, I’ll consider a theme and show how these prioritization factors can be applied.

Infrastructure

One common prioritization challenge comes in the form of developing the infrastructure or architectural elements of an application. As an example, consider a security framework that will be used throughout an application. Considered solely on the merits of the value it delivers to customers, a security framework is unlikely to be prioritized into the early iterations of a project. After all, even though security is critical to many applications, most applications are not generally purchased solely because of how secure they are. The application must do something before security is relevant.

The next prioritization factor is cost. Adding a security framework to our website today will probably cost less than adding the same security framework later. This is true for many infrastructure elements, and is the basis for many arguments in favor of developing them early. However, if a feature is developed early, there is a chance that it will change by the end of the project. The cost of these changes needs to be considered in any now/later decision. Additionally, introducing the security framework early may add complexity that will be a hidden cost on all future work. This cost, too, would need to be considered.

Our next factor says that we should accelerate the development of features that generate new product or project knowledge. Depending upon the product being built, a security framework is unlikely to generate relevant new knowledge about the product. However, developing the security framework may generate new knowledge about the project. For example, I worked on a project a handful of years ago that needed to authenticate users through an LDAP server. None of the developers had done this before, so there was a lot of uncertainty about how much effort it would take. To eliminate that uncertainty, the stories about LDAP authentication were moved up to around the middle of a project rather than being left near the end.

The final prioritization factor is risk. Is there a risk to the project’s success that could be reduced or eliminated by implementing security earlier rather than later? Perhaps not in this example. However, the failure of a framework, key component, or other infrastructure is often a significant risk to a project. This may be enough to warrant moving development sooner than would be justified solely on the basis of value.

User Interface Design

Common agile advice is that user interface design should be done entirely within the iteration in which the underlying feature is developed. However, this sometimes runs counter to arguments that the usability of a system is improved when designers are allowed to think about the overall user interface up front. What can we learn from applying our prioritization factors?

First, will the development of the user interface generate significant, useful new knowledge? If so, we should move some of the work forward in the schedule. Yes, in many cases developing some of the main user interface components or the navigational model will generate significant, useful new knowledge about the product. The early development of parts of the user interface allows for the system to be shown to real or likely users in an early form. Feedback from these users will result in new knowledge about the product, and this knowledge can be used to make sure the team is developing the most valuable product possible.

Second, will developing the user interface reduce risk? It probably doesn’t eliminate technical risk (unless this is the team’s first endeavor with this type of user interface). However, early development of features that show off the user interface often reduces the most serious risk facing most projects: the risk of developing the wrong product. A high prioritization of features that will show off significant user-facing functionality will allow for more early feedback from users. This is the best way of avoiding the risk of building the wrong product.

Finally, if the cost of developing the user interface will be significantly lower if done early, that would be another point in favor of scheduling such features early. In most cases, this is not the case.

So because of the additional learning and risk reduction that can be had, it seems reasonable to move earlier in the schedule those themes that will allow users to provide the most feedback on the usability and functionality of the system. This does not mean that we would work on the user interface in isolation or separate from the functionality that exists beneath the user interface. Rather, this means that it might be appropriate to move forward in the schedule those features with significant user interface components that would allow us to get the most useful feedback from customers and users.

Summary

Because there is rarely enough time to do everything, we need to prioritize what is worked on first. There are four primary factors to be considered when prioritizing.

1. The financial value of having the features.

2. The cost of developing (and perhaps supporting) the new features.

3. The amount and significance of learning and new knowledge created by developing the features.

4. The amount of risk removed by developing the features.

These factors are combined by thinking first of the value and cost of the theme. Doing so sorts the themes into an initial order. Themes can then be moved forward or back in this order based on the other factors.

Discussion Questions

1. A feature on the project to which you have been assigned is of fairly low priority. Right now it looks like it will make it into the current release, but it could be dropped if time runs out. The feature needs to be developed in a language no one on the team has any familiarity with. What do you do?

2. What types of product and project knowledge have your current team acquired since beginning the project? Is there additional knowledge that needs to be acquired quickly and that should be accounted for in the project’s priorities?

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