Agile Business Change Blog Thoughts on Agile Strategic Business Change and Agile Delivery

During my studies at Tanaka business school, I was introduced to a concept called utility. It’s basically a concept used in economics to describe perceived value or satisfaction of something. The interesting thing is utility is subjective. I am not a great follower of football so the utility of a season ticket to Arsenal to me is pretty low, as it would also be to a Spurs fan. It’s pretty high for a ‘Gooner’ however.

In an agile project context we are asked to estimate business value for stories to help in prioritisation. The real problem I have encountered is to try and establish a concept of value for something that doesn’t deliver revenue in pounds and pence. What is the value of half a system I cant put live? Without the identification and acceptance that there is value before revenue, we are loosing a great deal of the benefits of early delivery. Utility in early delivery of stories not delivering some quantifiable hard benefit is often deemed negligible or non-existent.

To help address this we have been using two concepts. These are External and Internal value. External value is easy to understand and represents the traditional concept of value. It delivers revenue or some other real measurable business value to the company. Internal value is the term we are using to encapsulate project value such as ability to gain feedback on business models or ability to trial screen flows. It’s probably not as desirable as External value, but it still should have utility.

By identifying that there are two classes of value, we have been able to increase focus on the more subtle benefits and increase their utility. If we cannot attribute External value to a story, can we gain any Internal value, and if so how much?