Agile and the Concept of Intrinsic Value
by Dan Williams
In my previous blog post, I talked about Jim Highsmith’s concept of value delivered being measured at “…the point-of-sale, not the point-of-plan.” I went on to hearty agreement with Highsmith’s views around doing the hard work of defining what the value of the feature/component is to the customer, and then linking that value to a point system which can be tracked against software delivered.
In this article I want to talk about the concept of perspective and value. People understand the world from a variety of perspectives. When we talk about value delivered to the customer, what do we mean? It depends on what it is the customer values. Let me propose some working definitions for discussion purposes.
Instrumental value is that value the customer places on what the product or service will do for them. We often write User Stories to capture software/business requirements with a value statement of some kind in the paradigm expression. This helps the developer understand why they are writing the application code.
As a client/user/customer, I want to be able to enter my credit card information into the payment screen, so that I can purchase the book. The ‘so that’ phrase is understood as the customer or business value of the story.
Intrinsic value is the value something has which is a part of its character. A developer might say that the code they just wrote is ‘beautiful’. Or that another person’s code is ‘beautiful’. They are expressing appreciation for how the code was written, tested, implemented, etc.
Very often it is the instrumental value which informs the persons view of the intrinsic value of an item. But often, the rose is just beautiful and there is nothing for which the rose will be used.
Monetary cost value is that value the customer places on a product or a service related to its cost: 'I am willing to pay $1000 for that widget.' This is also the value which the Product Owner (customer/proxy/business owner) is willing to pay for the development of the software providing the business functionality.
In doing Return on Investment studies (we are remiss if we don’t do them), we are comparing the cost against return. But I believe we miss an important component in our analysis if we do not attempt to understand and factor in the Intrinsic Value of the product or service we deliver. How would we do this?
In my next blog I want to suggest some methods for better understanding Intrinsic Value and how it is the most important factor in directing the team and the business in deciding ‘What’ to build.