Estimating Business Value

“Estimating Business Value” with Chris Sims, Founder, Agile Coach, Certified Scrum Trainer at Agile Learning Labs

By Tej Ravindra

September 2012 Event

September’s SVPMA meeting was a rare treat. The audience was actively engaged in hand on estimation, ROI analysis and planning scrums.

Chris Sims, an experience Scrum master presented the philosophy and the practice of Agile methodology: How scrums can be used to help build products in a way that companies can get the most ROI on their investment possible.

Product management is a juggling act of building exciting and valuable products for end customers while ruthlessly prioritizing and keeping an eye on business goals and timelines. The product manager’s role can be compared to an Investment Manager whose job is to manage a portfolio to maximize business ROI. In such a role, its common to feel like one’s in a pickle between all the different stakeholders and competing priorities. How can product managers then empower themselves to play more of a facilitator for all the product stakeholders?

Chris demonstrated this by splitting the audience into teams of 6 or 7 members each. Each team was given the same assignment that used the metaphor of home improvements to demonstrate the challenges of building software. You have a house that you can make improvements on. The improvements are a range of options from painting to adding new floors or even add a swimming pool. The end goal is to increase the value of the house to get the best price when selling the house.  Each improvement has a cost and a benefit. The game had two phases. For the first phase, the team members had a list of all the different improvement options without any numerical value or costs associated with them. Each team member could assign a relative value to an improvement they considered important. In the second phase, the costs associated with each of the improvements were revealed. This created a completely different perception of value and return on investment. In the second go-around, the team had a very different approach to prioritizing the improvements. The costs were used to determine the sequencing of the improvements and the ROI that could be gained out of the improvement.

The Key takeaways that were demonstrated by this exercise were very clear: Building a product is an exercise in understanding how different factors contribute to the success of a product and judging their relative importance. There are always going to be differences on how each stakeholder views the importance of each factor. It is important for product managers to create an environment where all these factors are brought into a common playing arena in front of all the stakeholders.  Consequently, the execution becomes a series of logical steps toward achieving the common goals & understanding that the product team has agreed to. The scrum methodology is a tool that can help product managers do precisely that.

For details on scrum & agile methodology please visit:

Tej Ravindra works in Product Management for RedLaser, a leading shopping app in eBay’s portfolio. In her previous roles, she has led product management for SAAS based solutions in B2B software. Her interest areas include technology & business strategy, mobile applications & data analysis to drive better business decisions.