The Holy Grail of all Agile discussions goes like this ...
We focus on value over cost
This is a mantra repeated by agilest and vendors of agile tools as well. The big question is ...
What are the units of measure of Value?
The units of measure of Cost are dollars. When we hear We Focus on Value over Cost, in what units of measure are these two variables being compared to one another? A better question is where is this Value being defined?. And another question how is this value being defined?
If we are going to move beyond the platitude of value over cost - which by the way is simply bad economics, since the ,,,
Value of something can't be determined unless you know the cost to acquire that value
but let's ignore this naïve concept for the moment. How can Value be defined and measured?
In our Software Intensive System of Systems world, System Engineering is the dominant paradigm for increasing the probability of program success. This is not the Systems Engineering of the IT server systems engineering. This is the INCOSE Systems Engineering, defined as:
Systems Engineering is an interdisciplinary approach and means to enable the realization of successful systems.
Systems Engineering focuses on defining customer needs and required functionality early in the development cycle, documenting requirements, then proceeding with design synthesis and system validation while considering the problems encountered for:
- Cost and Schedule
- Training and Support
Systems Engineering integrates all the disciplines and specialty groups into a team effort forming a development process that proceeds from concept to production to operation. Systems Engineering considers both the business and the technical needs of all customers with the goal of providing a quality product that meets the user needs.
In this paradigm there are two primary measures that the product or service being produced satisfies the needs of those paying for the work:
- Measures of Effectiveness are operational measures of success closely related to the achievement of mission or operational objectives. They provide insight into the accomplishment of mission needs independent of the chosen solution.
- Measures of Performance characterize the physical or functional attributes relating to the system operation. They provide insight into the performance of the specific system.
So Now What?
We've got some high level definitions, but are no closer to the units of measure needed to compare Value with Cost.
The Measures of Effectiveness (MOE) are defined by the customer or user point of view. These are the customer's key indicators that the mission has been achieved in terms of performance, suitability, and affordability across the lifecycle of the product or service.
MOE's focus on the systems capabilities to achieve mission success, within the total operational environment. MOEs represent the customer's most important evaluation and acceptance criteria.
If the customer doesn't know the Measures of Effectiveness in some form, to some level of confidence, the software project is on a Death March and no software development method is going to fix this problem.
The Measures of Performance state the attributes considered important to ensure that the system has the capability to achieve the operational objectives. MOPs are used to assess whether the system meets design or performance requirements that are necessary to satisfy the Measures of Effectiveness. MOPs are derived from or provide insight to the MOEs or other user needs.
If the customer doesn't know the Measures of Performance in some form, to some level of confidence, the software project is on a Death March and no software development method is going to fix that problem.
In the End
When we hear value over cost and don't have a unit of measure for Value it's just a platitude. When we hear value over cost and don't know the cost to achieve that Value, it's just a platitude.
So don't fall for the platitude approach to spending other peoples money in the presence of uncertainty. Define the MOEs, MOPs and the cost to achieve them.
With the MOEs and MOPs there is a 3rd measure for the products or services that must also be connected with the cost for achieving them. Technical Performance Measures.
With all three (MOE,MOP, TPM) those paying for the work can monetize these to establish a common basis of measure with the Cost to produce the value.
Until those conjecturing you should focus on Value over Cost can produce units of measure for that comparison, consider their statements as just platitudes with no actionable outcomes.