Your Teams just spent $864k on an Epic and Features, do you know what you got for that investment? (spoiler, probably not)

If you have developed and follow an ART/PI Planning approach, then it is fairly easy to determine your fixed costs and then track costs per Epics and Features

Consider the following example:

1. Your avg cost of a team is $40k a sprint
2. and you have 10 teams in your ART
3. and your PI Planning cycle is 4 sprints (and one for IP)
4. then with 4 active sprints, across the PI your total cost for the ART would be $1,600,000 or $6,400,000 annually.

Multiply that by the number of ARTs in a decent-sized organization (let’s say 30), then you have a potential annualized cost of $192,000,000 to support the development and delivery of work for the organization. That’s a lot of money!

Do you have any idea how much value you get from any of this investment? Are you getting value, sure, but are you maximizing your investment ROI? Probably not.

Let’s look at a typical working scenario:

A PO has a new Epic, that contains features that will span across 3 teams (often across multiple ARTs, that’s a hidden cost we aren’t even considering here, but this cost can be massive). These 3 teams will consume 30% of every sprint for the next 2 PIs to develop and deliver the features related to this Epic.

So, if your sprint cost is $40k, the allocated cost for 1 team would be $12k, or $36k for all three teams. With 2 PIs and 4 active sprints, the teams will be working on this for a total of 24 sprints.

So, for an Epic, stretching across 3 teams and 2 PIs, consuming 30% of their capacity the cost of this single Epic would come in around $864k.

And as is often the case, there has been some attempt to wordsmith value in whatever format you use to present business cases, but most often there is not a concrete nor quantifiable way to assess the value the Epic is going to deliver, we simply don’t put ourselves on the hook very often to account for the value we are trying to deliver. This leaves us with a focus on cost over value and our agile metrics favor productivity, not value delivery.

If the outcome of the Epic was supposed to reduce costs by 10%, and redirect 20% of customer service requests to Chat, then we need to say that and track that.

And it’s ok if our ideas don’t always pan out, that is the nature of product development, however, if we never put a marker out there for us to target, then we are just throwing darts hoping something sticks. And if we don’t have a marker to check us, we are potentially investing thousands of dollars into features that aren’t returning any value, which is really negative value to the company's bottom line.

I created QValue to provide a way for your Product Owners and teams to identify quantifiable outcomes that we can visualize and make transparent via value realization. QValue provides you with a way to quickly establish an outcome-based value score, that is aligned with your strategies. If you are using OKRs QValue provides you with the ability to tie your Objectives and Key Results to the quantifiable outcomes being identified by your Product Development teams.

Regardless of economic conditions, you have a fiduciary responsibility to manage your business in the most cost-effective way you can, and QValue will help you with this responsibility.

To learn more about QValue, please contact me at michael@soundagile.com