Notice that I prefer making statistical analysis about the performance of the system (historical data) rather than estimating duration. Companies that master the balance between these characteristics are more successful at transforming into Agile organizations. All partially completed features (inventory) are avoiding us reach the goal of making money. So, cost of delay is the amount of money we will not make whether that feature is not released on time. I’m super passionate about creating a working environment that…, The Executive’s Guide to Why Agile Transformation Fails, Preparing For Agile Transformation: Embarking on the Agile Trek and Demonstrating Progress, Strategic decisions focused on market positioning that determines which capabilities the organization wants to develop to successfully compete, The Investment Tier decisions made by a cross-functional group of organizational leads based on economic trade-offs of pursuing certain capabilities/service offerings, The execution level decisions delegated to individuals or working teams, What is efficient is the structure of the governance committees and the transparency into the individuals/groups who make the decisions. For the core processes, e.g., Amazon’s supply chain, the sequence of steps, ownership, handoffs, and decision … As you can see, cost of developing a product or a feature is not considered when prioritising. Flexibility comes in with process improvement, especially in areas where cross-functional input or handoffs occur. Number of sales is not affected by when the product is released. Rather we use cost of delay divided by Duration. It cannot be replaced or reversed. Long life cycle and sales peak is affected by delay.
During the pilot Expedition, the progress made by the sets of teams towards their desired Basecamp (across the delivery, product/program, and portfolio tiers), often exposes the challenges in the Investment Tier. We arrange experiments and hypothesis using “probe > sense > respond” to learn how the system responds to the stimulus.
Process is an operating model element where standardization is key to efficiency and speed. The value of the product features was previously introduced here and has to be estimated considering 4 different perspectives: Notice that these perspectives might be complementary and the total value is obtained summing these 4 areas. Agile decision-making doesn’t mean rushed, on-the-fly changes at the whim of one project stakeholder. Cost of delay is a powerful vehicle to harmonise a single vision of the future and to align a common business strategy.
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