A prioritisation approach to make value and urgency more visible. It quantifies an opportunity cost in economic terms when work is delayed, enabling more objective decision making and trade off decisions.
There are two basic inputs required to work out the Cost of Delay:
1. Value – Calculate a value of the benefits per period, based on an estimation of the work’s economic value to the organisation over a given time period.
2. Urgency – An understanding of the work’s urgency: when do the benefits start to occur or deteriorate? Is there a calendar peak period that is critical to make ?
👥Who
The technique is typically used by a product manager as part of prioritising their product backlog and gaining consensus across stakeholders with conflicting viewpoints of what work is most valuable
🛠 Running the technique
Calculate a benefits figure for the change derived from value definition work already undertaken.
Work out when the benefits would start being realised or when the expected benefits may deteriorate if at all
Derive a Cost of Delay figure using a standard period of time e.g. month
Repeat the steps for initiatives or backlog items competing for the same capacity
This provides an objective comparison on which to achieve transparent consensus
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