Cost of Delay Prioritisation

(also known as CD3 or WSJF)

❓What is it

• 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

📖Authoritative Source

• Principles of Product Flow (Donald G. Reinertsen)