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Business value points measurement

Business value points measurement in Product and Project Management

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Business value points measurement in Product and Project Management

The following article is part of the self-preparation for the modern BVOP® Project Management Certification program.

The BVOP introduces the measurement Business Value Points as a practice and tool for evaluating the current overall business value of the product that’s being developed and its business value fluctuations over time.

  1. Total Business Value Points for a Time Period
  2. Product evaluation based on business value points
  3. Assessing business value points of planned efforts

The total value of the product’s business value points is the sum of points of all planned developments (all functionalities, modules, parts).

All efforts (tasks, user stories, planned work) planned to be developed as part of the product are evaluated individually using business value points.

Total Business Value Points for a Time Period

Total business value points over a period of time is the sum of all business value points obtained from all the developed efforts for a specified period.

Example: All planned tasks for a given month are 100 in total. The first 10 planned tasks are rated with 20 business value points (BVP) each. The next 30 tasks are rated at 10 BVP each. The remaining 60 tasks are rated at 5 BVP each.

The total BVP is 800, which can be considered as the total business value points for the period.

Prioritizing development by business value points may be a transparent method of prioritizing Product Backlog items or task planning based on real value.

Product evaluation based on business value points

The measurement of business value points can show the rise and fall of the total business value of the product.

If the total business value points for a given period are more than the total business value points for a previous period, this may indicate an undesired prioritization of the development in the prior tasks. This way the management offices can detect mistakes in management and take corrective measures.

An optimistic reason for a higher number of business value points per period can be improved research practices or acquired new knowledge from stakeholders or users.

Normally, each subsequent period should have a lesser total sum of business value points, as work is prioritized by the business value points of each task.

In theory, at some point, the expected business value points for a period will be 0, as there will be no more valuable development work.

Tracking the fall in total business value points over periods may be a decision-making tool to close a product or project development.

If total business value points for the past few periods are very low, project sponsors or other stakeholders may make the decision to close the development or estimate its eventual closure, based on the decrease of business value points per period.

Assessing business value points of planned efforts

If any planned work (effort) has been assigned business attributes such as importance, urgency, attractiveness, etc., and each attribute has a numerical value, the business value points (BVP) of each planned work is the sum of all attributes’ value.

Example

If a planned effort titled "Uploading a profile photo" has business attributes as follows:

Importance: 5

Urgency: 3

Attractiveness: 10,

This planned effort has 18 BVP.

Another planned effort, titled "Forgot password", has business attribute values:

Importance: 10.

Urgency: 8,

Attractiveness: 2,

This planned effort has 20 BVP.

In this example, the planned "Forgot password" effort might be scheduled for development before the "Uploading a profile photo" effort because it has more business value points.

The Business Value-Oriented Project Management (BVOPM) and Business Value-Oriented Product Management (BVOPDM) offices create the business attributes and their value according to the product, project, organizational needs, and other factors. 

It is of particular importance that the planned efforts are evaluated against the same business attributes so that accurate business value points can be calculated, therefore making those procedures easier and more transparent.

More details about the business attributes of the planned work are presented in the Business Value-Oriented Product Management section.

The following issues related to chapter "Business value points measurement" are included in the certification exam. The sequence of questions is presented in the table.
The data is current as of November 9, 2024, 11:07 pm

ID Issue Time Category
0 Total Business Value Points for a Time Period 60 sec PM, PDM
1 Assessing business value points of planned efforts 60 sec PM, PDM
2 Product evaluation based on business value points 60 sec PM, PDM

Comments from the BVOP™ community on “Business value points measurement”

Summary

BVOP measures the overall business value of a product being developed and its fluctuations over time using Business Value Points.

The product's business value points are the sum of the points of all planned developments. Each planned effort is evaluated using business value points.

Total business value points for a time period is the sum of all business value points obtained from developed efforts during that period. Prioritizing development based on business value points can be a transparent method for task planning or prioritizing Product Backlog items. For example, if 100 tasks are planned for a month, and the first 10 tasks are rated at 20 BVP each, the next 30 tasks at 10 BVP each, and the remaining 60 tasks at 5 BVP each, the total BVP for the period is 800.

Business value points can be used to evaluate a product's success. If the points increase from one period to the next, it may indicate poor management prioritization. However, it could also mean that research practices or knowledge from stakeholders have improved. Ideally, the total points should decrease over time as tasks are prioritized by their business value. Eventually, the points may reach zero, indicating no more valuable development work. Tracking the decrease in points can help decide whether to close a product or project development. If the points have consistently been low, stakeholders may choose to close the development.

To determine the business value points (BVP) of planned work, each business attribute such as importance, urgency, and attractiveness is assigned a numerical value and then added together. For example, a planned effort with an importance of 5, urgency of 3, and attractiveness of 10 would have 18 BVP. The BVOPM and BVOPDM offices create the business attributes and their values based on the product, project, and organizational needs. It is important to evaluate planned efforts against the same business attributes to accurately calculate BVP. More information about business attributes can be found in the Business Value-Oriented Product Management section.

Comments on “Business value points measurement in Product and Project Management”

  1. Ananth

    What is the scale for categorizing importance, urgency and attractiveness? Please clarify.

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