Tuesday, February 3, 2015

Delivering Early Value - The True Benefits

I just started scratching the surface of Real Options (lmgtfy). What this means for software projects is very interesting. It offers full justification, in most cases, to invest in early delivery of select features.

The chosen features may not necessarily be the most important to the desired final product. They may be of greater value when they offer options, or at least enable some decisions to be delayed.

That being said, there is also may be a benefit from delivering the reusable components sooner when compared to other components and features. For example, in an Enterprise Applications environment where the system involves integration between several components and subsystems, delivering the shared components first may offer a great benefit if other projects can utilize those components.

Project A is expected to run 12 months and will deliver several components that can be reused by other planned projects. Project B is expected to run 4 months and is planned to start 3 months after Project A.

If B can benefit from a component or feature (CF) from A, then both will benefit from delivery of CF if it can be completed before B has a dependency on CF.

The obvious benefit is that CF can be used by B as well as A. The Real Options benefit is that the Opportunity Cost of CF would not be a total loss if A is killed after the 3 month milestone. Essentially, early delivery of shared CF creates a material benefit in that it produces the option to abandon A for other reasons.

I may not be hitting the mark completely with respect to Real Options, but it made me think a bit about how we can plan our work when there are multiple ongoing projects, or even when there may be a benefit beyond the current project. I'm not suggesting this to be taken as a rule, just something to consider when planning projects.

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