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Aligning Business Objectives to Requirements, Part 2: Objective Chains

In my last post, I talked about the importance of prioritizing features against project business objectives. However, this is easier said than done! While it is easy enough to say that we should cut features that do not help meet the business objectives, it can oftentimes be difficult to identify exactly whether and how a given feature helps us meet the business objective. However, Seilevel has developed a modeling technique called Objective Chains that help us get closer to a quantitative answer.

Objective chains help IT product managers and other decision makers place a rough dollar value on the expected benefit of a given feature by linking the feature to its business objective through a series of statements called objective factors that highlight how the feature helps provide value to the business. Each objective factor has an equation associated with it. Analyzing these objective factors and their associated equations can provide an illustration of that feature’s contribution to the business’s core objectives, and overall, your needed software requirements on the project.

Let’s look at an example of an objective chain for a project that aims to increase sales revenue by providing better training tools to their sales representatives.

Objective Chain Example

 

In this example, the business objective is to increase revenue through higher sales. We can trace the connection between the business objective and the two features (online training for sales reps and downloadable training materials for sales reps) via the objective factor statements. Using current state data and educated guesses about the percentage of sales reps that pass tests with and without training, we can create the objective equations that ultimately provide quantifiable values for each feature. In the example above, it becomes clear that online training will provide much more value to the organization than downloadable training.

Objective chains are crucial for aligning a project’s feature set to the business goals of a project. However, as IT practitioners, it can be difficult to motivate business stakeholders to provide the metrics necessary to create objective equations. Oftentimes these metrics are not measured, or business stakeholders fear putting their reputations or their departments at risk by providing measurable metrics that may turn out to be incorrect later on.

To complete objective chain analysis it is not necessary for the metrics you use to be completely accurate and verifiable; even broad estimates will usually provide sufficient value to begin to analyze the contribution of a feature to the overall business objective. Will the feature provide $10,000 of additional revenue, or $100,000? Will implementing a given feature save $2,000? Or $200,000? You can start by providing your own initial estimate based on educated guesses and ask your business stakeholders to provide input.

Objective chain analysis will usually reveal that the initial list of features can usually be cut dramatically with minimal impact to the project’s ability to deliver business value, saving your organization time, money and drama down the road.

Product managers and business analysts out there: how do you prioritize features on your projects? Leave me a comment!

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  1. The Challenge of Aligning Business Objectives with Software Requiements - November 2, 2015

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