What is Business Value

The term “business value” is bandied around a lot these days when talking about the benefits of Agile software delivery. Agilists argue that more business value can be achieved through Agile than through traditional methods such as Waterfall.

But, what exactly are they talking about when they say “business value”?

I would define business value as something which is of potential short, medium or long term benefit to the business by means of increasing customer happiness and/or ROI. It doesn’t necessarily pertain to revenue or profit, at least in the short term. Sometimes you’re just trying to build a user base of people who love your product before you think about monetizing it.

I would say you are more likely to deliver functionality that provides business value by working in an Agile way. One reason for this is that the time between someone having a marketable idea and that idea becoming part of functioning software is far shorter in an Agile project than a Waterfall project. In fact, in a Waterfall project marketable ideas do not really have the opportunity to come to the surface at all because all requirements and design are defined up front, and even if you push a change through the change request process it still could be months before the idea gets built and put in front of users.

In an Agile project users will get their hands on the product very early so will be able to provide lots of input into the product’s evolution, and this input can turn into software updates very quickly. Thus the chances of ending up with a product that no one uses are far lower.

In short, by building things incrementally and iteratively it is quicker and easier to identify emerging business value.

About the author:
Neil Killick is a highly skilled I.T. professional with 17 years of varied experience in England and Australia. His background is in Java/Web development, but his more recent experience has encompassed being a ScrumMaster, Iteration Manager, Senior Agile BA and Product Owner, as well as a Team Leader, Coach and Mentor in Agile or transitioning environments.