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The Importance of Using Business Metrics to Prioritize Software Features

posted Oct 14, 2014, 9:31 AM by Anjuan Simmons   [ updated Oct 14, 2014, 9:33 AM ]
When prioritizing business requirements, I have heard this numerous times from customers and product owners: "All of these features are important. Find a way to put them all into the release". However, this response is not helpful in a world with limited time, resources, and money. 

As a project manager, I always respond to this "find a way" approach by emphasizing the responsibility the team has to make adjustments to how much work can be committed to by the development team while maximizing value to our customers (without sacrificing quality). In my experience, this is best done by prioritizing requirements in terms of business value which means they need to be ranked in order of measures that are valuable to the business. 

Here are a few measures and guidelines that I have used in my work:

Priority 5 – Implementing this business requirement will increase maintenance renewals in Q4 (after the release) by several multiples of the current rate. This business requirement will increase the ROI of efforts to sell and market the release by several multiples of the current rate. Revenue increases in Q3 (after the release) will be several multiples of the current rate. Our company will be severely penalized (financially) by our customers if this business requirement is not included in the release.

Priority 4 – Implementing this business requirement will increase maintenance renewals in Q4 (after the release) by 2 to 3 times the current rate. This business requirement will increase the ROI of efforts to sell and market the release by several multiples of the current rate. Revenue increases in Q3 (after the release) will be 2 to 3 times the current rate. Our company will be highly penalized (financially) by our customers if this business requirement is not included in the release.

Priority 3 – Implementing this business requirement will maintain the current rate of maintenance renewals in Q4 (after the release). This business requirement will maintain the ROI of efforts to sell and market the release. Revenue will continue at the current rate in Q3 (after the release). Our company will not be penalized (financially) by our customers if this business requirement is not included in the release, but a significant number of customers want it.

Priority 2 – Implementing this business requirement will have no impact on maintenance renewals, the performance of sales and marketing efforts, or revenue after the release. However, it will make a small number of customers happy.

Priority 1 – Implementing this business requirement will have no impact on maintenance renewals, the performance of sales and marketing efforts, revenue, or overall customer satisfaction after the release. Most of our customers don’t even see this as a requirement.
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