Calculating Business Value

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Business value for a for profit company is typically NPV or IROI. These can be calculated in very simple or sophisticated ways- such as monte carlo analysis of SWAT criteria with percentage bands of confidence.

Business value for a non-profit company is typically an assessment of “awesome points” towards delivering on the non-profit’s mission (typically as stated in the mission statement). Stories with more “awesome points” are judged by the product owner (with the help of the “office of the product owner” and stake holders if needed) to have more impact to the folks to served in line with the mission statement.

In either case, the point of BV calc is to aid in prioritization. In most scenarios, we want to do the riskiest stuff first to reduce risk, and the most valuable stuff first to achieve early return through boosted team morale and potentially revenue if the PO chooses to ship early.

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