This document discusses using capabilities analysis to prioritize projects based on business value, risk, and ability to execute. It notes that many IT projects fail to meet expectations or realize value. Capabilities analysis identifies the key capabilities an organization needs, then evaluates each capability based on business value, risk, and ability to execute to generate a "heat map" that helps prioritize projects. This technique provides a framework to objectively discuss priorities based on value, performance, and risk, and allows priorities to be adjusted easily as strategies change. Capabilities analysis has been used successfully over 10 years on over 300 projects saving $200 million.

1. Feeding the Agile Beast Using Capabilities Analysis to Prioritize based on Business Value, Risk and Ability to Execute

2. What’s up? Massive Computing Power Ubiquitous Network Improved Development Methods Service Oriented Architecture & SaaS

3. What’s up? CombinedChanges Value Creation Effectiveness We expect to realize dramatic results

5. CRM fails to deliver the expected ROI 75% of the time (CIO Magazine)

7. Building in the wrong order results in… Increased Risk: Very expensive Rework: Very expensive in cost $ and time Delay: Very expensive in customer happiness, trust, and rev $ Missing Important Stuff: very expensive in customer happiness, opportunity cost Redundant Effort: Expensive, difficult to maintain Over-Engineering/Design (YAGNI): Expensive, slow Lack of Testability: Expensive, quality

8. Part of the Answer Allocate based on Business Value Risk and, Ability to Execute In a way that supports communicating the purpose of the work effectively through development Why is this hard?

9. The How Trap

10. Do you see it?

11. Now you see it!

12. Process is not the right way to look at the problem Process is “how”, it is the implementation of “what” Process tends to be subjective, which is good at the right time Process doesn’t promote innovation Send a Fax

13. Easy, and very high impactIdentify the Capabilities Seeing that faxing is not a requirement does three things Transforms the conversation about the outcome It provides a framework to talk about value, performance, and risk The technique can be used to drive more detailed clarity Create Quote Create Quote Create Certificate Draft Quote Receive Request Create Certificate Draft Quote Receive Request Comm. Quote Create Agreement Interface Comm. Quote Create Agreement Send Agreement Send Agreement

14. Easy, and very high impactPrioritize Capabilities Should I invest in Create Quote? Where should I focus to drive Business Value and Reduce Risk? Business Capability Heat Map Generate Leads Create Quote Create Certificate Draft Quote Receive Request KEY Comm. Quote Create Agreement Send Agreement High Value Medium Value Low Value Low Performing Medium Performing High Performing High Risk Moderate Risk Low Risk

15. Business Value Is it this capability directly aligned with delivering the product strategy? Focusing Objectives Blitz QFD The Business Value Game Real Options Is this capability key to the companies brand? Generate Leads

17. Is there a compliance requirement or other business risk associated with this capability?

18. Does changing this capability introduce a lot of dependent changes or risk?

19. Is there a high cost of delay or market risk with this capability ?Generate Leads

20. Ability to Execute Do we have the clarity on what we need to build? Do we have the skills to build this available? Generate Leads

21. Heat Map Business Value Here Risk Here

22. Summary We have a way to discuss business value, performance, and risk We can retain insight and decision information and set context for everyone We can prioritize up and down and across all stakeholders When the strategy changes, the model is low friction to update

23. Capability Analysis a proven method Original work documenting a process and techniques … 10 years – over 300 applications - $200 million saved

24. Questions Reach out to Dennis Stevens http://www.dennisstevens.com dennis@dennisstevens.com We also offer Enterprise Agile Coaching Agile Project Management Cost Cutting and Innovation