Financial Prioritization of Projects

One of the reasons why traditional planning fails when we manage innovative projects, is because the work reported in the plan is not prioritized by the value to the user and the customer. Many traditional plans are created with the assumption that all identified activities will be completed. Since the project customers do not care about the sequence in which the work is done, the activities are prioritized and sequenced just for the convenience of the development team.

Then, with the end of the project approaching, the team scrambles to meet the schedule by dropping features. Since the work on features has not followed a priority order, some of the features dropped could be of greater value than those are delivered. Moreover, sometimes the delivery of the project is postponed to try to accomplish a feature in delay that has not a real value. Failing in assigning priorities, giving importance to an element of the project that has no value for the customer or postponing the completion of the project to wait for the development of a feature without priority, can lead to the failure of the entire project.

There are 4 primary factors to be considered when prioritizing:
1. The financial value of having features
2. The cost of developing the new features
3. The amount of risk removed by developing the features
4. The amount of new knowledge created by developing the features

Video producer: http://agileonthebeach.com/

Related Videos: