Incorporating cost of delay in feature prioritization

Posted on February 14th, 2011 in Agile, Kanban, Lean by siddharta || 5 Comments

When it comes to backlog prioritization, there are many factors to consider. One factor is the “cost of delay” of the feature.

What is cost of delay? And why is it important?

Cost of delay is a model to examine the cost to the business if a particular feature is delayed. This can help product owners understand the time sensitivity of a feature and aid in prioritizing it appropriately. In this blog post, I’ll take a look at four typical cost of delay curves.

Normal

Normal features have a linear cost of delay. If you deliver earlier, you can start getting the business benefits earlier. If you deliver later, then it costs the business more or less proportional to the time it was postponed.

Expedite

Expedited features have a constant, high cost of delay. They are typically emergencies that have to be implemented immediately.  Emergency production bug fixes might fall into this category.

Fixed Date

Some features have a fixed date by when the feature is ready. Some typical cases are to meet a regulatory deadline or to launch a feature at a conference. These types of features have no cost of delay upto the deadline. There is no benefit to be gained by completing the feature early. If the deadline is missed though, then it becomes really costly.

Intangible

Intangible features are long term features that have no immediate need to be implemented, but are required for the long term competitiveness of the project. For instance, upgrading the build or changing the architecture are features that fall into this category.

Once you know which bucket a feature falls into, then it makes prioritization decisions much easier. Obviously expedite features have to go to the top of the backlog. Fixed date features should be done as late as possible, but with a buffer to ensure that they don’t miss the deadline. Normal features fill in the other parts of the backlog and intangibles are scheduled such that they are worked on during periods of downtime.

Webinar

I’ll be expanding on this idea further in an upcoming webinar on Using Class of Service to Manage Risk. The webinar will happen on the 16th of February, 9:30 PM IST (See time in other timezones). Sign up for the webinar to join the discussion.

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5 Responses to “Incorporating cost of delay in feature prioritization”

  1. toolsforagile Says:

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