Final Remarks

Benefit points complement the concept of points-based estimation.We showed how to use points estimates for both benefit and cost in various project and portfolio management activities. One can also adapt a range of other models that we did not cover (see e.g. [3, 1, 2]) to points-based estimates. Points-based estimates give rise to project management templates into which you can instantiate various monetary values, for example, various scenarios according to uncertainty assessments.

Benefit Points – An Overview

We give a nontechnical overview of the main techniques in this book. It all starts with providing benefit estimates in the form of benefit points. Combining benefit estimates and cost estimates produces a benefit-cost index, with which one can order and reorder backlogs. Benefit points also offer a way to monitor and control the construction of beneficial functionality, not just the amount of functionality. Benefit points and size points can be instantiated with monetary values that reflect bad, most likely, and good case scenarios based on uncertainty assessments.

Benefit and Cost Periodized: Stretching Your Points

When you estimate the life cycle cost and benefit of your software product, your stakeholders should not only be assured that you will deliver value, but also be informed when that value is expected to manifest itself. Periodization is a common method for showing when a return of investment is expected, and one is often careful to express the present value of future cash (net present value) in such deliberations. This chapter shows how to carry out periodization using points. Periodized points then amount to plan templates that can be instantiated with monetary values according to most likely, bad-case, and good-case uncertainty assessments.

Benefit Points for the Project

We start by looking at projects and their most abstract product elements, the epics, and show how to estimate their benefit using benefit points. Then we show how to sort epics according to a benefit-cost index to help decide the order in which to put epics into releases. Instantiating points with a monetary value provides added means of prioritizing and determining when to stop sending epics into construction. We show two modes of estimating benefit: one where the purpose is to fulfil a given goal (confirmatory mode), and the other where the purpose is to explore where to set the goal (exploratory mode).

Benefit Points for the Portfolio

The methodological principles for assigning benefit points to product elements within a project can also be used at the portfolio level. This allows for the management of entire portfolios towards optimizing benefit over cost. We consider bottom-up assessments from the projects at the portfolio level and top-down assessments at the portfolio level within projects. We revisit the confirmatory and exploratory modes.

Business Value Disadvantaged

Despite the current emphasis on benefit in stakeholders’ minds, there is still a focus on cost management when it comes down to the day-to-day work in modern software development. This works counter to underlying assumptions in modern development methodology. We motivate a more deliberate approach to benefits management during development, but it is the combination of cost and benefits management that saves the day.

Earned Business Value Management

It is time to move on to construction time. This is when epics are distributed to releases and scheduled for further detailing. We use benefit estimates and cost estimates to monitor and adjust this scheduling. We will take an existing practice for cost management and use it for benefit management and benefit/cost management: we adapt what is called earned value management to what we call earned business value management.

Agile Uncertainty Assessment for Benefit Points and Size Points

Agile methodology purports to deal with uncertainty through continuous monitoring and learning. To do so, we need to see how productivity is faring against our plans, as in the previous chapter. But we also need to communicate what our uncertainty is realistically. This is regularly done for cost, but must also be done for benefit to obtain a complete picture. In this chapter, we show how both benefit points and size points can be instantiated with values reflecting different levels of uncertainty.