Value Driven Delivery (Domain II) contains the focus areas & quick notes on this topic which will help you to pass the PMI-ACP® exam offered by PMI. Domain II Value Driven Delivery accounts for 20% of all questions in the Exam (i.e. ~24 questions among 120 Exam questions). Below is a collection of the key knowledge addressed in Value Driven Delivery and the tasks related to the domain (Deliver valuable results by producing high-value increments for review, early and often, based on stakeholder priorities. Have the stakeholders provide feedback on these increments, and use this feedback to prioritize and improve future increments).
Focus Areas for Value Driven Delivery
Economic models
- Present Value (PV) = FV / (1+r)n where FV is Future Value, r is interest rate & n is the number of time periods.
- Net Present Value (NPV) = – Initial investment + Sum of each ear in today’s terms, a positive NPV means the project is profitable.
- Return on Investment (ROI) or Benefit Cost Ration (BCR) = Net Benefit of the project/Total cost, a positive ROI means the project is profitable.
- Internal Rate of Return (IRR) = The discount rate at which the project inflows and outflows are equal. The higher the positive IRR, the more profitable the project.
Agile Charters: W5H
- What is the scope of the project?
- Why is the project being undertaken?
- Who will be impacted because of the project?
- When will the project start and end?
- Where will the project occur or deliver?
- How will the project be executed?
Little’s law
WIP = Lead time x Throughput.
- Lead Time – Average time an item spends in the system,
- Throughput – Average rate at which work departs or is completed.
Reduce Cycle Time
- Reduce variability in the rate of arrival
- Reduce variability in the rate of processing
- Limiting work in progress
- Removing blockers, waiting times
- Investing in smart engineering tools and practices
- Investing in a cross-functional team
Value-based prioritization technique
- Numerical Assignment: Prioritize business requirements in order of value to rank them in priorities of 1, 2, 3, or High, Medium, Low, and so on.
- Analytical Hierarchical Process (AHP): A structured technique used for complex decision-making in a group environment.
- 100-point or Cumulative Voting Method: It is like an opinion poll for determining the priority of items in a group environment.
- MoSCoW: Must have, Should have, Could have, Won’t have
- Kano Analysis Model: Using the model, the product owner and the team are able to prioritize a product feature in one of the five categories mentioned below and expend resources to deliver them – Basic / Must-be, Attractive/Delighters, One-dimensional/Performance, Neutral/Indifferent, Reverse
- Wieger’s method: It is a quantitative analytical approach to prioritization13 that makes a weighted computation of value, cost, and risk associated with a requirement.
Minimally Marketable Features (MMF)
The minimal functionality set (a group of user stories or a package of features) that can deliver values (e.g. useful) to the customers / end-users a distinct and deliverable feature of the system that provides significant values to the customer (can be sold/used immediately) chosen for implementation after value-based prioritization can reap the return on investment instantly
Minimal Viable Product (MVP)
The minimal product (with just essential features and no more) that allows can be shipped to early adopters to see and learn from the feedback instantly. The concept is somewhat similar to Minimally Marketable Feature (MMF) in which MVP is the first shippable product with the first set of MMF.
DEEP attributes of the product backlog
- D – Detailed appropriately
- E – Estimable
- E – Emergent
- P – Prioritized
Agile Metrics and KPIs
- Planned versus Actual Velocity
- Release Burndown charts
- Burnup charts
- Combined Burnup and Burndown Charts
- Iteration Burndown Charts
- Parking Lot Chart
- Kanban Board / Task Board
- Earned Value Management (EVM)
- Schedule Performance Index (SPI) = Earned Value (e.g., in story points) / Planned Value (in story points). An SPI less than 1 signifies that the project is behind schedule whereas a value greater than 1 means the project is ahead of schedule.
- Cost Performance Index (CPI) = Earned Value (e.g., in the equivalent value of story points completed) / Actual costs incurred (money spent till date). A CPI less than 1 signifies that the project is over budget schedule whereas a value greater than 1 means the project is under budget.
