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Value Points (VP)

Lee, Morgan

Value points (vp) are a prioritization technique used to determine the value of an item or activity in a requirements repository or product backlog. Value points can be measured by effort, duration, size, complexity, priority, or another quantifiable, comparable, and consistent value that makes sense for your project.

A team must first create and agree on a standard value to apply to all items being evaluated, and that same value should be consistent through the lifecycle of a project. Using a consistent value is the key to making accurate project estimations.

Scenario: Project XYZ is scheduled to have five phases. Each phase is two weeks long.  The team met earlier to discuss the activities that are required to be completed for this project, how long each activity should take to complete, and the order they should be completed in. The team agreed to the work that each person was responsible for and decided on a value point system before phase one started. For this project, the team agreed that each full work day spent completing activities is worth 1 value point (e.g., 1/2 day of work = 1/2 value point, 1 day = 1 value point, 2 days = 2 value points, et cetera).

The team has 10 activities to complete for phase one. Each activity is estimated to take two days to complete so each activity is assigned two value points for total value points of 20 (10 activities x 2 vp). If the team can complete all 10 activities during phase one, they will have delivered 20 value points.  If the team missed one activity during phase one then they would have only delivered 18 value points (9 activities x 2 vp).

Note: Determine why an activity was missed. The value points for that activity may have been estimated incorrectly, or there may have been other factors involved.

Based on the work delivered  (20 value points) during the first phase, a baseline can be created for future phases.  If the value is estimated consistently, the team should be able to complete another 20 value points worth of activities in phase two. If a normal activity is worth two value points and a larger activity is estimated to take twice as long as a normal activity, then the larger activity could be given a value of 4.  In this scenario the team should be able to complete 9 activities for a total of 20 value points ((8 activities x 2 vp) + (1 activity x 4 vp)) in phase two.

If estimated correctly, the team should be able to complete 20 value points worth of activities for each project phase.  If a specific activity was incorrectly estimated, the team can adjust their current plan, add or remove resources to complete the activity, move the activity to another phase, et cetera.  During a retrospective meeting, planning activity or lessons learned session, the team should discuss and refine their value point estimates for future activities.

Value point estimation may take a few phases or projects before a team can start to make accurate estimates, but if everyone can agree on consistent values and refine those values over time, you will have a great tool to add to your BA toolkit for estimating project activities.

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