How can you prioritize user stories based on the cost of delay?

Prioritize user stories based on the cost of delay by evaluating the impact of delayed delivery on overall project objectives. Consider factors such as potential revenue loss, customer satisfaction, and strategic importance. Assign a cost of delay value to each user story, enabling the team to prioritize work that minimizes overall cost of delay and maximizes business value. This approach ensures that the most impactful stories are addressed promptly.

Cost of delay quantifies the negative impact of delaying a project or decision. It represents the financial or strategic cost incurred due to not delivering a product, service, or feature in a timely manner. This cost can include lost revenue, increased expenses, missed opportunities, and reduced customer satisfaction. Calculating the cost of delay helps leaders prioritize tasks and make more informed choices about which projects or features to work on first.

At Physicswallah, our co-founder would always say, "The future of a child is in our hands today." Similarly, in product management, the future of our product is in the stories we prioritise today. It's always Value Over Time: Sketch out the value journey of each user story over time—some sprint out of the gate while others gain worth at a marathoner's pace. Gauge their urgency and Quantify the potential gains or losses. And lastly, Lay all your stories on the table. Compare their delay costs. The ones bleeding the most value? They're your priority.

Understanding the business value and financial impact of a story or feature is crucial. Even though it may seem straightforward to define the formula and calculate the numbers, it's essential to strategically plan the scope, value, risks of not implementing it, and the opportunities it creates. You need to consider both qualitative and quantitative KPIs to make the most accurate calculation of the Cost of Delay (CoD). By doing this, you can ensure the best decisions for your project's success and financial profitability.

It's a precision tool that balances urgency with efficiency. A High CD3 scores screams 'do me first' Here's the tech breakdown: CD3 = Cost of Delay / Duration It's not just about speed; it's about smart acceleration. A user story with a high cost of delay but a long runway might still take a back seat to a quick win with immediate returns. It's a formula that would have saved my EV startup days of trial and error, aligning charging speeds with customer demand curves. In the edtech realm, where feature release can make or break a learning curve, CD3 prioritise what impacts learners today, not tomorrow. And in the volatile waves of Web-3, it's the difference between capitalizing on a trend or missing the blockchain boat.

- Cost of Delay refers to the economic impact of delaying a user story. This could be in terms of lost revenue, decreased customer satisfaction, or any other relevant metric. (Identify User Stories:List down all the user stories that need to be prioritized. Ensure that each user story is well-defined and represents a valuable piece of functionality from the user's perspective. -Estimate CoD: For each user story, estimate the potential cost of delay. Work closely with stakeholders, product owners, and subject matter experts to quantify the impact in monetary terms or other relevant metrics. (Compare CoD Across User Stories:Compare the estimated cost of delay for each user story. Identify which user stories have the highest cost of delay.

By quantifying these costs and considering them in decision-making processes, organizations can make more informed choices about which projects to prioritize, and when to expedite or delay work.

By utilizing Cost of Delay, organizations offer their teams a transparent insight into the financial consequences of their efforts. This kind of awareness can inspire team members to give priority to their tasks, enhance their collaborative efforts, and assume responsibility for their work, recognizing that their contributions directly influence the financial success and profitability of the organization. This, in turn, fosters a more enthusiastic and driven workforce, an important element for achieving project success.

In my B2B experience as part of PDI team, I realised that the relevance of the cost of delay isn't universal. For instance, in our enterprise subscription model, where clients continued to use features after release, the delay in delivering a feature wasn't tied to a one-time sale. Instead, it influenced recurring revenue. This allowed fine-tuning our solutions, avoiding hastily deploying half-baked features. Secondly, it shifted our focus towards nurturing recurring revenue rather than chasing sporadic one-time deals that appeared urgent, demanded many features, and put us in the forest calculating the short-term cost of delays. 'Delay' wasn't a roadblock; it was a calculated step ensuring sustained satisfaction and loyalty.

It is essential to ensure that the cost of delay receives only a portion of one's attention. By that, I mean that if the cost of delay takes more time and energy to plan, create, deploy, use, and improve, it will not be worth the effort. If the cost of delay becomes the focal point for the development organization, then it might lose sight of why it is there and what it is there to accomplish: good products that add value to people (who are willing to pay for them).

Beyond CD3, I think there are several key factors to weigh when prioritising user stories. Those are :- Risk, dependency, resource availability, stakeholder value, Business strategy, user impact, technical debt and the most important market trends. Agile methodology is multidimensional, it cannot be achieved by just first order thinking. We need to inculcate different mental models like the second and the third order thinking

The cost of delay is one factor to consider when prioritizing user stories. There are other considerations ranging from strategic importance to market perception to brand reputation and even to employee engagement that should also get a "seat at the prioritization table." One other thing to take into account is that sometimes we put time pressure on ourselves, and that can sometimes be "artificial." It is worth thinking about whether a user story would benefit from a deadline or whether it would benefit more greatly from getting it right. Don't let getting something done by a specific time be the end-all and be-all for a given user story.