Project Management Scope Prioritization: Exploring Risks & Values

Project Management scope prioritization is critical in Agile delivery. In Agile project management, scope items are called user stories. Stories are listed in the product backlog. A key decision that needs to be made, while delivering in an Agile manner, is to know which stories to complete first. The criteria for project management scope prioritization is based on assessing the Value and Risk of stories in the product backlog. Prioritizing at the story level is way too granular. Therefore, prioritization should happen at the functionality level.

Scope items in the product backlog can be prioritized by value or risk. Let's explore each criteria.

Image Credit (Morgue File)

Before, we proceed with explaining project management scope prioritization by value, let's first define value.

Value is the difference between the increase in sales or reduction in costs brought in by a new functionality and the cost of producing that functionality. The increase in sales or the reduction in costs are usually estimates, however, the cost of producing the new functionality can be determined more accurately. The higher the difference; the higher the value. You could prioritize all High-Value project management scope items in the product backlog and give the customer the most immediate punch.

But what if later on in the project you are developing a functionality, which has risks that impact the entire project? Even by using all the risk management tips in the world, your project would probably go through significant turbulence. Therefore, project management scope prioritization based solely on value may not be the most optimized way to prioritize scope in the product backlog.

Each project management scope item in the product backlog has an associated risk. The sources of risks could be technological, business or scheduling. Each project management scope item in the product backlog could be prioritized based on risk. In this case, you would deliver the high-risk scope items first.

Prioritizing project management scope items based only on risk might not be the best approach as you might deliver a High-Risk functionality that has very little value. Wouldn’t that be a wasted effort? This is the reason why you should follow a dual approach.

Tip: Sometimes you may be required to make decisions based on risk and value. Decision trees and expected monetary value calculations can be helpful in such cases.

As you can see, product owners should not prioritize based on a single parameter. While prioritizing, you should consider both value and risk. Always attack the high-risk, high-value functionality first and then progress to the low-risk, high-value functionality. Avoid the high-Risk, low-Value functionality until such a time that it is deemed a high-value. Apart from project management scope prioritization, a Scrum Master has several other responsibilities. Read the The Role Of a Scrum Master article for more information.

Going back to my cousin, it seems for him not having a laptop was:

* High Risk: Having his own laptop would mean he would not have to use a shared computer in the University labs.

* High Value: Through the laptop, he could easily make money to buy a motorbike.

Smart kid!