What is value-driven delivery of projects and work?

Daniel J. Power

Project managers, team leads, and other managers are encouraged to make project decisions that result in value. "Value" may refer to monetary gain, to new capabilities, or to any valuable outcomes. Customers and stakeholders ultimately assess value. Many people place great importance and value on what they can see and touch. For example, decision support software is largely evaluated based upon the user interface that people can see and manipulate. Software is a tangible aspect of project work, as opposed to the intangible benefits of some work projects like greater productivity. Value is a measure of both tangible and intangible benefits created through the delivery of goods or services. Value is usually more than financial benefits and value is often estimated, projected or forecasted prior to starting a project.

According to Oswald (2016), "value-driven delivery is a combination of value-adding and risk-reducing activities." A project that increases customer satisfaction will also deliver value to an organization. Components of value must be commensurable, meaning components must be measurable by the same standard so that comparisons can be made.

Tangible value can be measured and is concrete. The tangible value of a work product represents the benefits that are quantifiable and measurable. Intangible value results from a belief that the system will provide important, though hard to measure benefits to the client/customer, company or organization.

Value-driven means that value is the major decision criterion in prioritizing project deliverables, requirements and user stories. The highest value items are delivered first whenever possible. Constraints may alter the prioritization, but the value should be first and foremost on the minds of team members.

Managers, stakeholders, and the project team must forecast or project cost, schedule, budget, resource requirements, technology trends and value. Forecasting the value of a project and its components helps managers decide whether a project is beneficial and should proceed or if it is better to stop the project. Each user story has a value that is based upon potential benefits and potential costs of delivering the user story. A project has the highest value when its value exceeds that of alternative uses of the resources. Some projects have a very short payback period, the amount of time needed to regain the net amount invested in it.

The product owner and team members should routinely reassess the value of items in the product backlog and prioritize the items, requirements/tasks, and user stories based on value to the client/customer. Backlog items can be added, removed, reprioritized, and redefined. In some situations, backlog items are classified in one of 3 categories as 1) meeting basic needs, 2) meeting performance needs, and 3) meeting excitement needs. Generally, those items classified as meeting basic needs have higher value and higher priority. The items that are put in a specific sprint backlog should generally be the high-value items remaining in the project or product backlog.

Delivering value to the customer is crucial. The customer is paying for the final deliverable, whether a product or service. Customers assess value both before and after delivery of the product or service. Know your customer and what the customer values. Collaborate with the customer to better understand what is valued. Business owners want a return on their investment as well.

Decision support and business analytics can deliver value and ROI, but only if analysts, developers, and managers understand value and then use delivering value as an important decision criterion in managing a project.


Oswald, M. "What is Value-Driven Delivery in the agile world?" Whizlabs, August 12, 2016 at URL

Last update: 2019-09-17 10:29
Author: Daniel Power

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