Understanding Cost of Delay (Part 3): Calculating WSJF
|Total value arising from implementing Item 1 followed by Item 2|
For more information see Essential Kanban Condensed
|Feature 1 then Feature 2|
|Feature 2 then Feature 1|
Switching the terms over in the formula above, and subtracting, gives us the difference in value realised by changing the order. Most of the terms cancel out, but we are left with the following, for the addition benefit (cost if negative) of doing item 1 before item 2.
This gives us the basis of WSJF. To maximise business value delivered by the team, we should prioritise the items which have a highest value for urgency divided by duration. The "wisjif" term may thus be expressed as:
WSJF = U / D
In the next article in this series we will look at whether the duration used in this formula should be Customer Lead Time, System Lead Time or something else. we will also consider the assumptions behind the WSJF formula. This will lead us to suggest how the formulae can be used in practice, in conjunction with delay cost profiles for different categories of items.
Read part 4 now: WSJF - Should you divide by Lead Time or by Size?
Back to part 1: Understanding Cost of Delay and its Use in Kanban