RE: Re: Responsibility

Andrey,

> "CP" == Charlie Poole wrote:
>
>  CP> Andrey,
>  DE> Though BCWP doesn't measure value in the usual sense of the word,
>  >>
>  >> So why they call it a Value?  As far as I can get it, it's an Expense.
>
>  CP> Good point. I'm reminded of the child saying "but he has no clothes!"
>
>  CP> I spent many years working under such systems of measurement
> - although
>  CP> not using these particular terms. I think the fundamental reason for
>  CP> doing this is that value is often much harder to objectify
> than expense.
>
> Well, why not use usual business planning process?  When I have to justify
> financial investment, I project a cash flow and calculate NPV.
> That's what
> I may do for waterflow project.  In Agile project I may apply options
> analysis.
>
> Yes, it's still speculations, but, at least, it's put into objective
> measure.  And one may check to what extent they became true....

It's hard - as I assume you know - to assign cash flow to certain
things. This is particularly true in IT, where it's all internal.
For example, I worked on a system many years ago that improved
the ability of staff to retrieve customer information. There was
no projection of cost savings, because we were investing money to
provide new - or better - service to customers than before.

Some manager simply decided that this service improvement was
"worth" the amount we budgeted for it. Using that logic, the
budget amount stood for the value of what we were doing and we
were tracked based on whether we accomplished it for that cost.
A _true_ analysis of value would go back and "determine" if
what we accomplished was worth what was budgeted and spent.
Most companies don't do that formally, but there are always
a lot of informal opinions of the value of any improvement.

My system was successful in the on-time/on budget sense and I'm
happy to say that the informal network seemed to believe it was
worth the effort. It was later replaced by another system, at
a higher cost which was successful on the first measure, but
reputed to be not worth it after it was done.

>  CP> Btw, I expect most top executives would understand and smile at
>  CP> your characterization of the measure as Expense rather than
>  CP> Value... even those who are doing it.
>
> Why?

I'm not sure I understand what the Why applies to, but I'll try
to answer.

What I was suggesting is that you should not believe that people
who measure expense instead of final value are simply stupid. They
may wish for a better measure of value, but they only have what
they have.

Smiling is all they believe they can do at that moment. It's black
humor of course...

Charlie Poole
[email protected]
www.pooleconsulting.com
www.charliepoole.org




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