Balancing Value and Cost (Simple Matrices and Approaches)

Agile prioritization, in its simplest form, boils down to the art of balancing the value expected to be obtained from a work item with the cost (effort, time, resources) required to perform it.

We seek to maximize the return on investment of the team's limited time. To assist in this decision, especially when the choices are not obvious, simple, visual approaches such as the Value vs. Cost matrix can be used.

However, this analysis should be supplemented by considering the long-term impact versus immediate gains.

The Value vs. Cost Matrix (Low Fruit, Large Investments, Fillers, Discard)

A useful visual tool is the Value vs. Cost matrix. A 2x2 matrix is drawn, with the vertical axis representing Value (low to high) and the horizontal axis representing Cost (low to high).

Each user story or backlog item can be placed in one of four quadrants:

High-Value, Low-Cost (Low-Hanging Fruit): These are the most attractive items. They offer a high return with little effort. They have the highest priority, as they are quick wins.

High Value, High Cost (Major Investments): These require serious consideration. Although valuable, they are resource-intensive.

If you decide to tackle them, they require a firm commitment, as abandoning them midway would be a huge waste.

Low Value, Low Cost (Fillers): Items that are not critical but are easy to do.

They can be kept at the bottom of the backlog and tackled when the team has spare time or extra capacity between more important tasks.

Low Value, High Cost (Discard): These items should be removed from the backlog.

Investing significant effort for little value does not make sense. This matrix helps to quickly visualize where to focus priority effort.

Additional Considerations (Long-Term Impact vs. Short-Term Gains)

The simple Value vs. Cost matrix does not capture all the complexity. It is crucial to balance short-term gains (delivering high-value features quickly) with long-term investment.

Often, tasks related to code quality, infrastructure, technical debt remediation or innovation may not have obvious immediate value to the user (they may seem low value in the short term) but are essential to the long-term sustainability, sp