Tag Archives: niat

The Rules of Scrum: PBIs are ordered by expected Value (ROI, NIAT, etc)

Product Backlog Items are ordered into a sequence in the Product Backlog in such a way that the Product Owner is able to maximize the return on investment (ROI) in the team.  The very first PBI in the Product Backlog should be the one with the highest expected value considering the effort to build the PBI.  There are many ways to calculate this expected value including Return on Investment (ROI), Net Income After Taxes (NIAT), Net Present Value (NPV), etc.  The Scrum Team members should be free to ask why one PBI is prioritized higher than another, and the Product Owner should be able to give a reasonable answer. Since the entire Scrum Team is accountable for its work, it is in the best interest of all members of the team to use expected value, so that both the Scrum team and the customer will be committed to the work that is currently being worked on and the upcoming work in the future Sprints.  If we don’t order the PBIs by expected value, then the Product Owner is likely to prioritize them based on dates, feelings, urgency, or other less valuable methods.  These other prioritization methods will diminish the trust of the team in the Product Owner and may lead to morale problems.


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