Great question!

Understanding how a Product Owner (PO) prioritizes backlog items based on

business value, feasibility, and complexity is crucial for effective Agile project management. Let’s
break it down in simple terms with a Trade Finance example to make it clear.

Key Concepts

1. Business Value: How much a feature benefits the business or meets customer needs.

2. Feasibility: How practical it is to implement a feature with the available resources and
technology.

3. Complexity (Story Points): The level of effort, time, and difficulty required to complete a
feature.

Step-by-Step Process

1. Understanding Business Value

Business Value refers to the importance or benefit a feature brings to the business or its customers.
High business value features are those that:

 Solve critical problems.

 Enhance customer satisfaction.

 Generate revenue.

 Ensure compliance with regulations.

Example in Trade Finance:

 Feature A: KYC (Know Your Customer) Compliance Module

o Business Value: High. It ensures the bank complies with legal regulations, avoids
fines, and mitigates risks related to money laundering.

 Feature B: Advanced Reporting Dashboard

o Business Value: Medium. It helps internal teams analyze transactions and generate
reports but isn’t critical for compliance.

2. Assessing Feasibility with the Team

Feasibility involves evaluating whether the team has the necessary resources, skills, and technology
to implement a feature effectively. This assessment is done collaboratively with the Development
Team and Scrum Master.

Example in Trade Finance:

 Feature A: KYC Compliance Module

o Feasibility: High. The team has experience with compliance systems and the
necessary tools are available.

 Feature C: Real-Time Currency Conversion API Integration

 o Feasibility: Low to Medium. Integrating with a new external API may require
additional research, new technologies, or specialized skills the team isn’t currently
proficient in.

3. Estimating Complexity (Story Points)

Story Points measure the effort required to implement a feature, considering factors like:

 The amount of work.

 The complexity of the tasks.

 Potential risks or uncertainties.

Example in Trade Finance:

 Feature A: KYC Compliance Module

o Story Points: 8 (Moderate complexity due to regulatory requirements but

manageable with existing expertise).

 Feature C: Real-Time Currency Conversion API Integration

o Story Points: 13 (High complexity due to the need for integration, testing with
external APIs, and ensuring real-time performance).

4. Prioritizing Backlog Items

The Product Owner uses both business value and complexity (story points) to prioritize the backlog.
The goal is to maximize value while considering what’s feasible within the team’s capacity.

Prioritization Techniques:

 Value vs. Effort Matrix: Plot features based on their business value and story points to
identify high-value, low-effort items.

 MoSCoW Method: Categorize features as Must have, Should have, Could have, and Won’t
have.

Example in Trade Finance:

 Feature A: KYC Compliance Module

o High Business Value, Moderate Complexity: Prioritized first because it’s essential for
compliance and the team can handle the complexity.

 Feature C: Real-Time Currency Conversion API Integration

o Low Business Value, High Complexity: Prioritized lower or deferred to future sprints
unless there’s a strong business need.

5. Sprint Planning and Execution

During Sprint Planning, the PO and the team select the highest-priority items that fit within the
team’s capacity for the sprint (e.g., 25 story points per sprint).

Example in Trade Finance:

  Sprint 1:

o Feature A: KYC Compliance Module (8 story points)

o Feature B: Advanced Reporting Dashboard (5 story points)

o Feature D: Basic Transaction Processing (7 story points)

o Total Story Points: 20 (within the team’s capacity of 25)

6. Continuous Refinement and Feedback

After each sprint, during the Sprint Review and Retrospective, the team and PO review what was
accomplished and gather feedback. This may lead to re-prioritizing the backlog based on new
insights or changing business needs.

Real-Life Example Scenario: Trade Finance System Development

Initial Backlog (20 Items):

1. KYC Compliance Module

2. AML Screening Tool

3. Basic Transaction Processing

4. Advanced Reporting Dashboard

5. CRM Integration

6. Document Management System

7. Real-Time Currency Conversion API

8. User Authentication Enhancements

9. Automated Compliance Reporting

10. Mobile Access for Trade Transactions

11. Notification System for Transactions

12. Data Encryption for Security

13. Audit Trail Feature

14. Multi-Currency Support

15. User Role Management

16. Batch Transaction Processing

17. Integration with External Payment Systems

18. Dashboard Customization

19. Historical Data Analysis

20. User Feedback Collection Tool

Prioritization and Estimation Process:

1. Prioritize Based on Business Value:

o High Value: KYC Compliance Module, AML Screening Tool, Basic Transaction
Processing

o Medium Value: Advanced Reporting Dashboard, CRM Integration, Document

Management System

o Low Value: Mobile Access, Notification System, Dashboard Customization

2. Estimate Complexity (Story Points):

o KYC Compliance Module: 8 points

o AML Screening Tool: 13 points

o Basic Transaction Processing: 5 points

o Advanced Reporting Dashboard: 5 points

o CRM Integration: 3 points

o Document Management System: 3 points

o Real-Time Currency Conversion API: 13 points

o ...and so on for other items.

3. Sprint Planning:

o Sprint 1:

 KYC Compliance Module (8 points)

 Basic Transaction Processing (5 points)

 Advanced Reporting Dashboard (5 points)

 CRM Integration (3 points)

 Total: 21 points (within the 25-point capacity)

o Sprint 2:

 AML Screening Tool (13 points)

 Document Management System (3 points)

 User Authentication Enhancements (3 points)

 Total: 19 points

o Sprint 3:

 Real-Time Currency Conversion API (13 points)

 Notification System for Transactions (3 points)

 Data Encryption for Security (3 points)

  Total: 19 points

4. Adjust Based on Team Feedback:

o If the team finds that the AML Screening Tool is too complex for one sprint, it might
be broken down into smaller tasks:

 Sprint 2A: Basic AML Screening Setup (5 points)

 Sprint 2B: Advanced AML Algorithms (8 points)

 Sprint 2C: Testing and Optimization (5 points)

Why Prioritization Matters Even in Comprehensive Projects

Even when planning to deliver a complete system, prioritization ensures that:

 Critical Features are Delivered First: Compliance features are non-negotiable and must be
prioritized to avoid legal risks.

 Risk is Managed Early: Addressing high-risk items early in the project reduces the chance of
major issues later.

 Value is Maximized: By delivering high-value features first, the business starts gaining
benefits sooner, even if some lower-priority features are still in development.

 Flexibility is Maintained: Prioritization allows the team to adapt to changing requirements or

new information without being overwhelmed by the entire scope at once.

Conclusion

As a Product Owner, your role is to ensure that the team is always working on the most valuable and
feasible features first. By prioritizing the backlog based on business value and collaborating with the
Scrum Master and Development Team for estimation, you ensure that the project progresses
smoothly and delivers maximum value incrementally. This approach not only aligns with Agile
principles but also with best practices in general project management, ensuring that critical needs
are met promptly while maintaining flexibility and efficiency.

Feel free to ask more questions or request further clarifications on any of these points!