The V-P-C Framework

 



An interesting video fairly describes it well. 

The V-P-C Framework presents distinctions between value, price and cost. As a reference to the image above, the green represents the value to customers, blue is the value to the company, and orange is the cost of producing said value/service.

Companies naturally want to increase their blue value. In an effort to do that, they may do one of several things: 
1) Decrease the value of green
2) Decrease the value of orange 
3) Increase the value of green 
4) A combination of the above choices.

While certain companies may choose to under-deliver to their customers as a result of trying to capture the optimum gain, the best answer is (4). More specifically, the company should decrease their cost of production, increase their price to customer, and also increase the benefits to customer to which the customer does not lose any value. Essentially, it is baking a bigger pie. 

So how can companies bake a bigger pie? 
1. Optimize value to customers - better features, more customer success, new products 
2. Lower costs 
3. Adjust your price model 

In the context of scrum, you could 
1. Have shorter sprints (and hence more product delivery)
2. Improve DOD
3. Frequent sprint deployment
4. Ask the customer
5. Refine backlog
6. Set sprint goal, frequent course-correct, courageous sprint retrospective, servant leadership
7. Eliminate wasteful culture and practices




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