I'm currently working for a major Crown corporation setting up a Business Analysis Center of Excellence. One of the things that I am trying to do is make the link between what's of value to the enterprise (at the portfolio level) and what's considered of value for each software project that supports the enterprise.

I've used the Business Model Canvas to analyze how the enterprise works. The enterprise is not driven purely by a profit motive because it is a Crown corporation. So, I've added "Benefits" and "Disbenefits" underneath the "Revenue Streams" and "Cost Structure" portions of the canvas to reflect the fact that the enterprise values both profitability and benefits as defined by its charter/mandate.

One would think, therefore, that "business value" would be some combination of net profitability and net benefits to the enterprise. The problem appears to be measuring them. Financial benefits (profitability) are measured in currency. Social, environmental and other benefits may be measured in a variety of other ways. At this time, the enterprise has not established KPIs, nor metrics for benefits realization management.

Since the leaders of this enterprise have not (yet) articulated a definition and way of measuring business value, I am trying to come up with an interim way of doing so at both the portfolio and project levels. This would allow the enterprise to objectively prioritize projects within their portfolio and it would allow business analysts within any given project to help their client(s) make objective decisions about prioritizing software features.

Since we develop software using an agile approach, prioritizing feature releases by business value is "mission critical", in my view, but it is not currently happening. Instead, the internal client(s) are prioritizing features (user stories in agile) without any way of measure business value or of even refering to a metric for doing so. They are going on instinct, telling the business analysts and developers "this is more important to us than this" without being able to explain why. Agile is based upon the idea that we should develop the most important things first - the ones with the greatest business value - because budget and cost are fixed. In effect, since the leaders of this enterprise have not (yet) clearly defined how to measure business value, we are unable to deliver based upon this.

Are others facing this sort of challenge? If so, what have you done (so far) to deal with it? What (if any) interim measurement strategies might work?