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Kano Model of Satisfaction

The Kano model, developed by Professor Noriaki Kano, which strives to fulfil requirements and please customers.

This model features few components:

  • Dissatisfiers are things the product must NOT include

  • Satisfiers include requirements where the more you have the better the product is perceived. Like a marketing checklist, each feature adds incremental value

  • Delighters take the product beyond simply meeting the requirements to boosting customer satisfaction and recommendation

Time Value of Money

Time Value of Money concept is one of the most essential concepts of agile dealing with the time line and finances of an agile project. Time Value of money is used to perform cost-benefit analysis by agile team during the project work. It is known to all that money loses value over time. A certain amount of money now is more value than the same amount of money in future. Basic Terminologies used to perform Cost-benefit Analysis.

Present Value : Present value is the current “worth” of a certain sum of money that changes its value in future.

Future Value : It is a sum of money predicted to be available at a particular time in the future. It is the predicted value of money for future.

Period : Period is the time period of interest including years, months or weeks.

Interest Rate : It is the rate charged by the lender to the borrower against the borrowed sum of money. Interest rate is generally expressed in percentage form per annum.

Calculating the Present Value

Present Value (PV) = FV/ (1+i) ^n where i is rate and n is number of years.

For example, if you are to receive $1000 in two years and the effective annual interest rate during this period is 10% (or 0.10), then the present value of this amount is

PV= 1000/ (1+.10) ^2 = $826.44

Future Value = PV * (1 + i) ^ n

Another example where $100 is invested on 10% interest rate per year for two years

Here future value is = 100*(1+.10) ^2 = $121.1

Return on Investment

Return on investment (ROI) is a calculation of the increased profits yielded by a project, weighed against the costs of conducting and supporting the project. The ROI calculation is flexible and can be manipulated for different uses. A company may use the calculation to compare the ROI on different potential investments, while an investor could use it to calculate a return on a stock. It is calculated as Return on Investment (%) = Net profit ($) / Investment ($) × 100

For example:

An investor buys $1,000 worth of stocks and sells the shares two years later for $1,400. The net profit from the investment would be $200 and the ROI would be calculated as follows:

ROI % = (400 / 1,000) x

100 = 40%

ROI is one of the most used profitability ratios because of its flexibility.

That being said, one of the downsides of the ROI calculation is that it can be manipulated, so results may vary between users. When using ROI to compare investments, it's important to use the same inputs to get an accurate comparison. NPV, IRR, Payback

NPV is the difference between an investment's market value and its cost. Essentially, NPV measures how much value is created or added by undertaking an investment. Only investments with a positive NPV should be further considered for investing.