How is Cost of Delay in SAFe calculated?

TL;DR: Poorly. Not recommended!

If you want to delve into the details, read this. (The main problems are that it uses some made up relative terms and then combines them in a way that is illogical.)

If you’ve already started using the made up relative terms that SAFe suggests, all is not lost. At least make sure you combine them in a more sensible way. (That should avoid the worst of the nonsense results.)

If Value =0, or urgency = 0, then of course, the Cost of Delay should be zero. If it’s not, you can be pretty sure you’ve combined your made-up terms in a way that doesn’t make sense. Might want to fix that!

Cost of Delay = Value x Urgency

If you haven’t started, and you’re afraid of quantifying Cost of Delay, then you could try this qualitative approach – at least to do a quick scan of options. If you’re feeling brave, you could then have a go at quantifying the Cost of Delay for a few options that you think are the highest value and urgency.

Doing that will start to show you the highly non-linear distribution of value. This doesn’t show up though until you do the slightly hard work of quantifying value and urgency.

Don’t stop there though. To get to a suggested order for your options you’re going to need to divide by the blocking time = “Duration”. That give you CD3. Here’s how that works at scale.

CD3 = Cost of Delay Divided by Duration

Hopefully that helps!

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