Five Dimensions Of Value That GenAI Enables for Developers — Especially Creating Option Value!

Some of you may have noticed I’ve been posting a lot about programming with coding assistants lately, and that I’ve also doing more writing in general (such as summarizing awesome podcasts and talks that I’ve watched or heard recently). These are not unrelate…
Lolita Steuber · 4 months ago · 2 minutes read


The Evolving DORA Metrics and the Power of Option Value

The DORA Metric Anomaly

The latest 2024 DORA report revealed a curious anomaly: while GenAI improved capabilities that typically enhance software delivery performance (climate for learning, fast flow, and fast feedback), stability and throughput still went down.

Explaining anomalies often leads to significant scientific breakthroughs and a better understanding of reality.

Expanding Our Field of View

My experiences with GenAI coding assistants over the past year suggest that we need to capture an entirely new dimension of value creation, especially around creating option value.

A Primer on Option Value

Option value gives you the flexibility to explore a path without committing upfront. It reduces the risk of sunk costs, expands the design space, and provides knowledge to reduce risk.

Five Dimensions of Value

  • Build Things Faster: GenAI assistants accelerate code writing.
  • Tackle More Ambitious Projects: GenAI complements developers' abilities, enabling them to create value previously out of reach.
  • Ability to Build Do Things Yourself: GenAI assistants reduce coordination costs, allowing developers to build things independently.
  • Have More Fun Doing the Work: GenAI assistants enhance job satisfaction and productivity.
  • Explore More Options: GenAI assistants expand the number of design options available, leading to better decisions.

Of these five dimensions, I believe that "creating option value" will be the most important.

Case Studies of Option Value

Modularity increases independence of action and creates massive option value, as demonstrated by the IBM System/360 project and Amazon's modularization of its infrastructure.

Thought Experiment:

  • Scenario A: One roulette wheel, choose a number before you see where the ball lands.
  • Scenario B: 100 roulette wheels, defer decision until you see where all 100 balls land.

Scenario B offers a significantly better return due to the power of perfect information.

Option Value in Software Development

A/B testing is an example of option value creation in software development. It allows us to defer decisions and maximize upside potential.

Conclusion

Option value is a critical dimension of measurement for the value of GenAI in software development. I am eager to explore this further with other researchers and practitioners.