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Project Management

Agile Product Development

The aim of an effective product development or product management process is to create products that are unique and provide more value to customers than those of the firm’s competitors. But even though companies spend large amounts of time and money on new product development (NPD), a majority of products fail after market introduction. The Product Development and Management Association (PDMA) estimates that new products use 46% of development resources (conceptualizing, developing, and launching new products) but fail 59% of the time. The Standish Group reported in 2005 that, although software companies spend an extensive amount of time planning new features for new software products, 60% of those features are rarely or never used.

There are advantages to employing Agile tools and techniques in NPD; an Agile approach can ensure that the right product features are included. While traditional product development typically tries to plan for every conceivable feature (which is futile because as teams implement plans, the features that customers want often change), Agile practices let the product evolve and allows development processes to adapt quickly, to respond to changing characteristics.

Research shows that customers have a hard time establishing product specifications. They may need to see the flaws in a product before they can figure out what features are needed. They also don’t want to wait a long time for the product to reach the market. And they don’t want to pay too much for the product—they don’t want to be charged for the “overhead” in a project or the parts of the project that don’t add value to what they are buying.

Agile development addresses these concerns by:

  • continuously incorporating new ideas, features, and functions in product increments.
  • providing a “new” product at the end of each iteration.
  • streamlining the process to eliminate waste and provide customers with products that meet their current needs.

Agile uses incremental and iterative development cycles to create new products or to modify existing products. Each Agile iteration results in something new with which customers can evaluate and interact. By developing products in increments, Agile organizations create adaptable products (that they can modify into new products at a later date), to consistently ensure that their products meet their customer’s current needs and can be modified to meet future needs. And by developing in iterations or cycles, Agile creates complete, innovative, and reliable products that can be released to the market sooner, providing an earlier return on an organization’s investment.

Customer and Stakeholder Involvement

Agile development involves customers and stakeholders early and often in the project work (rather than waiting until the end of the project to solicit their approval). Early stakeholder involvement allows teams to uncover issues quickly and to find them early in the project, when the time and effort to make adjustments is minimal. Products should evolve with the correct functions and features, not “guesses” of what the team thinks the customer wants.

Inherent in the idea of Agile development is the knowledge that the customer’s needs and wants have been properly collected and compiled. The project’s vision for what the product should be is an extremely important part of Agile projects. That vision often comes from the project’s product owner—the person who represents the customer, user, or other stakeholders; who prioritizes their requirements; and who answers questions the team may have so they can progress in the appropriate direction. The product vision may also come directly from customers, through a technique called the Voice of the Customer (VOC).

Complete Products

Products produced by Agile teams need to be done before they can be considered releasable or shippable. (They may not actually be released or shipped but they must be able to be released.) They should be “complete increments of business value,” as described by Ken Schwaber in his book, Agile Project Management with Scrum. They must have low technical debt and be adaptable or malleable—a product that is not malleable will have a short life span and any attempts to re-use or modify it in subsequent iterations will result in increased cost, effort, and time-to-market.

Applying Agile to NPD

Many software developers have turned to Agile methods for new product development (NPD) software. For example, 20-20 Technologies, a company that produces computer-aided design, sales, and manufacturing software for commercial and residential markets, used Agile techniques (including a Voice of the Customer study) to develop a new product called 20-20 Visual Impression. This software “brings 2-D pictures to life” by creating high-quality rendered pictures that let dealers show what their products would look like in an office setting.

Many non-software companies have also integrated Agile processes into their NPD process. Examples include:

  • Flexible Product Development (FPD), which allows for changes in the product being developed or in how it is developed, even relatively late in development. FPD stresses anticipation, responsiveness, and skill in delaying decisions. According to Preston G. Smith (author of Flexible Product Development: Building Agility for Changing Markets), “In general, the approach is to keep the cost of change low for as long as possible and to recognize areas that have high costs of change so that change can be avoided in them. This implies actively building and maintaining options.”
  • “Loose-tight” planning, where the product development team alternates between periods when the plan is frozen (“tight”) and periods where changes in the plan are allowed (“loose”). Boeing used a variation of this technique in developing its 777 airliner.
  • “Simultaneous execution,” where product development stages or activities that are usually executed in sequence are instead done in parallel. Honda has employed simultaneous execution in developing new cars. (Simultaneous execution adds risk to the process, especially if there is the potential for a project being canceled.)
  • “Spiral development,” where product teams quickly prototype a new product and seek customer feedback to allow for design changes.

Agile development provides an NPD option when creating high-quality products and rapidly introducing them to market are an organizational priority. Frequent Agile iterations allow products to evolve, ensuring that they meet current needs. Agile product development allows for multiple products or solutions that can meet customer needs (rather than a traditional project management approach that creates plans with one product or solution in mind). Successful products should meet the current expectations and needs of the users, not the requirements estimated and set forth in an initial plan.

Review Checkpoint

To test your understanding of the content presented in this assignment, please choose the correct answer

1. When are stakeholders involved in Agile projects?Choose only one answer below.

a. Early and often

Correct. Stakeholders are involved as early and as often as possible to ensure that their needs continue to be met.

b. Only at the product approval stage

c. Only in the planning stages

d. During the first few iterations and again at the end of the project

2. Traditional product development ________, while Agile product development ________.Choose only one answer below.

a. is an iterative process; is a linear process

b. creates plans with one solution in mind; believes multiple solutions are possible

Correct. The target of traditional product development is a single goal that is planned at the beginning of the project. Agile product development allows a solution to evolve from multiple options as the project progresses.

c. is always high in technical debt; is not affected by technical debt

d. creates plans with multiple solutions in mind; believes only one solution is possible

3. Which of the following would not provide the product vision for an Agile project?Choose only one answer below.

a. The product owner

b. The customer

c. Senior management

d. The development team

Correct. The development team determines how the vision can be achieved, but the vision is developed by people external to the team.

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