minimum viable product_to_deliver_business_value_v0.4

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Archana Joshi – Sr. Manager, Cognizant Zaheer Abbas Contractor – Head-AgileNext, Wipro Sep 2013 Minimum Viable Product to deliver business value Symbiosis Center for Information Technology (SCIT Pune)

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Page 1: Minimum viable product_to_deliver_business_value_v0.4

Archana Joshi – Sr. Manager, Cognizant

Zaheer Abbas Contractor – Head-AgileNext, Wipro

Sep 2013

Minimum Viable Product to deliver business value

Symbiosis Center for Information Technology (SCIT Pune)

Page 2: Minimum viable product_to_deliver_business_value_v0.4

Agile Basics

What's the primary goal of Agile development?

2) Delivering software every Quarter

3) Co-location of the team

4) Processes, Documentation, Contracts, and limited change

1) Added value of working software

Page 3: Minimum viable product_to_deliver_business_value_v0.4

Agile Basics

What are the critical items to start a Scrum Project?

2) Scrum Team, Product Backlog, Scrum Master

3) Product Backlog, Scrum Team, Scrum Master, and Product Owner

4) Time, Scope, Budget, and Quality

1) Scrum Team and Stakeholders

Page 4: Minimum viable product_to_deliver_business_value_v0.4

Agile Basics

Sprint Burn-down charts are an efficient tracking tool because they show -

2) How many Product Backlog items remain

3) How many hours have been worked by each team member.

4) How much effort has gone into the Sprint

1) The estimated work remaining as the Sprint progresses

Page 5: Minimum viable product_to_deliver_business_value_v0.4

Agile Basics

Correct sequence of events in using Scrum framework is as follows

2) Release Planning, Sprint Planning, Sprint, Daily Scrum, Sprint Review, and Sprint Retrospective

3) Sprint Planning, Release Planning, Sprint, Sprint Retrospective, Daily Scrum, and Sprint Review.

4) Release Planning, Sprint Planning, Daily Scrum, Sprint, Sprint Review, and Sprint Retrospective

1) Release Planning, Sprint Planning, Sprint, Sprint Retrospective, Daily Scrum, and Sprint Review

Page 6: Minimum viable product_to_deliver_business_value_v0.4

Agile Basics

When is a Product Backlog item considered complete?

2) When QA reports that it passes all acceptance criteria

3) When it adheres to the definition of "done".

4) At the end of the Sprint

1) When all defined tasks are complete

Page 7: Minimum viable product_to_deliver_business_value_v0.4

Agile Basics

John is the product owner for an agile project. The development team is in middle of an iteration and John notices that he has got a new user story from the business. John’s action shall be -

2) Work with the business teams and the scrum master to add the user story to the product backlog with suitable priority

3) c) Do nothing. Wait till the current iteration gets over and then work with business on understanding the requirement

1) Excitedly inform the team about the new requirement and interrupt the iteration

Page 8: Minimum viable product_to_deliver_business_value_v0.4

Agile Basics

When many Scrum Teams are working on a project, what best describes the definition of "done"?

2) Each Team uses its own but must make it clear to all other Teams

3) All teams must use the same definition

1) Each Team defines and uses its own.

4) It depends

Page 9: Minimum viable product_to_deliver_business_value_v0.4

Agile Basics

Drawing a trend line from previous completed work on a release burn-down chart indicates

2) Cost of the project.

3) When all Sprint Backlog tasks will be completed and the Scrum Team will be released for other work

1) When the project will be over if the Product Owner removes work that is equal in effort to any new work that is added .

4) When the work remaining will be completed if nothing changes

Page 10: Minimum viable product_to_deliver_business_value_v0.4

Agile Basics – Few more!

• Anything that prevents the team from meeting their potential

• Person who holds the vision for the product and is responsible for the product backlog

• The rate at which a team completes work; usually measured in story points

• A session where the Team and Scrum Master reflect on the process and make commitments to improve

• A prioritized list of stories that are waiting to be worked on

• A very large user story that is eventually broken down into smaller stories

• Impediment

• Product Owner

• Velocity

• Retrospective

• Product Backlog

• Epic

Page 11: Minimum viable product_to_deliver_business_value_v0.4

What is a Product

In marketing, a product is anything that can be offered to a market that might satisfy a want or need [Source: Wikipedia]

As a company, why do I need a Product

To deliver value to my consumer to satisfy their want so that I can make money on it

Page 12: Minimum viable product_to_deliver_business_value_v0.4

Evolution of a Product

Page 13: Minimum viable product_to_deliver_business_value_v0.4

How many features in MS Word Menu/Toolbar Name No of Items Listed ----------------------- ------------------- File menu 46, Edit menu 26, View menu 44, Insert menu 45, Format menu 31, Tools menu 52, Table menu 37, Window menu 5, Help menu 9, Standard toolbar 46, Formatting toolbar 48, AutoText toolbar 3, Control Toolbox toolbar 15, Database toolbar 10, Drawing toolbar 285, E-mail toolbar 41, Extended Formatting toolbar 10, Forms toolbar 13, Frames toolbar 7, Function Key Display toolbar 12, Ink Annotations 8, Ink Drawing and Writing toolbar 7, Japanese Greetings toolbar 7, Mail Merge toolbar 32, Outlining toolbar 22, Picture toolbar 24, Reviewing toolbar 25, Tables and Borders toolbar 36, Visual Basic toolbar 9, Web toolbar 16, Web Tools toolbar 16, Word Count toolbar 2, WordArt toolbar 10, 3-D Settings toolbar 70 Shadow Settings toolbar 48 Drawing Canvas toolbar 12 Organization Chart toolbar 21 Diagram toolbar 31 Header and Footer toolbar 18 Full Screen toolbar 1 Stop Recording toolbar 4 Microsoft toolbar 8 Print Preview toolbar 10 AutoSummarize toolbar 3 Exit Design Mode toolbar 1 Text Box toolbar 6 Refresh toolbar 2 Reading Layout toolbar 14 Compare Side by Side toolbar 3 System toolbar 6 Online Meeting toolbar 7 ================ ====

TOTAL Items 1264

Page 14: Minimum viable product_to_deliver_business_value_v0.4

Today’s Dilemma

Is this product feasible Vs

Is this product viable

Ideas are not necessarily different

Page 15: Minimum viable product_to_deliver_business_value_v0.4

Most companies start with gutso…

Source: Eric Ries – Lean Startup

Page 16: Minimum viable product_to_deliver_business_value_v0.4

…but fail

Source: Eric Ries – Lean Startup

Page 17: Minimum viable product_to_deliver_business_value_v0.4

Probability of Success

P(s) = f (Business-value delivered,

End-user satisfaction, Customer satisfaction, Quality, Cost, Schedule, Effort)

Page 18: Minimum viable product_to_deliver_business_value_v0.4

Product Life Cyle

Most crucial aspect distinguishing

success from failure

Can I as a company focus on reducing the feedback

time from the market so that I waste less money &

resources on doing something which is does not make

sense for me

Page 19: Minimum viable product_to_deliver_business_value_v0.4

Product

Implementation

Known

Known

Known

UnKnown

UnKnown

UnKnown

Waterfall Agile Agile + MVP

Scenario 1 Scenario 2 Scenario 3

Source: Eric Ries – Lean Startup

Page 20: Minimum viable product_to_deliver_business_value_v0.4

Knowledge Types

Product Knowledge:

Project Knowledge:

Knowledge about WHAT will be developed

Knowledge about HOW will it be developed

End Uncertainty cannot be Eliminated at the Outset.

Risk of building wrong product can be reduced by sharing early working features in the hands of end users!

Low

Means Uncertainty (How)

End

Un

cert

ain

ty (

Wh

at)

High Low

High Traditional

Source: Agile Estimating & Planning : Mike Cohn

Page 21: Minimum viable product_to_deliver_business_value_v0.4

What is MVP

In product development, the Minimum Viable Product (MVP) is a strategy used for fast and quantitative market

testing of a product or product feature

Characteristics: • Minimum subset of scope • Has enough tangible value • Limited User Base

Page 22: Minimum viable product_to_deliver_business_value_v0.4

Can you avoid failure with

Minimum Viable Product

And increase P(s)

Page 23: Minimum viable product_to_deliver_business_value_v0.4

Vision – Strategy - Product

Vision

Strategy

Product

Page 24: Minimum viable product_to_deliver_business_value_v0.4

MVP vs MMF vs Product Backlog

High

Low Product Backlog

(PB)

Minimum Marketable

Features (MMF)

Minimum Viable

Product (MVP)

Start

Page 25: Minimum viable product_to_deliver_business_value_v0.4

Identifying MVP - Prioritizing Desirability

Kano Model Of Customer Satisfaction

• Threshold [must have] features

• Linear features

• Exciters and delighters or unknown features

Page 26: Minimum viable product_to_deliver_business_value_v0.4

Financial Prioritization

Sources of Return On Investment:

• New Revenue: New sources of revenue with increased market share(new customers)

• Incremental Revenue: Additional revenue from existing customers • Retained Revenue: Enhancing product to retain existing customers • Operational Efficiencies: Improved in anticipation of strong growth

Quarter Cost New

Revenue

Incremental

Revenue

Retained

Revenue

Operational

Efficiencies

Net

Cash Flow

1 0(0) 0 2000(20) 0

2 2500(50) 1600(100) 2000(20) 0

3 3750(50) 5000(200) 2000(20) 7500

4 3750(50) 7500(300) 2000(20) 7500

5 7500(100) 10000(400) 4000(40) 7500

6 7500(100) 10000(400) 4000(40) 15000

Source: Agile Estimating & Planning : Mike Cohn

Projected Returns of Theme A

Page 27: Minimum viable product_to_deliver_business_value_v0.4

Financial Prioritization Projected Cost of a Team for Theme A

Role Salary Fully Burdened

Cost

Burdened Cost

per Sprint

% Cost

on Project

Adjusted Cost

per Sprint

Product Owner 50,000 75,000 2,900 100% 2,900

Developer 50,000 75,000 2,900 100% 2,900

Developer 30,000 45,000 1,700 50% 850

Analyst 40,000 60,000 2,300 100% 2,300

Tester 30,000 45,000 1,700 100% 1,700

Tester 50,000 75,000 2,900 100% 2,900

TOTAL 13,500

Source: Agile Estimating & Planning : Mike Cohn

Measure Cost

Cost per story point 675

Cost per week 6,750

Cost per Sprint 13,500

Projected Cost of a Team Assuming average velocity of team as 20SP, Cost per Story point is 675

Page 28: Minimum viable product_to_deliver_business_value_v0.4

Financial Prioritization

Quarter Cost New

Revenue

Incremental

Revenue

Retained

Revenue

Operational

Efficiencies

Net

Cash Flow

1 -87,750 0(0) 0 2,000(20) 0 -85,750

2 -20,250 2,500(50) 1,600(100) 2,000(20) 0 -14,150

3 3,750(50) 5,000(200) 2,000(20) 7,500 18,250

4 3,750(50) 7,500(300) 2,000(20) 7,500 20,750

5 7,500(100) 10,000(400) 4,000(40) 7,500 29,000

6 7,500(100) 10,000(400) 4,000(40) 7,500 29,000

7 7,500(100) 10,000(400) 4,000(40) 15,000 36,500

8 7,500(100) 10,000(400) 4,000(40) 15,000 36,500

Projected Returns for Theme A

Source: Agile Estimating & Planning : Mike Cohn

Features for desired returns to be finished in 8th sprint(16 weeks).

First quarter will be 13 of those weeks for a cost of 87,750(13 x 6,750)

Second quarter will be further 3 weeks of cost 20,250(3 x 6,750)

Financial Measures for Theme A

NPV (12%) = 46,341

(It can be NPV, IRR, Payback Period, Discounted Payback Period)

Page 29: Minimum viable product_to_deliver_business_value_v0.4

Financial Prioritization

Comparing Returns and Valuations for each Theme:

Theme Story Points Cost NPV ROI Discounted Payback

Period

Theme A 150 101,250 46,341 45% 7 quarters

Theme B 90 60,750 34,533 15% 6 quarters

Theme C 60 40,500 30,013 49% 3 quarters

Theme A has highest NPV but takes longest to earn back investment Theme C has highest ROI but and takes shortest time however is has lowest NPV Theme B has lowest rate of return

What is your decision?

Page 30: Minimum viable product_to_deliver_business_value_v0.4

Understanding Product Owner Role

Ken Schwaber writes about the product owner

• The Product Owner is the one and only person responsible for managing the Product Backlog and ensuring the value of the work the team performs. This person maintains the Product Backlog and ensures that it is visible to everyone.

• Being the product owner is no solo act. The PO is part of the Scrum team and closely collaborates with its other members.

• The PO is new, multifaceted role that unites the authority and responsibility traditionally scattered across separate roles, including the customer or sponsor, the product manager and the project manager. Its specific shape is context-sensitive.

• For commercial software, a product managers typically takes on the product owner role. For software developed in-house, a project manager or business analyst may play the role.

Page 31: Minimum viable product_to_deliver_business_value_v0.4

Responsibility of Product Owner

Product Owner

Voice of the customer

Manages stakeholders and interests

Leads the development effort by conveying his or her vision

to the team

Drives the business value Builds and Grooms the

Product Backlog

Define Done, Accepts or rejects work results

Negotiates and takes tough decision to derive business value

Page 32: Minimum viable product_to_deliver_business_value_v0.4

Characteristics of Product Owner

Visionary and Doer

• Who can envision the final product and communicate the vision

• A doer who sees the vision through to completion

Leader and Team Player

• Creates and articulate the vision, owns the vision,drives it to completion and takes decision such as should there be less functionality or adjust the release date.

• Relies on close collaboration with Scrum Team members.

Communicator and Negotiator

• Effective communication with different stakeholders including customers, users, development, marketing, sales and management.

• Represents voice of customer needs, negotiates want and need.

Empowered and Committed

• Leading the development effort to bring product to life

• Have the decision making authority – which functionality to be delivered first.

Available and Qualified

• Understanding of the customer, describe the requirements and guide the development team.

Page 33: Minimum viable product_to_deliver_business_value_v0.4

Thank you!

Archana Joshi

Sr. Manager, Cognizant

Zaheerabbas Shaukatali Contractor Head - AgileNext, Wipro Technologies