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)
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
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
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
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
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
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
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
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
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
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
Evolution of a Product
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
Today’s Dilemma
Is this product feasible Vs
Is this product viable
Ideas are not necessarily different
Most companies start with gutso…
Source: Eric Ries – Lean Startup
…but fail
Source: Eric Ries – Lean Startup
Probability of Success
P(s) = f (Business-value delivered,
End-user satisfaction, Customer satisfaction, Quality, Cost, Schedule, Effort)
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
Product
Implementation
Known
Known
Known
UnKnown
UnKnown
UnKnown
Waterfall Agile Agile + MVP
Scenario 1 Scenario 2 Scenario 3
Source: Eric Ries – Lean Startup
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
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
Can you avoid failure with
Minimum Viable Product
And increase P(s)
Vision – Strategy - Product
Vision
Strategy
Product
MVP vs MMF vs Product Backlog
High
Low Product Backlog
(PB)
Minimum Marketable
Features (MMF)
Minimum Viable
Product (MVP)
Start
Identifying MVP - Prioritizing Desirability
Kano Model Of Customer Satisfaction
• Threshold [must have] features
• Linear features
• Exciters and delighters or unknown features
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
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
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)
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?
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.
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
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.
Thank you!
Archana Joshi
Sr. Manager, Cognizant
Zaheerabbas Shaukatali Contractor Head - AgileNext, Wipro Technologies