Minimum Viable Replacement: 5 Steps to Success

1. ©2021 Kevin J Mireles 1 Are you looking to replace your existing technology, and migrate your existing systems and customers? Then take a few minutes to learn about the Minimum Viable Replacement, a new approach to replacing old products from someone who has led multimillion dollar modernization projects And wondering how to cross the chasm ?

3. 1. Applied the MVP model to replacing legacy systems 2. Thought could accurately predict the future 3. Missed key risks by focusing on averages 4. Failed to measure impact at a customer level ©2021 Kevin J Mireles 3 Why was it so painful? 1. Use the MVR framework to replace legacy systems 2. Accept uncertainty & adopt probabilistic approach to project management 3. Identify & solve for extremes 4. Quantify & integrate impact into project plans & status And what could be done differently? And these are my answers, which I’ll explain in detail to you!

11. 1 1 Minimum Viable Product • New Technology • New customers Minimum Viable Replacement • New Technology • Existing customers ©2021 KEVIN J MIRELES MVRs focus on replacing existing technology for existing customers versus

12. Minimum Viable Replacement • What’s the bare minimum I have to do do to migrate all of my existing customers to the new version and retire the old system? 12 MVPs & MVRs have different end goals Minimum Viable Product • What’s the bare minimum I need to do to get an initial slice of customers? ©2021 KEVIN J MIRELES versus

13. Minimum Viable Replacement • Will my existing customers switch from their old version to the new version? 13 MVPs have to prove their value, while MVRs have to prove they’re good enough to get customers to upgrade Minimum Viable Product • Is there a market for my product? ©2021 KEVIN J MIRELES

14. Minimum Viable Replacement • Primarily compete with your existing products 14 The biggest competitors for a minimum viable replacement are the previous versions of the product Minimum Viable Product • Compete with other companies & products ©2021 KEVIN J MIRELES

19. MVP G MVP F MVP E MVP D MVP C MVP B 19 Minimum Viable Replacement = Sum total of all the MVPs required to meet all customer needs required to transition existing customers and retire existing system Customer segment A Customer segment B Customer segment C Customer segment D Customer segment E CustomersegmentF Customer segment G Segment Revenue Opportunity Simplest to most complex Smallest to largest MVP A ©2021 KEVIN J MIRELES

20. Minimum Viable Replacement MVP G MVP F MVP E MVP D MVP C MVP B 20 Plus any additional enhancements/ inducements required to get stakeholders and customers to change and adopt new systems and processes MVP A Customer segment A Customer segment B Customer segment C Customer segment D Customer segment E CustomersegmentF Customer segment G Segment Revenue Opportunity Simplest to most complex Smallest to largest ©2021 KEVIN J MIRELES

21. Minimum Viable Replacement MVP G 1,2,3,4, 5,6,7, 8, etc. MVP F MVP E MVP D MVP C MVP B 21 And if individual customers are large enough to have customer- specific requirements, then an MVP/MVR has to be developed for each customer MVP A Customer segment A Customer segment B Customer segment C Customer segment D Customer segment E CustomersegmentF Customer segment G Segment Revenue Opportunity Simplest to most complex Smallest to largest ©2021 KEVIN J MIRELES

22. Minimum Viable Replacement MVP G 1,2,3,4, 5,6,7, 8, etc. MVP F MVP E MVP D MVP C MVP B The more customizations and changes required by internal and external stakeholders, the more difficult the migration will be 22 MVP A Customer segment A Customer segment B Customer segment C Customer segment D Customer segment E CustomersegmentF Customer segment G Segment Revenue Opportunity Simplest to most complex Smallest to largest ©2021 KEVIN J MIRELES

23. Minimum Viable Replacement MVP G MVP F MVP E MVP D MVPC MVP B MVP A 23 Since you are dealing with enterprise icebergs, where 80% of the work required is invisible, impossible to know exact requirements Customer segment A Customer segment B Customer segment C Customer segment D Customer segment E CustomersegmentF Segment Revenue Opportunity Simplest to most complex Smallest to largest Customer segment G ©2021 KEVIN J MIRELES

24. 24 While avoiding customer breakage is key, you have to balance the desire to meet your existing customers’ needs with the opportunity to serve new market segments with different functionality A Bird in the Hand? Two in the Bush Someone is always going to be unhappy, the question is who, what are the consequences and which tradeoffs are you willing to make? or ©2021 KEVIN J MIRELES

25. The Five Steps to MVR Nirvana ©2021 KEVIN J MIRELES 25 1 • Assess whether you’re dealing with an MVR or not 2 • Break your project into its constituent components • Define the segment MVPs/MVRS 3 • Identify & quantify sources of risk and opportunities • Set realistic expectations regarding risk, timelines, scope, etc. 4 • Develop & execute strategies to maximize benefits and minimize risk 5 • Iterate, iterate, and iterate some more

26. 1. Assess: Is this an MVR? Retiring legacy technology? Requires migrating existing users to new technology? Breakage is a significant risk? Common examples:  Merging and retiring existing systems post acquisition  Sunsetting a legacy product  Transitioning to a new underlying technology ©2021 Kevin J Mireles 26

27. Step 2: Decompose your project from both an execution & adoption perspective ©2021 KEVIN J MIRELES 27  • Assess whether you’re dealing with an MVR or not 2 • Break your project into its constituent components • Define the segment MVPs/MVRS 3 • Identify & quantify sources of risk and opportunities • Set realistic expectations regarding risk, timelines, scope, etc. 4 • Develop & execute strategies to maximize benefits and minimize risk 5 • Iterate, iterate, and iterate some more

28. MVP G MVP F MVP E MVP D MVP C MVP B 28 Identify your customer segments and then the capabilities/MVPs required for each customer segment Customer segment A Customer segment B Customer segment C Customer segment D Customer segment E CustomersegmentF Customer segment G Segment Revenue Opportunity Simplest to most complex Smallest to largest MVP A ©2021 KEVIN J MIRELES

29. Step 3: Identify & quantify sources of risk & opportunities ©2021 KEVIN J MIRELES 29  • Assess whether you’re dealing with an MVR or not  • Break your project into its constituent components, both from an execution and adoption perspective 3 • Identify & quantify sources of risk and opportunities • Set realistic expectations regarding risk, timelines, scope, etc. 4 • Develop & execute strategies to maximize benefits and minimize risk 5 • Iterate, iterate, and iterate some more

32. Weeks 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Tasks 1 90% 2 90% 3 90% 4 90% 5 90% 6 90% 7 90% 8 90% 9 90% 10 90% 11 90% 12 90% 13 90% 14 90% 15 90% 16 90% 17 90% 18 90% 19 90% 20 90% Probability Pop Quiz! ©2021 Kevin J Mireles 32 If you are 90% confident that each task can be completed on time & with quality, what’s the probability that the overall project will be completed on time and with the expected quality after 20 tasks?

33. Weeks 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Tasks 1 90% 2 81% 3 73% 4 66% 5 59% 6 53% 7 48% 8 43% 9 39% 10 35% 11 31% 12 28% 13 25% 14 23% 15 21% 16 19% 17 17% 18 15% 19 14% 20 12% Answer = 12% ©2021 Kevin J Mireles 33

34. ©2021 Kevin J Mireles 34 (% Probability of Success for Each Task )^(# of Variables) = Overall Probability of Success as Initially Planned (100%)^20 100% (95%)^20 36% (90%)^20 12% (80%)^20 1% (70%)^20 0% The ability to forecast the future decays exponentially making it impossible to accurately predict outcomes for projects that combine both uncertainty and complexity! Key Takeaway!

38. No, some are much, much bigger than others! ©2021 Kevin J Mireles 38 $523,964 $260,174 $1,996 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 0 200 400 600 800 1000 Rank Revenue in millions

39. Walmart is 263X larger than smallest Fortune 1,000 ©2021 Kevin J Mireles 39 $523,964 $260,174 $1,996 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 0 200 400 600 800 1000 Rank Revenue in millions

40. And 11 million times bigger than the average sole proprietorship or 13K times bigger than the largest small business ©2021 Kevin J Mireles 40 Business Size Average Revenue in millions How many times bigger Walmart is Zero Employees $ 0.046 11,390,522 1 to 4 Employees $ 0.387 1,353,912 5 to 9 Employees $ 1.000 523,964 10 to 19 Employees $ 2.164 242,128 20 to 99 Employees $ 7.124 73,549 100 to 499 Employees $ 40.775 12,850 # 1000 on Fortune 1000 $ 1,990.000 263 Walmart $ 523,964.000

41. Not only does impact tend to be hyper-concentrated, it positively correlates with complexity & uncertainty ©2021 KEVIN J MIRELES 41 48 # of Brands 24 # of Countries 1,152 Potential Permutations X = 48 # of Brands 24 # of Countries 12,000,000 Potential Permutations X = 10,500 Locations X 24 # of Countries 24 Potential Permutations =

43. The KUCI Risk Identification & Quantification model can help you avoid surprises throughout the project ©2021 Kevin J Mireles 43 Risk Identification& Quantification Uncertainty Complexity Impact Kevin’s

44. The goal isn’t to help you estimate the size of the project but to tell a truer story about the project and avoid common pitfalls ©2021 Kevin J Mireles 44 KUCI Model Identify & quantify risks Set realistic expectations Score estimate quality Assess project status Provide quantifiable & reproducible assessments

45. It provides the math and the logic to explain why most estimates, project statuses and Gannt charts are just pretty lies ©2021 Kevin J Mireles 45 From Pretty Lies • We know what needs to be done • We know how to do it • We know when it will be done • We know how much it will cost • It’s all right here on our Project Plan! To Ugly Truths We have a hypothesis!

46. Key KUCI components ©2021 Kevin J Mireles 46 Risk Uncertainty Execution How confident are you that you can deliver the solution as defined? Adoption How confident are you that the solution delivered will be adopted by your end users/customers? Complexity Variables How many variables, e.g. tasks, teams, technologies, user types, geographies etc. are involved in the project? Impact Upsides When/where in the project lifecycle/ user base are the benefits concentrated? Downsides What can go wrong? What are the potential downsides if not successful, and when/where will the impacts be concentrated?

47. Uncertainty in software projects is primarily driven by two things ©2021 KEVIN J MIRELES 47 Probability of Technical Success X Probability of Successful Customer Adoption ( ) Can you execute the work as defined? Will the dogs eat the dog food?

48. Which I’ve translated into an equation ©2021 KEVIN J MIRELES 48 Probability of Technical Success X Probability of Successful Customer Adoption ( ) % Confidence in Team X % Confidence in Technology ) ( Probability of Technical Success = % Confidence in Team = % Confidence that the team has the technical skills, resources, cohesion and subject matter expertise, etc. to successfully deliver a technically sound solution with the available technology % Confidence in Technology = % Confidence that the technology chosen has the usability, stability, flexibility, scalability, etc. to meet the project’s requirements

49. Confidence in Team Questions ©2021 KEVIN J MIRELES 49 Probability of Accurately Forecasting Success Low confidence Probability = 0-40% Medium Confidence Probability = 41%-70% High Confidence Probability = 80%-100% What is the team cohesion & performance like? New team. Struggling team. Some experience. Together <1 year Stable high-performing team How much experience does the team have with the technology? Little to none. New area software, form factor, etc Some experience but still learning Experts. Done similar projects previously How much expertise does the team have with the overall subject matter? Little to none. Doesn’t understand the business. Some experience but not experts. Experts, understand not only common use cases but exceptions as well Are separate IT ecosystems being merged? Separate ecosystems with different data models, business rules, etc. Two or more similar systems being merged Enhancing existing functionality How much experience does the team have with the specific existing systems & processes? Little to none. Never worked on app & no documentation Worked on it but not a systems expert Experts. Helped develop system. Know where are all the quirks are. How much experience does the team have with the specific users? Little to none. Many different types of users Some familiarity Worked as a user How much will the changes impact other systems or other systems impact you? High. Requires changes to dozens/unknown # Small changes No changes If interacting with other systems, how much control does team have over the other systems. Low. Need to request assistance from group with different priorities/ governance Some. Can shape other teams’ priorities but still risks High control. Complete control over dependent systems

50. Technology Confidence Questions 50 Probability of Accurately Forecasting Success Low confidence Probability = 0-40% Medium Confidence Probability = 41%-70% High Confidence Probability = 80%-100% Is the technology proven? Never at our company or to solve similar problems with similar scale, etc. Yes, In similar companies or our organization, but not in exact same manner Yes! Standard part of technology stack Has the technology been proven to scale? Never at our company or to solve similar problems with similar scale, etc. Yes, In similar companies or our organization, but not in exact same manner Absolutely! No issues. How easy is it to develop for? Don’t know. Not an easy-to- develop for/in platform. Lots of quirks & unintuitive workarounds Works reasonably well & understand quirks. Easy & developers like it! Has the technology been deployed in a customer-facing manner? No. Or Don’t know. Yes at other companies. Yes, within our company Can it be easily customized to meet our unique use cases? No. Or Don’t know. Should be able to but haven’t fully validated. Yes. How stable/bug-free is the technology? Not stable. Buggy technology. Should be fairly reliable but haven’t deployed in our org. Stable & bug free. ©2021 Kevin J Mireles

51. The second half of the equation is the probability of successful customer adoption ©2021 KEVIN J MIRELES 51 Probability of Technical Success X Probability of Successful Customer Adoption ( ) Perceived Work Required = Amount of work, e.g. additional steps, learning, change, etc. required to adopt Power, Culture & Personality Factor = The various dynamics that determine someone’s willingness to try new things, change existing habits/processes Perceived Value* - Perceived Work Required* ( +/- 10 ) Power, Culture & Personality Factor* Probability of Successful Customer Adoption = Perceived Value = Benefit customer or users expect to receive, includes expected, initial & long-term value. * Expressed as number between 1 & 10

52. Perceived Value Questions 52 Perceived Value Ranges Low Perceived Value 0 to 5 Medium Value 6 to 8 High value 9 to 10 Does the product match and exceed current capabilities of existing system critical to core users? No. Matches some but not all functionality. It’s an MVP not MVR. Yes. Matches all existing functionality Matches & exceeds all functionality Are the benefits immediately visible to the end user? No. Requires work & or training to discover functionality For the most part, but requires some level of discovery Everything is completely visible Do you have a narrowly focused target market with fairly homogenous needs & traits or a broad range of users with different needs/use cases? Target = whole world. From large to small, etc Will serve a variety of different users with a variety of use cases Laser focused on specific subset of users. Do you know who your most important customers are? No More or less. Absolutely! Know each & everyone by name, role, etc. What level of usability & value testing have you done? Testing? What’s that? Tested interactive prototype but not functional. Thoroughly tested completely usable prototype with key users Does the product save time & money or increase revenue No. No change from existing system Absolutely! Saves both time & money! How does the application impact key customer metrics Negatively impacts or no alignment to existing KPIs Somewhat, but not directly. Aligned to key goals, e.g. closing new sales. ©2021 Kevin J Mireles

53. Perceived Work-Required Questions 53 Perceived Work Required Low perceived work 0 to 5 Medium Perceived Work 6 to 8 High Perceived Work 9 to 10 Does the application eliminate the need for a person to operate the system? Completely automates the process, so no UI or operator required. No change No. Requires additional people. Does the application subtract or add work for the user? Eliminates time- consuming steps!  No change Adds work.  Does the application require training? No! Eliminates the user interface all together Some training would be good but fairly intuitive Yes! Lots & lots of repetition to get good at it but users will use it infrequently. How much work is required before get value? No work whatsoever or someone else does all the work. Some setup required but fairly straightforward. Requires not just training, but integration into other systems, massaging data, etc. before get value Does getting value require organizational & process changes? No changes whatsoever beyond eliminating steps people hated. Minor changes to process. Yes! Need to change fundamental processes, roles & Organizations in order to get benefit ©2021 Kevin J Mireles

54. Power, culture, personality & other factors: What additional factors will increase or decrease your probability of successful adoption 54 Probability of Accurately Forecasting Success Decrease confidence Subtract up to 30% Neither good nor bad No change Increase Confidence Add up to 30% Power dynamics: Who has the power in the relationship? They do! They are your largest customer & can easily switch as there are lots of competitors They need you as much as you need them • You are one of their largest customers and they can’t get paid unless they use the new software. • They’re lower-level employees with little power Culture/Personality: Does the organization culture/ users’ personalities embrace or reject change? Org has been working same way for decades & embraces tradition as core value Willing to try new things & changes when makes sense Org is always looking for new toys and embraces change as competitive advantage Regulatory or other environmental constraints Regulations or other things about the environment make adopting new systems high risk Regulations require adopting new system to comply Money: How much will it cost to make changes? Customer has to pay lots of money to adopt Customer is paid to make changes Etc. ©2021 Kevin J Mireles

55. Which you can then use to forecast your project’s overall probability of success as currently defined ©2021 KEVIN J MIRELES 55 Probability Technical Success Probability of Adoption Success Overall Probability of Success Team Confidence X Technology Confidence X Feature A 90% 90% 90% = 73% Feature B 80% 80% 80% 51% Feature C 80% 80% 80% 51% Overall Probability 58% 58% 58% 19%

57. No different than a marriage or any other journey into the unknown – where the beginning is much different than reality ©2021 KEVIN J MIRELES 57 Source: wikimedia.org Just because there’s high likelihood of failure and you know the road ahead won’t go as planned, doesn’t mean you don’t get married!

58. Step 4: Develop & execute strategies to maximize benefits & minimize risk ©2021 KEVIN J MIRELES 58  • Assess whether you’re dealing with an MVR or not  • Break your project into its constituent components, both from an execution and adoption perspective  • Identify & quantify sources of risk and opportunities • Set realistic expectations regarding risk, timelines, scope, etc. 4 • Develop & execute strategies to maximize benefits and minimize risk 5 • Iterate, iterate, and iterate some more

60. 60 Traditional UX guidelines espouse focusing on the 20% of the scenarios that meet 80% of your customer needs For an MVP, it makes sense to focus on the 20% of the capabilities that meet the needs of the majority ©2021 KEVIN J MIRELES

63. 63 Design & Architect for the 1% while delivering for the 80% first Identify the business and scalability requirements for the largest, most complex, highest- risk customers/ scenarios first. But deliver simpler solutions that meet the needs of your less complex customers first so you can deliver value to market sooner while building more complex solutions for later delivery Design 1st Build 1st Build 1st ©2021 KEVIN J MIRELES

64. 64 Or develop entirely different systems to meet the very different needs Standard designs & features for the 99% Custom solutions for the 1% Shared Infrastructure whenever possible ©2021 KEVIN J MIRELES

65. 65 While avoiding customer breakage is key, you have to balance the desire to meet your existing customers’ needs with the opportunity to serve new market segments with different functionality A Bird in the Hand? Two in the Bush Someone is always going to be unhappy, the question is who, what are the consequences and which tradeoffs are you willing to make? or ©2021 KEVIN J MIRELES

66. Step 5: Iterate, iterate and iterate some more ©2021 KEVIN J MIRELES 66  • Assess whether you’re dealing with an MVR or not  • Break your project into its constituent components, both from an execution and adoption perspective 3 • Identify & quantify sources of risk and opportunities • Set realistic expectations regarding risk, timelines, scope, etc. 4 • Develop & execute strategies to maximize benefits and minimize risk 5 • Iterate, iterate, and iterate some more

67. 67 Ultimately, successfully executing a Minimum Viable Replacement is a lot like trying to get to the other side of a mountain range without a detailed map, not impossible but much more difficult than your management expects, so good luck and god speed! – Kevin Mireles ©2021 KEVIN J MIRELES

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