Minimum Viable Product to deliver business value Symbiosis Centre for Information Technology - Sep '13

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

2. Agile Basics
What's the primary goal of Agile development?
1) Added value of working software
2) Delivering software every Quarter
3) Co-location of the team
4) Processes, Documentation, Contracts, and limited change

3. Agile Basics
What are the critical items to start a Scrum Project?
1) Scrum Team and Stakeholders
2) Scrum Team, Product Backlog, Scrum Master
3) Product Backlog, Scrum Team, Scrum Master, and Product Owner
4) Time, Scope, Budget, and Quality

4. Agile Basics
Sprint Burn-down charts are an efficient tracking tool because they show -
1) The estimated work remaining as the Sprint progresses
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

5. Agile Basics
Correct sequence of events in using Scrum framework is as follows
1) Release Planning, Sprint Planning, Sprint, Sprint Retrospective, Daily Scrum, and
Sprint Review
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

6. Agile Basics
When is a Product Backlog item considered complete?
1) When all defined tasks are 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

7. 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 -
1) Excitedly inform the team about the new requirement and interrupt the iteration
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

8. Agile Basics
When many Scrum Teams are working on a project, what best describes the definition of
"done"?
1) Each Team defines and uses its own.
2) Each Team uses its own but must make it clear to all other Teams
3) All teams must use the same definition
4) It depends

9. Agile Basics
Drawing a trend line from previous completed work on a release burn-down chart
indicates
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 .
2) Cost of the project.
3) When all Sprint Backlog tasks will be completed and the Scrum Team will be
released for other work
4) When the work remaining will be completed if nothing changes

10. Agile Basics – Few more!
• Anything that prevents the team from meeting their
potential
• Impediment
• Person who holds the vision for the product and is
responsible for the product backlog
• Product Owner
• The rate at which a team completes work; usually
measured in story points
• Velocity
• A session where the Team and Scrum Master reflect
on the process and make commitments to improve
• Retrospective
• A prioritized list of stories that are waiting to be
worked on
• Product
Backlog
• A very large user story that is eventually broken down
into smaller stories
• Epic

11. 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

12. Evolution of a Product

13. 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

14. Today’s Dilemma
Is this product feasible
Vs
Is this product viable
Ideas are not necessarily different

15. Most companies start with gutso…
Source: Eric Ries – Lean Startup

16. …but fail
Source: Eric Ries – Lean Startup

17. Probability of Success
P(s) = f (Business-value delivered,
End-user satisfaction,
Customer satisfaction,
Quality, Cost, Schedule, Effort)

18. 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

19. Scenario 1
Known
Scenario 2
Scenario 3
Known
UnKnown
Product
Implementation
Known
UnKnown
Waterfall
Agile
UnKnown
Agile + MVP
Source: Eric Ries – Lean Startup

20. Knowledge Types
 Product Knowledge:
 Project Knowledge:
Knowledge about WHAT will be developed
Knowledge about HOW will it be developed
Traditional
End Uncertainty (What)
High
Low
High
Means Uncertainty (How)
Low
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!
Source: Agile Estimating & Planning : Mike Cohn

21. 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

22. Can you avoid failure with
Minimum Viable Product
And increase P(s)

23. Vision – Strategy - Product
Product
Strategy
Vision

24. MVP vs MMF vs Product Backlog
High
Minimum
Marketable
Features
(MMF)
Low
Product
Backlog
(PB)
Minimum
Viable
Product
(MVP)
Start

25. Identifying MVP - Prioritizing Desirability
 Kano Model Of Customer Satisfaction
• Threshold [must have] features
• Linear features
• Exciters and delighters or unknown features

26. 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
 Projected Returns of Theme A
Quarter
Cost
New
Revenue
Incremental
Revenue
Retained
Revenue
Operational
Efficiencies
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)
Net
Cash Flow
15000
Source: Agile Estimating & Planning : Mike Cohn

27. Financial Prioritization
 Projected Cost of a Team for Theme A
Role
Salary
Fully Burdened
Cost
Burdened Cost
per Sprint
% Cost
Adjusted Cost
on Project
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
 Projected Cost of a Team
Assuming average velocity of team as 20SP, Cost per Story point is 675
Measure
Cost
Cost per story point
675
Cost per week
6,750
Cost per Sprint
13,500
Source: Agile Estimating & Planning : Mike Cohn

28. Financial Prioritization
 Projected Returns for Theme A
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)
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
 Financial Measures for Theme A
NPV (12%) = 46,341
(It can be NPV, IRR, Payback Period, Discounted Payback Period)
Source: Agile Estimating & Planning : Mike Cohn

29. 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?

30. 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.

31. Responsibility of Product Owner
Voice of the customer
Negotiates and takes tough
decision to derive business value
Define Done, Accepts or rejects
work results
Builds and Grooms the
Product Backlog
Manages stakeholders and
interests
Product Owner
Leads the development effort
by conveying his or her vision
to the team
Drives the business value

32. 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.

33. Thank you!
Archana Joshi
Sr. Manager, Cognizant
Zaheerabbas Shaukatali Contractor
Head - AgileNext, Wipro Technologies