5.7 Assess About Value
5.7.1 Evolve the Product
Guide to Product Ownership Analysis
Value is delivered when customers use the products and services. Obsessive attention to impact creates the actual realization of value for customers. This is fundamental to recognizing customer needs, as well as how Product Owners fulfil them. The real value can be delivered through this point of impact which should be an iterative process, like a product release. Each release is an opportunity for creating value. Each release of a product targets something of value for the customer, where feedback or data-driven insights can be obtained, and the product can be further refined.
Research into what constitutes value for customers such as:
See Deliver Often for providing incremental value with quick delivery.
The learnings from the "Learn Fast" must be converted to product changes. Those product changes are incorporated through the best practices and topics described in "Deliver Often". Together, the learnings and the implementation produce a product that is valuable to the customer. The learnings need to be converted into actions and product changes. The team must consider the context that the learning must be applied to generate value.
For example:
Research into what constitutes value for customers such as:
- Discrete Options Analysis,
- Value Stream Analysis, or
- Understanding the performance of Value-Driven Metrics.
See Deliver Often for providing incremental value with quick delivery.
The learnings from the "Learn Fast" must be converted to product changes. Those product changes are incorporated through the best practices and topics described in "Deliver Often". Together, the learnings and the implementation produce a product that is valuable to the customer. The learnings need to be converted into actions and product changes. The team must consider the context that the learning must be applied to generate value.
For example:
- A certain mobile application allows the customer to purchase electronics accessories. From the value-based metrics described in Learn Fast, it was deduced that the Customer Effort Score (CES) was quite high.
- Upon further assessment of the metrics and subjective feedback from customers, the learning was that the customers usually add a lot of products to the cart, but they do not purchase the product right away.
- However, when the customer wants to purchase a single electronic accessory, they must remove the items already added to make the purchase. This increases the transaction time and friction for customers. The team has multiple options to address, such as:
- Adding an option for the customer to directly purchase an item,
- Providing an option to empty the cart in one go,
- Limiting the items that can be added to the cart.
- To choose the right option, the team needs the right analysis of the context in which value is delivered. In this example, emptying the cart may conflict with the business objective of creating more opportunities to generate revenue through cart items. The changes must be analyzed and weighed against the impact on value delivered to different stakeholders and their contexts.
- Strategic Alignment: What are the strategic decisions needed because of product/process learnings? (E.g., product changes due to competitive reasons should still be aligned with strategic direction).
- Market Alignment: What are market changes that can drive product changes?
- Regulations,
- Market trends, and
- Competition.
- Financial Viability: What are the product decisions that may result from the financial analysis that was done on the product? What are the options to consider when deciding?
Strategic alignment for a product indicates the ability of the product to deliver value to a diverse set of stakeholders through product changes, that converge with the organization's strategic objectives, including:
Practitioners use POA in assessing multiple options and features that may provide value that resonates with the business objectives. A Product Owner must assess whether the changes to the product, due to new learning, affect the enterprise objectives, and to what degree. The Product Owner is responsible for deciding whether to allow the changes. The Product Owner needs to find a convergence between the value delivered to the customer, and the value delivered to the enterprise. This is often a point of negotiation to determine the right balance.
POA Techniques for Strategic Alignment
Agile Extension Techniques
Case Study: Strategic Alignment - Insurance
- Cost,
- Revenue,
- Market share,
- Competition,
- Business model changes, etc.
- Impact of new features, or
- Entire product vision to the objective of the enterprise.
Practitioners use POA in assessing multiple options and features that may provide value that resonates with the business objectives. A Product Owner must assess whether the changes to the product, due to new learning, affect the enterprise objectives, and to what degree. The Product Owner is responsible for deciding whether to allow the changes. The Product Owner needs to find a convergence between the value delivered to the customer, and the value delivered to the enterprise. This is often a point of negotiation to determine the right balance.
POA Techniques for Strategic Alignment
Agile Extension Techniques
- Real Options: Determine when to make decisions. It is useful in determining the flow of the product backlog and the priority of PBIs against strategic measures.
- Value Stream Mapping: Provide a complete, fact-based, time-series representation of the stream of activities required to deliver a product. It can be modified to assess whether the intended value is provided, and the overall strategy is sound.
- SWOT Analysis: Assess the product and organizational strengths, weaknesses, opportunities, and threats to continually align the product.
- Balanced Scorecard: Manage performance in any business model, organizational structure, or business process. It helps with aligning backlog items to objectives.
Case Study: Strategic Alignment - Insurance
| Background Seniors’ Choice is a leading Australian Insurance company with insurance products ranging from life to non-life, with a specialized portfolio for seniors. Seniors’ Choice is rolling out a new business product that helps to make the purchasing experience more interactive for customers. Challenge After the successful launch of their new business product the HappiestYears, the company started seeing massive traffic for this software product. The standard indicators, such as Monthly Average Returns (MAR), showed an increase, and the churn rate seemed to have declined. However, customer feedback varied significantly. Some customers found the product to be quite user-friendly, but some reported it was the opposite. Action The product management group and the Product Owner, Bindi, wanted to investigate further. Bindi studied the Personas carefully to understand if the target market had been correctly represented for this product and created the Customer Journey Map to determine if the customers were facing any issues. The findings were surprising:
Bindi understood through SWOT and Balanced Scorecard that there is a need to realign the product to the main goals of the business (to serve their seniors better). Despite a clear increase in users and revenue, the product management group focused their effort on marketing and demos to the senior group. Bindi started introducing features that would integrate easy call-in service for seniors. She introduced touchpoints in the buying process where family members would have to explain to the seniors the features before confirming purchase. She also thought of adding explainer videos for most of the features to make it more tailored to seniors. The result was a slight drop in the revenue numbers, but Bindi could track that an increasing number of seniors were adopting the software product. Lessons Learned Despite doing well on most of the tangible business objectives, such as revenue and the number of users, the product needed a deep realignment to the core vision of the enterprise, which was to serve the seniors more effectively. The Product Owner was sensitive and empathetic and understood the problems that were preventing the organization from delivering value to its main segment of customers, despite taking a dip in the revenue. From the POA perspective, the use of various strategic realignment techniques, such as SWOT and Balanced Scorecard, was used to clearly indicate the problem with concrete insights from the strategic and product metrics to support the PO's decisions because of robust analysis. |
Most successful products are delivered in iterations that address the specific needs of the customers. Each iteration goes through a cycle of learning for the team, where customers express their concern or indicate whether they can derive value. Aligning continuously to the customer needs, which evolve, requires the team to nurture a value-based mindset that is obsessed with providing the right customer value, at the right time. To provide customer value, this is a continuous process of aligning the product with market forces such as:
The Product Owner uses various assessment techniques, and best practices, to understand the customers’ needs, and outline the features, that provide customer value. The most critical role of a Product Owner is to ensure that the product always delivers the right value through each iteration.
POA Techniques for Market Alignment
Agile Extension Techniques
Case Study: Market Alignment - Insurance
- Competition,
- Emerging products,
- Platforms,
- Regulations,
- Tends, and
- Changing business models.
The Product Owner uses various assessment techniques, and best practices, to understand the customers’ needs, and outline the features, that provide customer value. The most critical role of a Product Owner is to ensure that the product always delivers the right value through each iteration.
POA Techniques for Market Alignment
Agile Extension Techniques
- Minimal Viable Product: Test the notion of value delivered to customers and elicit feedback for improved customer alignment.
- Real Options: Determine when to make decisions so that the product reacts to the market conditions at the right time by managing the flow of PBIs.
- Backlog Refinement: Ensure that the next set of PBIs is representative of the customer needs or changing preferences.
- Personas: Continuously updated representation of customers to ensure that features get built into the product and provide the right experience.
- Storyboarding: Describe a task, scenario, or story in terms of how stakeholders interact with the product. This leads to deeper discovery and elicitation that helps the product embed real value.
Case Study: Market Alignment - Insurance
| Background Seniors' Choice was a leading Australian insurance company with insurance products ranging from life to non-life with a specialized portfolio for seniors. They launched a new business application, HappiestYears, which provided an array of life and non-life insurance direct purchases. Challenge HappiestYears was a successful product after a few early hick-ups concerning the strategic posture of the organization, and branding issues. Customers reported a new problem with issues addressing the needs of the First Australian communities. Bindi, the Product Owner, as well as the entire company, value diversity in the product. An immediate response was needed. Action The product management group validated that there was a market for First Australian customers as only 40% of the population currently insure their home and belongings. However, there is a significant rise in the income levels YoY. Bindi applied human-centred design for the product so that she could study the customers in their own environment and take the opportunity for the First Australian customers to co-create new business application features with the POA Practitioners. Some of the deeper insights that emerged from this engagement indicated:
Outcome Bindi considered the insights and decided to make the product more approachable by following Human-Centred Design principles, and inspiration from the team. After many rounds of discussions and iterations in prototyping, Bindi could converge on a few of these additional features.
Lessons Learned This scenario outlines how the product needs a continuous realignment to changing target market, market forces, or customer needs. Bindi stepped up and understood the problem by applying the right technique since the problem required a deeper understanding of customer behaviour and motivation. Human-centred design was a great choice to design new features co-created directly with customers. |
Financial viability indicates whether changes and features discovered from various learnings are feasible to deliver, as well as how product decisions change, by analyzing the financial aspects, such as:
Additionally, good financial analysis can help identify which proposed new features are feasible to implement.
How POA Helps Financial Viability
Effective POA supports the team and the Product Owner to understand:
BABOK® Guide Techniques
Case Study: Financial Viability - Insurance
- Price,
- ROI,
- Revenue targets,
- Development cost, and
- Implementation cost etc.
Additionally, good financial analysis can help identify which proposed new features are feasible to implement.
How POA Helps Financial Viability
Effective POA supports the team and the Product Owner to understand:
- Financial goals of the organizations, and
- Various financial objectives that are set for the product to:
- Assess whether new features or modification to the product can be met, or
- Limit the value that is delivered through the product or service.
BABOK® Guide Techniques
- Financial Analysis: Understand the financial aspects of the product with specific attributes such as cost-benefit analysis.
- Balanced Scorecard: Manage performance in any business model, organizational structure, or business process. It helps contrast financial decisions from a balanced perspective.
- Metrics and Key Performance Indicators (KPIs): Inference decisions or actions needed to course-correct using financial indicators.
Case Study: Financial Viability - Insurance
| Background Seniors' Choice was a leading Australian insurance company with insurance products ranging from life to non-life with a specialized portfolio for seniors. They launched a new business application, HappiestYears providing an array of life and non-life insurance direct purchases. Challenge HappiestYears was originally envisioned as an app-only product with a simplified interface for the customer to purchase an insurance product. However, when it was noticed that it was hard to onboard seniors to a mobile and web platform for applying for insurance, a new tele-channel was opened to support seniors' transition from a call-based application to app-based insurance applications. The launch of these features was successful, but there was an immediate flattening of the bottom line. The product team was asked to retire the feature or the product entirely if the investment became untenable. Action The product management group, along with the Product Owner, Bindi, thought about introducing new features that could be monetized to compensate for the tele-channel. However, Bindi noticed that taking a long-term view might be more appropriate. She had two observations after a thorough cost vs. benefit analysis:
After considering these observations, Bindi thought that if a single metric that showed a net positive trend over a period could be portrayed, she could convince the leadership to retain the tele-channel. She chose Internal Rate of Return (IRR). Lessons Learned This scenario outlines the importance of the financial viability of new features when they are introduced. Even if the features are deemed critical, they may be retired or repurposed if they risk the entire product based on financials. Besides, the scenario further describes that the right lens of valuing features is needed to make a case for critical features. In this example, the immediate losses can be viewed as an investment for future returns if a long-term product perspective is taken. POA Practitioners need to evaluate carefully before making decisions regarding different features from a financial perspective. |
