Agile (R)evolution

Anyone with a job developing or maintaining software must have heard about Agile Software Development by now. If you haven't, you have some serious catching up to do. It has swiftly won over many development teams and has promised and delivered a positive change for business developers and software developers alike.

The list of advantages compared to the old and dreaded (especially by devs) waterfall approaches is quite extensive. Customers' needs are better met through higher customer involvement and more realistic expectations, higher agility is achieved through iterative life-cycles that accommodate change, serious improvements in time-to-market are gained, improved cost control and risk management and, the list continues.

Quite frankly, if you're developing software, your first question should be: "How can we develop this product with Agile?".

Developing software without agile methods is seriously hurting your pocket and should only be done if organization restraints or conscious business decisions dictate a different approach. And by conscious I mean: you better know what you're doing for the full scale of your product ;)

Agile revolution by the people of software

The agile revolution in software wasn't cooked up by multinationals and universities but is firmly rooted in Japanese and Western proven business practices. In my view, adaptation of agile development methods snowballed incredibly fast for two particular reason: 1) job enrichment for developers and 2) shift of locus of control for end results to the developers. In this sense, the rise of agile developing methods are a "true revolution of the people": the software people.

In the "bad old days of software development", developers resided at the bottom of the development funnel. How was a software product developed? Some management guy interpreted some customer reports to some requirement analyst who gave his documents to some designer. Designer then put his documents in an envelope, seals it and mails it to the developer with a note on it: "please create the code for this abstract description of software, and , oh, please hand in the code before next Monday".

Any questions the developer might have would have to travel reverse order through the designer-analyst-manager-customer chain. Node by node. Developers never actually got to talk to customers and got treated like mine workers doing mysterious work underground. A tiresome and frustrating experience for any dev, no doubt. No wonder many software products incarnated with plenty of confusion between what was actually desired by the customer and how it ended up in compiled code. And bugs, so many bugs.

Job satisfaction = ROI

This couldn't last. Software developers are intelligent people with scarce skills and somehow they were at the bottom of some inefficient production loop. Due to some cosmic mistake they had become buffaloes of software. Workers instructed with narrow SOPs. This situation was not sustainable.

They rebelled and won. They increased their control in software end results by introducing small iterative steps executed in close co-creation and cooperation with actual customers. Personal developer visibility was regained. They won because, in the end, the trade off is a proven higher business value for software products. Who could resist a true revolution of software quality and profitability?

Many devs are energized by their new enriched position and refuse to go back to the old waterfall development funnel. And who'd want to. Everyone benefits from the new agile (r)evolution.

3 things people need in their work life

What makes people tick in their jobs? Of course, $ (or €) is important. Everyone needs to pay the rent, take care of their family and , yeah, a vacation would be nice. But money only carries you so far in your work efforts.

In his book 'Drive', Daniel Pink manoeuvres us away from the traditional money-based carrot-and-stick approach. He examines three elements of true motivation: autonomy, mastery, and purpose. The idea is so simple it hurts. Simplicity is usually at the core of great ideas.

The oblivious consumer

Last year, I talked to a small business owner (in the Netherlands) who has been primarily selling camera equipment and complementary camera goods. We've had an interesting conversation. His business is a typical Dutch mom-and-pop shop run by a single guy with a few employees. And, he basically sells the same products as the Dutch stores of Media Markt, Europe's largest retailer of consumer electronics.

Some competitor. How does this mom-and-pop shop hold up?

Quite opportunistic. The owner banks on a certain lack of price transparency for his products. In this day and age - of the super information highway and all that - consumers continue to enter his store completely oblivious to the fact that they could save 15% by walking two blocks. Not even mentioning internet search here. Sure, perhaps his customers love that shop but unlikely enough to pay his hefty prices.

He could have aimed at giving stellar service or stand out in other areas of the augmented product, but that wasn't the case as far as I could see. I can't think of any rational argument to pay his premiums. But consumers still do.

Some buyers simply refuse to search for the best price. (Online) search costs might be incredibly low but they're not interested in doing the work. This propensity could change quickly in our recent economy. Banking on the oblivious consumer does not feel like a sound and sustainable plan.

I wonder how these small shops will reinvent themselves in the coming years to survive. They can't stay oblivious to the future.

Comparing the price of apples to apples

The Internet has promised consumer goods price transparency for some time now. Although much progress has been made since the nineties and early 2000s, many consumers still buy relatively homogeneous and widely available products at a far higher price than necessary. A quick glance at a few (Dutch) price comparison sites tells us that price differences may vary up to 80% depending on retailer selection.

No doubt, price is not the only thing that defines a product and non homogeneous (as perceived by consumers)  products will be selected based on countless more factors than solely price. Say you'd compare your first diner at a restaurant with your SO; this experience could never truly compare to a similar restaurant without those connotations. Many emotional factors are deployed and, yes, you probably need food to 'survive' but restaurant visits are primarily emotional experiences. Perhaps the newly found spot is nicer, fancier, trendier, and all this in a much better value to price ratio. However, this experience can never replace these great shared memories you created with your SO.

Let's compare apples with apples.

I am talking about low involvement products that you'd definitely like to have someday, but if that day isn't this week it won't keep you up at night. Not a 'habitual' purchase either. Let's say you'd like to buy an e-reader. A great product, but you could postpone this purchase with ease.

After shortlisting, you considered several product variables like screen size, quality, storage, and its ability to process your favorite e-reader format, you made up your mind and determined the Sony PRS-350 is your winner. After running a few price queries through Google you will select a suitable retailer (based on product price, perceived retailer quality and perhaps simply proximity).

Let's zoom into the price considerations of a potential Sony e-reader buyer. Many offline and online retailers are available who sell this crafty piece of technology. Any purchaser understands he or she will buy at retailer price (+ margin) and will select a (known) retailer based on this price. Rarely, transaction costs are considered in these decisions because most of this particular price stack is invisible (in terms of awareness).

Transaction costs consist of 1) search and information costs, 2) bargaining costs and 3) enforcement costs. Enforcement costs are perhaps the least because, certainly in the Netherlands where I live, they are fixed by an extensive legal framework that is applied to any consumer instantly.

Search and Information costs + Bargaining costs are invisible costs in the price stack that are mostly overlooked, whether offline or online. Paid by most consumers in full and mostly they'll do this unaware.

Combining these search and bargaining cost factors within small and flexible consumer 'pacts' open up limitless possibilities for lower prices and great deals.