Enhancing Customer Satisfaction and Performance with Agile Internet Products

2. Examine effects of using agile methods for creating Internet products on customer satisfaction and firm performance • Agile methods are informal, lightweight, and fast moving management approaches for creating Internet products • Characterized by early customer involvement, flexible processes, iterative releases, and self organizing teams • Traditional methods are formal, heavyweight, and slow moving approaches for creating mainframe software • Characterized by formal project plans, rigid processes, voluminous documentation, and firm requirements • Survey 400 managers to examine the links between agile methods, customer satisfaction, and firm performance • Results may help managers better understand the business effects of using agile methods

3. Top 500 U.S. firms spend $140 billion annually on information technology • Much of the annual $400 billion U.S. defense budget is also spent on information technology • There are 250,000 information technology projects each year in the U.S. • As many as 72% (e.g., 180,000) of U.S. information technology projects fail or are failing each year • Two-thirds of U.S. information technology projects use agile methods to alleviate this high failure rate • Managers need to know whether agile methods are linked to customer satisfaction and firm performance

4. Is the use of early customer involvement for developing Internet products linked to customer satisfaction and firm performance? • Are the use of flexible processes for developing Internet products linked to customer satisfaction and firm performance? • Are the use of iterative releases for developing Internet products linked to customer satisfaction and firm performance? • Are the use of self organizing teams for developing Internet products linked to customer satisfaction and firm performance?

5. 32 major classes of software methods have emerged over the last 50 years (with hundreds of variations)

6. 12 phases, 35 documents, 62 evaluations, 17 records, 4 audits, 9 reviews, 9 baselines, and 28,978 hours

7. 20 policies, 52 procedures, 39 documents, 45 task orders, 81 records, 79 reports, 46 meetings, and 2,420 hours

8. 25 policies, 489 procedures, 478 work products, and 21,579 hours

9. 144 policy statements, 144 manual paragraphs, 51 procedures, 51 plans, 144 records, and 1,896 hours

10. Small, lightweight, closed-loop development processes • Ideal for creating Internet products and services • Consist of • Soliciting informal customer needs • Quickly translating needs into working Internet products • Releasing beta versions of products to customers • Soliciting early customer feedback • Repeating the cycle as often as necessary • Created to combat the spread of traditional methods • Ideal for powerful rapid prototyping languages such as HTML and Java

11. Early customer involvement • Business people and developers must work together daily throughout the project • Flexible processes • Changing requirements welcome late in development to harness change for the customer's advantage • Agile processes promote sustainable development, because everyone can maintain a constant pace • The highest priority is to satisfy the customer through early and continuous delivery of valuable software • Iterative releases • Deliver working software frequently, from a couple of weeks to a couple of months (the faster the better) • Working software is the primary measure of progress

12. Iterative releases • Continuous attention to technical excellence and good design enhances agility • Simplicity is the art of maximizing the amount of work not done and it is essential • Self organizing teams • Build projects around motivated individuals, provide the needed resources, and trust them to get the job done • The most efficient and effective method of conveying information to the team is face-to-face conversation • The best architectures, requirements, and designs emerge from self organizing teams • At regular intervals, teams reflect on how to become more effective and then tune and adjust their behavior

13. Extreme programming (XP) • Scrum • Dynamic systems development method (DSDM) • Crystal methods • Feature driven development (FDD) • Lean development (LD) • Adaptive software development (ASD) • Rational unified process (RUP) • Open source software development (OSSD) • Agile modeling (AM) • Pragmatic programming

14. MIT study of software methods from 1991 to 1995 • Characterized Microsoft’s synch-n-stabilize approach • Product development and testing done in parallel • Vision statement and evolving specification • Features prioritized and built in 3 or 4 milestones • Frequent synchronizations (daily operational builds) • Fixed release and ship dates and multiple releases • Continuous customer feedback in development process • Processes made large teams work like small teams • Elements of early customer involvement, flexible processes, iterative releases, and self organizing teams • Linked to customer satisfaction and firm performance

15. MIT study of software methods from 1995 to 1998 • Characterized Netscape’s Internet-time approach • Create a compelling vision of products and markets • Hire and acquire the best technical experts • Design products for multiple concurrent markets • Design modular architectures for teams to share • Design new products in parallel development • Adapt priorities to meet market and customer needs • Use internal and external beta testing to improve quality • Elements of early customer involvement, flexible processes, iterative releases, and self organizing teams • Linked to customer satisfaction and firm performance

16. Harvard study of 15 Internet firms from 1995 to 1998 • Characterized a flexible model of product development • Use of concurrent and parallel development stages • Design of product architectures resilient to change • Use of prototyping to solicit early market feedback • Use of early market feedback in beta releases • Use of beta releases to solicit more market feedback • Use of beta release feedback in product releases • Use of highly experienced Internet developers • Elements of early customer involvement, flexible processes, iterative releases, and self organizing teams • Linked to customer satisfaction and product reliability

17. Is the use of agile methods for developing Internet products linked to customer satisfaction and firm performance?

18. Antecedents of agile methods go back 50 years (e.g., trust, self organizing teams, early customer involvement, etc.)

19. Examine links between agile methods for creating Internet products, customer satisfaction, and firm performance • Design. Quantitative survey research of 400 software managers • Measures. A nine construct survey instrument with 36 items (using a five point Likert scale) • Analysis. Confirmatory factor analysis (CFA) for internal reliability and convergent validity • Results. Testing of the 16 hypotheses and construction of the final structural path model • Timeline. 12 month study to develop final proposal, collect data, and defend dissertation

20. Findings. Links between use of agile methods, customer satisfaction, and firm performance • Contributions. One of the first comprehensive empirical studies of the use of agile methods • Implications. Empirical confirmation or disconfirmation of validity of using agile methods • Limitations. May not be generalizable to all industry, organization, product, and service types • Threats to validity. Reliability and validity of research instrument, sample size, and response rate • Future research. Effects of other factors such as virtual teams, tools, groupware, culture, etc. • Recommendations. Whether or not to use or study agile methods for developing Internet products