Markus Frilund
Oct 27, 2010
Posted in category: 2010 Member Articles

The Continuous Added Value mindset

Continuous added value is the art of producing business value continuously rather than in a big bang at the end of a project.

Most people agree that this sounds like a good idea and that it would bring a lot of potential benefits. But why does it still seem very hard to achieve this in practice?

I have recognized four challenging areas where a change in mindset is required.

The traditional way of thinking is that the more time you spend on defining detailed requirements in the beginning, the more certain you can be that the product will work the way you want.

In the continuous added value mindset you’ve realized that that there is really no point in trying to figure out details around a process that will not be implemented for some time anyway since it is very likely that you want something else tomorrow. Instead you think in terms of visions that can be prioritized but are broken down as late as possible, when the time comes for implementation.

Traditionally, it has been taught that if you get the supplier to sign all these detailed requirements, and in best case also gives you a fixed price, there is no risk that he will not deliver.

Eventually many companies start to realize that, two years down the line, just because the contract is perfectly fulfilled it does not mean that the product is actually useful for what it was meant for. The alternative is to leave the detailed functional scope out of the contract and instead focus on having committed individuals in a process with strict follow-up, but with the constant freedom to change direction as the world changes.

If a particular part  of the organization (market area/country/product line/business unit/etc.) is close to a “model example” of how the group wants to work, it is easy to think this unit should also be the pilot. “If the solution works for these guys, it should work for everybody”.

The problem with this approach is that you will have to develop the solution far before you will produce any real added value to a part of the organization that already have things in fairly good shape. The key is to make sure that the “developed” part of the organization is involved in the project but focus on always delivering to the “developing” parts of the organization where the added value is gained quickly.

Professional Project Managers are now days aware that continuous added value is a key focus area of modern agile software development methodologies (Like SCRUM for example).

There still  is however, a common misconception that these agile, iterative processes are only applicable for smaller software development projects. This is not true. There are today proven models for scaling this way of thinking into big programs and the steering mechanisms are just as useful in business development as well as software development.

And finally,
yes the continuous added value mindset is also applicable to ERP projects (at least to some extent) even if your supplier might still claim otherwise.

Challenge your supplier with these ideas!

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