Many large enterprises still use the traditional waterfall methodology to develop new products because it is a linear and methodical approach that is familiar and seems logical. Each phase must be fully completed before moving on to the next: requirement analysis, design, development, testing, and implementation. While the process is designed to reduce risk, it can consume enormous amounts of time. This inefficient use of time is disadvantageous since market trends may change and new opportunities may be missed. In many ways, instead of reducing risk, the waterfall process for development can actually increase it.
For large enterprises to consistently create significant returns on new product development and build in real business value, there must be a connection between their innovation strategies and their business goals. Yet PriceWaterhouseCoopers’ 2017 Innovation Benchmark Report revealed that a significant number of large enterprises struggle to align business goals with innovation goals. Many were unable to answer basic alignment questions such as:
- What is our vision for the future – what does success look like?
- What key trends are affecting our industry and market?
- How do we plan to use innovation to address our evolving market?
Fortunately, there’s agile, a team-based methodology that emphasizes the rapid delivery of a software application in complete functional components. Rather than creating tasks and schedules, all development time is divided into phases with a defined duration– usually measured in weeks. An emphasis is placed upon maintaining these fixed-time phases, or iterations as a way to keep the project moving forward. Features are prioritized by their business value, and they are enhanced over time according to an overall plan.
What Makes Agile Methodology A Better Alternative To Waterfall Methodology
The agile methodology is a better alternative to the waterfall approach for faster, more successful product innovation and development. Agile enables teams to develop small, fully-tested, functional pieces of the product regularly. This accelerates the process and reduces the production cycle from months and years to as little as a few weeks. This kind of steady, incremental progress is simply not possible using the waterfall process. When using the waterfall process, teams work on a little bit of everything at once, and everything remains incomplete until the project is fully finished. This approach makes it virtually impossible to determine if the final product will actually deliver business value.
What makes the agile methodology so powerful is its total focus on delivering business value at every step of the development process. Risk is significantly reduced because business value is baked into every iteration. Regular development reviews confirm that value or provide input that enables the next iteration to be re-focused. This continuous feedback brings development back on track to meet expectations.
When both innovation and business goals are fully integrated, broadly promoted, and effectively communicated, a culture is created that fosters alignment of the two and provides a roadmap for new product development. The process of innovating through the lens of business goals exposes the problems customers are experiencing. It also reveals the path of least resistance to solving those problems. The result? The ability to rapidly and reliably innovate new products with demonstrable value for the marketplace.
