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How is customer value viewed differently in Agile and traditional project management models

The aim of conventional projects is to deliver a product within three constraints: scope, costs and time. The focus is highly likely to fall on the delivery process itself and a project’s result will be deemed successful provided that all the constraints are met (the projects delivers everything of what it said it would, on schedule and within the agreed budget). In an Agile project, however, the focus is on creating value for the customers.

In the traditional projects it is believed that teams have no control over outcomes and value and should not be held accountable for them. As a result, they become focused only on the requirements (that are held fixed throughout the project) thus failing to deliver real business values. On the other hand, in agile setups the teams should focus on outcomes (product vision, business objectives, high-level product functionality) – everything that defines a releasable product – and on quality objectives. The other constraints (cost, time, money) still matter, but their importance comes after the values.

In essence it is the customers that define the features or the capabilities of a product, thus they are the ones defining value. The customers are also the end-users and also those evaluating the product hence, the final results will be measured against their expectations. Since the expectations can be rather abstract, intangible measures, agile project management models promote close cooperation between the development teams and the customers. In traditional models, there is hardly any interaction between them which often lead to teams delivering less value.

The activities that create value are innovation (creating new products or services, setting up new processes, reducing the development time), focus on delivery, execution and learning (not on planning, control and correction, like in traditional models). Nevertheless, agile methods encourage quick and incremental value (working product features) deliveries during the project’s life cycle, unlike traditional methods that deliver everything only at the end with  high risk of discovering major issues.  In the end, simplicity – or maximizing the amount of work not done – is another value-adding aspect of agile methodologies. The reason is that simplicity is a prerequisite of reliability, enables speed and hence reduces costs.

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What is Agile Project Management ?

In order to succeed on today’s market, the companies need to create new and innovative products, reduce the development time and customize them based on their customer’s demands. The traditional managerial practices, although highly structured and stable, do not favor innovation and are too rigid for responding quickly to the changes in the business environment. Agile project management on the other hand, is a modern approach to managerial practices that distances itself from the traditional, process-centric approaches by encouraging innovation, a shorter time-to-market and by anticipating the changes created by the customers or competitors.  

Agile project management encompasses a collection of practices, with clearly defined objectives, a set of values for the leaders and practitioners and also a life-cycle framework consisting of five stages (Envision, Speculate, Explore, Adapt and Close) . Beside this, Agile project management replaces entirely the traditional “triangle of balance” of time, cost and scope and redefines the performance measurements according to a new set of goals that reflect the Agile principles and values.

So, the agile project management practices are steered by five main objectives:

  • Continuous innovation: by replacing the authoritarian, structured environments with adaptive cultures, based on self-discipline and self-organization, agile project management will foster innovation while still fulfilling customer requirements and delivering customer value
  • Product adaptability: agile project management strives to to deliver on future client requirements by designing adaptable products
  • Improved time to market: agile project management tries to improve the time to market by employing an iterative process, focusing on the value-adding activities while eliminating waste and overhead.
  • People and process adaptability: agile management encourages learning and aims at building teams that that are comfortable to variations; the learning process is not seen as an expense but rather as an part of delivering value to the customers
  • Reliable results: agile management values reliable process over repeatable ones when aiming to deliver a valuable product to a customer

Regarding the values of agile project management – the Declaration of Interdependence and the Manifesto for Agile Software Development highlight the values for project leaders (value over constraints, teams over tasks, adapting over conforming) and developers/practitioners respectively (interaction over processes, working software over comprehensive documentation, customer collaboration over contract negotiation and responding to change over following a plan).

When it comes to the project life-cycle, the agile approach replaces the traditional Initiation, Planning, Execution and Closing phases with other five phases: Envision, Speculate, Explore, Adapt and Close. These  are more suitable for supporting a more realistic development process that evolves the product  based on the knowledge gained in time and customer’s continuous feedback.

Last, but not least, the performance measurements of an agile project change compared to the traditional one. While the traditional performance indicators were scope, cost and schedule in an agile project the indicators are value value, quality and constraints (building a releasable product, having a good enough quality and acceptable costs and time).