All our efforts to establish Scrum can go in vain, if you do not determine what the Product is for the company. Let’s start with the definition.
The Product is something that creates a certain value for the customers as well as for the company that produces it.
The Product can be:
– physical object (chair, pie, newspaper);
– digital product (Microsoft Office, e-book or streaming video);
– service (house cleaning, consultation on profitable investment);
– idea (how to get more date invitations in the Dating app, how to make money on production waste).
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Why is it so important to understand what the Product is?
The Product specifies everything:
– institutional framework, that is, how the company will be organized — how many departments will be required, how they will interact and so on;
– the Product Owner selection;
– the number of teams that will be required to produce the Product;
– employees necessary skills.
Errors in the Product definition, will inevitably lead to problems in the future, so it is vital to make no mistake in this step.
The real Product criteria
All the products can be divided into external (market) and internal ones. We can buy external products in the store or on the site, and internal products are created inside the company to improve its performance. Each type of products has its own criteria.
Real external product:
– solves a specific problem or creates benefits for a group of users and customers, for example, Google solves the problem of Internet information search;
– has key features (functionality);
– the Product has a clear business model that brings profit. It may be direct income-you buy a licensed Microsoft Office Pack and Microsoft company receives money. Income may be indirect-a free Google Chrome browser helps to sell other Google’s products and services.
Real internal product:
– established for people who really use it;
– creates evident business benefits, for instance, the internal product “assembly line” hasten the car assemble process on Ford factories.
It is important to understand at the very beginning what Product you are doing and make sure it is real!
The Product is not the same to project
It seems like they are the same, but they are really not. Remember: the Product solves the problem and the project is only a stage of creation, implementation or advancement of the Product.
Let’s have a look at the Windows operating system. It is a Product that allows people to use the computer. Windows is periodically updated: Windows Vista followed by Windows XP, which in its turn followed by Windows 8 and Windows 10. Each system update is a new project. Windows XP and Windows 10 are projects. And the Windows operating system itself is the Product.
The Product and the project have different lifetimes. In theory, the Product can live forever, but in reality we focus on 5–10 years. The project usually lasts much less and has a clear start and end date.
The first version of Windows was created in 1993, it means the Product exists for about 25 years (a quarter of a century already). At the same time, each version of Windows existed from one to five years only.
The Product and the project have different success criteria. The project will be successful if the promised functionality is created in time and within the budget. The only one criterion of the Product success is whether it is profitable.
The “Titanic” movie was a failed project, because the crew missed all the established deadlines, exceeded the budget and finally this movie was not made as the authors have intended in the beginning. But as a product “Titanic” achieved incredible success, because it had one of the best box office in history.
Be sure to check if your Product solves the customer’s problem.
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The Product is not the same to functional improvement
It happens that any improvement is called the Product by developers. It is wrong. If something the Team is currently working on does not bring value for the customers without other parts of the system, it cannot be called the Product.
Take AliExpress, for example. It has a product search engine and although it is an important part of the store, separately the search is just the store function, but not the Product. No one comes to AliExpress just to search for something, people come there to buy cheap goods.
If a Product does not bring benefit by itself, it is not a Product.
The Product is not the same to distribution channel
Rather often, the real Product is confused with the delivery channel to the customer. Of course, in the case of bakery one will hardly allocate delivery service into a separate Product. But, the situation with intangible products is not so obvious.
Take a Bank, for instance. It has a website and a mobile app. Will the app be a separate product for the Bank? No. And a website? Also no, because the site and the app simply help clients to buy the real Bank products: loans, deposits and mortgages.
To distinguish the Product from the distribution channel, try to understand if the customer can solve his problem without it? If you delete the application, the one will still be able to make a deposit in the Bank department. So, the application is the distribution channel of the Product.
Let us underline one more time,
if a Product does not bring benefit by itself, it is not a Product.
The Product determines what your company will look like, how many people will work in it and much more. It is better to spend time and deal with it in the beginning than to fix the problems that will inevitably appear when the Product is incorrectly defined.
-The Product is something that creates a certain value for the customers as well as for the company that produces it.
-The Product specifies the institutional framework of the company, the Product Owner and employees selection and number of the teams.
– Profit is the main Product success criterion.
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