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