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

In 2017, I wrote on this topic link and today I am writing again with some more details.

So what is Customer value?

Customer value is the perceived value that a customer derives from a product or service, relative to the price that they pay for it. It is a measure of how much value a customer places on the benefits and features that a product or service offers. Customer value is an important concept in marketing because it helps businesses to understand what their customers value and to tailor their products and services accordingly.

"Customer value is not a simple, one-dimensional concept. It is a complex, multifaceted idea that depends on a customer's perceptions and expectations, as well as the actual benefits and costs associated with a product or service." - V. Kumar and W. Reinartz, "Customer Relationship Management"

In traditional project management models, customer value is often viewed as the value that a product or service delivers to a customer. This value is typically defined at the beginning of the project and is used to guide the development process. The goal is to deliver a product or service that meets the needs and expectations of the customer as closely as possible.

In Agile project management, customer value is viewed differently. In Agile, customer value is viewed as the primary driver of the development process. Instead of trying to deliver a predetermined set of features and functionality, Agile teams focus on delivering the highest value to the customer as quickly as possible. This is achieved through a process of continuous iteration and feedback, where the team works closely with the customer to identify and prioritize the most valuable features and deliver them in small increments.

Overall, the main difference between the traditional and Agile approaches to customer value is that in Agile, customer value is viewed as a dynamic and evolving concept that is continuously refined and prioritized throughout the development process, rather than a static set of requirements that are defined upfront.

Let's take an example of how customer value might be viewed differently in a traditional project management model versus an Agile model

Traditional Project Management:

A traditional project management team is working on developing a new customer relationship management (CRM) software for a company. At the beginning of the project, the team works with the customer to define the requirements for the software. These requirements include specific features and functionality that the customer has requested, such as the ability to track sales leads, manage customer data, and generate reports. The team then works to develop the software according to these requirements, with the goal of delivering a product that meets the needs and expectations of the customer as closely as possible.

Agile Project Management:

An Agile project management team is also working on developing a CRM software for a company. However, instead of defining all of the requirements upfront, the team works with the customer to identify the most valuable features and deliver them in small increments. The team holds regular meetings with the customer to gather feedback and adjust the development plan as needed. For example, the team might start by developing a basic version of the software that includes the ability to track sales leads and manage customer data. After gathering feedback from the customer, the team might prioritize additional features such as the ability to generate reports and integrate with other systems. This iterative approach allows the team to continuously refine the software and deliver the highest value to the customer as quickly as possible

There are several benefits to viewing customer value differently in Agile project management compared to traditional models

???"The key to customer value is identifying and delivering on the promises that matter most to your customers." - Chip Bell, "Managing Knock Your Socks Off Service"

1.????Faster delivery of value: In Agile, value is delivered to the customer in small increments, rather than waiting until the end of the project to deliver a complete product. This allows the customer to start receiving value from the product or service sooner.

2.????Greater flexibility: In Agile, the development process is more flexible and adaptable to change. This allows the team to respond to changing customer needs and priorities more quickly, rather than being tied to a rigid plan.

3.????Improved customer satisfaction: By working closely with the customer and delivering value incrementally, Agile teams can better understand and address the needs and preferences of the customer. This can lead to higher levels of customer satisfaction.

4.????Increased efficiency: In Agile, teams focus on delivering the most valuable features first and minimizing waste. This can lead to a more efficient development process and a better return on investment for the customer.

5.????Improved team morale: By focusing on delivering value and working closely with the customer, Agile teams can often experience greater job satisfaction and higher levels of team morale.

Reading Recommendations:

There are many resources available that provide more information on the differences between traditional and Agile project management approaches to customer value. Here are a few references that you may find helpful:

1.????The Agile Manifesto: This is a set of guiding principles for Agile software development. It emphasizes the importance of delivering value to the customer and adapting to change. You can read the Agile Manifesto at: https://agilemanifesto.org/

2.????The Agile Principles: These are a set of 12 principles that guide Agile development. They emphasize the importance of customer collaboration and delivering value incrementally. You can read the Agile Principles at: https://agilemanifesto.org/principles.html

3.????"Agile Project Management: Creating Innovative Products" by Jim Highsmith: This book provides a comprehensive overview of Agile project management and how it differs from traditional approaches. It covers the principles and practices of Agile development and how they can be used to deliver value to customers.

4.????"Agile Project Management: The Complete Guide" by Eduardo Alexandre: This book provides a detailed introduction to Agile project management and how it can be used to deliver value to customers. It covers the principles, practices, and tools of Agile development and provides guidance on how to implement Agile in your organization.

5.????"The Lean Startup" by Eric Ries: This book introduces the concept of the "minimum viable product (MVP)" which is the minimum set of features that a product or service needs in order to be viable and deliver value to the customer. It discusses how to use this concept to develop products and services in an Agile manner