1.3.2021CS-E4940 Requirements engineering

Marjo Kauppinen, Sari Kujala, Karolina Drobotowicz, and Marie Monkam Ngatcheu

Co-creation and customer value evaluation

2The focus of the session

Requirementsengineering

SOFTWARE and SERVICE ENGINEERING

Why to invest in RE?

What are the main RE activities?

What kind of good RE practices are there?

What kind of approaches are there to RE?• Engineering and agile• Customer value creation• Creative and critical thinking

How does RE link to other processes?• Solution planning• Customer value evaluation

Learning goals of the courseSOLUTION PLANNING AND DEVELOPMENT

3

Learning goals of the session

To discuss• what customer value can mean

• what co-creation with stakeholders can mean

• how customer value can be evaluated

• which practices support successful teamwork

What can customer value mean?

• Racheva et al. (2009) conducted a literature review on how business value is created in agile projects.

• According to this review, most published studies do not define what business value means.

4Racheva, Z., Daneva, M., & Sikkel, K. (2009). Value creation by agile projects: Methodology or mystery?. International Conference on Product-Focused Software Process Improvement (pp. 141-155

55

Customer value creationWhere is customer value created?

• Customer value isnot embedded in products. 1

• Products and systems are only facilitators of customer value. 1

1 Grönroos (2007, page 27)

The focus needs to beon the customers’ processes,

where value emerges for customers and is perceived by customers. 1

Value is created in customers’ processes when individual consumers or industrial users

make use of the solution. 2

2 This conclusion has been made by Christian Grönroos (2007) andit is based on the article written by Normann and Ramirez (1993).

Frominside-out approach

tooutside-in approach

6

Customer value creation

Customer value = Benefits Sacrifices-

Benefits and sacrifices can be both tangible and intangible.Quality

TimeMoney

FrustrationFears

Fun

Satisfaction

Value is created in the customers’ processes and it is perceived by customers.

Value Pyramid1

• 30 elements in 4 categories• A tool for defining value propositions

1 Almquist E, Senior J and Bloch N (2016)The Elements of Value: Measuring and delivering what consumers really wantHarvard Business Review, 94(9) 47-53

7

Anatomy of customer value

Benefits, e.g.- Fulfilled needs- Quality- Monetary worth

Sacrifices, e.g.- Price, costs- Material, time and psychologicaloverhead

Customervalue

Perceived or evaluated by the

customer

”Wha

t’s g

et”

”Wha

t’s g

iven

”

Relative oraffected by

- Expectations- Values- Competition- Relationship

Through- Usagecontext

- Over time

Figure created by Harri Töhönen based on Ravald & Grönroos (1996); Woodruff (1997), Zeithaml (1988); Payne & Holt (2001)

Analyse this figure for 5 min in teams What would you point out?

What can value co-creation with stakeholders mean?

8

Assignment 6 – Part C: RE process and co-creation

• Describe stakeholders who will be participate in the RE activities including the evaluation of customer value

• Explain co-creation practices to be used during the solution development and summarise the possible motives of stakeholders to participate in co-creation activities.

Customers, users and other stakeholders• A stakeholder is a person or organization who influences a

system’s requirements or who is impacted by that system [Glinz and Wieringa 2007].

• The role of customers, users and other stakeholders is often pretty passive in RE and co-development i.e. information provider.

• Co-creation of unique value begins by recognising that the role of customers has changed [Prahalad and Ramaswamy 2004]:

• from isolated to connected• from unaware to informed• from passive to active

9Glinz and Wieringa (2007) Stakeholders inRequirements Engineering, IEEE Software 24(2):18–20.

Prahalad and Ramaswamy (2004) Co-creating Unique Value with Customers, Strategy & Leadership 32(3):4-9.

10

The principles of user-centred design

• Early focus on users (+ direct contacts)

• Iterative design, prototyping

• Empirical measurement with real users early

in the development process

Gould, J.D. & Lewis, C. 1985. Designing for usability: Key principles and what designers think. Communications of the ACM, 28, 3, 300-311.

11

Users as a success factor

• Direct contacts to users and customers are a success factor (Keil and Carmel 1995).

• Users as an information source decreased the number of iterations (Chatzoglou and Macaulay 1996).

• Company survey (Kujala et al. 2005): In the most successful projects with lower costs, the requirements were based on information gained from users and customers.

Keil M & Carmel E (1995) Customer-developer links in software development. Communications of the ACM 38, 33–44.Chatzoglou P.C. & Macaulay L.A. (1996) Requirements capture and analysis: A survey of current practice. Requirements Engineering 1(2) 75-87.Kujala S, Kauppinen M, Lehtola L, Kojo T (2005) The role of user involvement in requirements quality and project success, Proceedings of 13th International Conference on Requirements Engineering, pp. 75–84.

12

Benefits of user-centered design

• Direct increase in productivity on the average 50%• Increased sales 25%• Decreased training costs, less time spent in learning 25%• Decreased user errors 1-5%• Increased job satisfaction,

decreased in employment change 10% and 20%• Better service quality• Decreased customer support• Increase in customer satisfaction

Kujala, S. 2003. User involvement: a review of the benefits and challenges. Behaviour & Information Technology, 22, 1, 1-16.

Involving customers and users

Assignment 4: Good RE practices for agile teamsMost of the students (94 %) proposed the involvement of customers, users or stakeholders.

Discuss in your teams for 5 min

How can users be involved in the development of digital services?

13

14

User-centred practices in RE activities

Elicitation Identifying users Describing users (persona, user profiles)Studying users (interviews, observations, workshops)Co-designing with users

Analysis andrepresentation

Developing scenarios (user stories, storyboards, use cases)Prototyping

Validation and testing

Interviewing and observingUsability testing

15

Design for all

• Follow the accessibility requirements of authorities• In Finland: https://www.saavutettavuusvaatimukset.fi/

• Extend the range of users including persons with disabilities

• Sensory• Cognitive• Physical disabilities

• http://designforall.org/design.php

16

Customers’ roles in co-creation

Tester Marketer

Support specialist

Ideagenerator

Co-Designer

Co-development

Contentprovider

Knowledgeprovider

UserConsumer

Figure created by Harri Töhönen based on Nambisan (2009) and Prahalad & Ramaswamy (2004).

Problem identifier

Experience sharer

Value co-creation

17

Motivators for co-creation

Hedonic benefits

Learning benefits

Personal integrative benefits

Social integrative benefits

Playful task

Curiosity

Altruism

Make friends

Self-efficacy

Information seeking

Skill development

Recognition

Dissatisfaction

Compensation

Intrinsic

Extrinsic

Þ more effective product usage

Þ sense of belonging-ness or social identity

Þ reputation, status, sense of self-efficacy

Þ pleasurable experiences, mental stimulation, enjoyment

Motivators byNambisan (2009)

Motivators byFüller (2010)

Figure created by Harri Töhönen based on Nambisan S (2009) and Füller J (2010).

?

How can customer value be evaluated?’

For the time being, customer value evaluation has gained little attention in practice and RE research.

18

19

RE activities

What does this mean?

Elicitation

Analysis

Representation

Validation

Requirements change management

Requirements definition

Acceptance testing

Customer value

evaluation

TestingThe purpose of unit, integration and system testing is to ensure the quality of the software.

The purpose of acceptance testing is to ensure that the software satisfies the requirements of the solution.

The purpose of customer value evaluation is to ensure that the solution satisfies customer and user needs and creates value = benefits - sacrifices.

20

Evaluating Customer Value

Starting point: It is important to analyse the current state –what are articulated and hidden needs of customers and users?

User needs refer• problems that hinder users in achieving their goals, or• opportunities to improve the likelihood of users’ achieving their goals.

Kujala 2002

Kujala S (2002) User Studies: A Practical Approach to User Involvement for Gathering User Needs and Requirements. [PhD Thesis], Helsinki University of Technology,

Understanding customers’ processes is the core of value creation.

Value is created in customers’ processes.

customer value = perceived benefits – perceived sacrifices

21

Evaluating Customer ValueAnalyzing the current state i.e. what customer and user needs are

Characteristics of users• knowledge and skills• physical properties

Goals and processes• activities (tasks) to be performed to achieve a goal

Emotions of users• expectations• attitudes and fears

Physical and social environment• special physical conditions• social interaction when using the solution

Identifying problems

and opportunities

22

Evaluating Customer Value

Which good RE practices can be used for evaluating customer value?

Analyzing the current state i.e.what customer and user needs are

Value propositions Customer value

Analyzing how well the new solutionsupports users’ goals and processes

23

Evaluating Customer Value

Analyzing the current state i.e.what customer and user needs are

Value propositions Customer value

Analyzing how well the new solutionsupports users’ goals and processes

Involving customer and users throughout RE and solution development

Interviewing and observing users intheir own environment

Iterative and incremental prototyping (paper, throw away and incremental prototypes)

Actively collecting and analyzing information about the usage of the prototypes and the solution

The same good RE practices can be applied for discovering needs, defining value propositions, and evaluating customer value.

24

Anatomy of customer value

Benefits, e.g.- Fulfilled needs- Quality- Monetary worth

Sacrifices, e.g.- Price, costs- Material, time and psychologicaloverhead

Customervalue

Perceived or evaluated by the

customer

”Wha

t’s g

et”

”Wha

t’s g

iven

”

Relative oraffected by

- Expectations- Values- Competition- Relationship

Through- Usagecontext

- Over time

Figure created by Harri Töhönen based on Ravald & Grönroos (1996), Woodruff (1997), Zeithaml (1988), Payne & Holt (2001)

Important questions:• What to evaluate• When to evaluate• How to evaluate• Where to evaluate

25

Evaluating Customer Value

During solution planning and software development, potential impacts of the solution on users, other stakeholders, and society need to considered critically.

Ethical guideline1: Consider the impact of the system beyond its users, andconsider the positive and negative consequences of the system.

1 Balasubramaniam N, Kauppinen M, Kujala S (2020) Ethical Guidelines for Solving Ethical Issues andDeveloping AI Systems, International Conference on Product-Focused Software Process Improvement, pp. 331–346,

During the usage and whole life-cycle of the solution,

actual impacts of the solution on users, other stakeholders, and society

need to be evaluated critically.

The whole life-cycle of the solution

26

Critical evaluation of solution concepts1

Customer segmentsWho are the customers and what

are their key characteristics?

Value-creation processWhat are the processes and

activities of customers?

SolutionWhat are the components of the

solution from customers’ point of view?

Value propositionsWhat are the most important

benefitsfor the customers?

TaglineWhat is the key message that summarizes the solution concept?

Stakeholder mapsPersonas

Customer journey mapsVideosThese are examples of service design techniques.

Value pyramid2

Whole solution1

1 Lehtola, Kauppinen, Vähäniitty and Komssi (2009) Linking Business and Requirements Engineering: Is Solution Planning a Missing Activity in Software Product Companies?

2 Almquist E, Senior J and Bloch N (2016)The Elements of Value: Measuring and delivering

what consumers really wantHarvard Business Review, 94(9) 47-53

Solution planning includes critical evaluation such as the analysis of sacrifices, risks, and ethical issues.

27

Elicitation

Analysis

Representation

Validation

Requirements change management

Requirements definition

Acceptance testing

Customer value

evaluation

Testing

The same good RE practices can be applied for • discovering needs• defining value propositions• evaluating customer value.

It is important to evaluate critically • solution concepts• roadmaps• features = functional and quality requirements• whole solution = digital services and other

services

Critical evaluation should also cover• risk assessment• the analysis of sacrifices and ethical issues• potential impacts of the solution on ‘

users, other stakeholders and society.

Summary: Customer value evaluation

28

Discussing in teams for 8 minutes:Which practices support successful teamwork?

29

Good teamwork practices

1. Kick-off2. Team rituals3. Team safety4. Kindness5. Expectation

management

30

Ideation

• Safety <again>• “yes, and” rule• Triggers do help! • Usual process:

– Icebreaking– 1st: put all your ideas– 2nd: group, triggers– Energizing break– 3rd: choice & validation

31

Ideation offer

• Check Miro or Mural for online brainstorming

• I can help by advising or conducting ideation.

• Contact: drobotowicz.karolina@aalto.fi

Good teamwork practices• Build trust

• Define a common goal => shared responsibility• Discuss and agree working practices• Discuss openly - inform if there are problems• Support each other• Provide constructive feedback• Do the tasks of Assignment 6 as a team or

in pairs and use peer reviews

• Learn to know each other • Informal discussions• Coffee breaks

• Use humour

32

33

References • Füller J (2010) Refining Virtual Co-Creation from a Consumer Perspective, California Management

Review 52(2):98-122.• Kujala S (2002) User Studies: A Practical Approach to User Involvement for Gathering User Needs

and Requirements. [PhD Thesis], Helsinki University of Technology.• Nambisan (2009) Virtual Customer Environments: IT-Enabled Customer Co-innovation and Value Co-

creation” in Nambisan (eds.) Information Technology and Product Development, Annals of Information Systems. Springer, pp. 109-127.

• Payne A and Holt S (2001) Diagnosing Customer Value: Integrating the Value Process and Relationship Marketing, British Journal of Management 12(2):159–82.

• Prahalad C and Ramaswamy V (2004) Co-creation Experiences: The next practice in value creation, Journal of Interactive Marketing 18 (3):5-14.

• Ravald A and Grönroos G (1996) The value concept and relationship marketing. European Journal of Marketing 30(2):19–30.

• Woodruff R (1997) Customer value: The next source for competitive advantage, Journal of the Academy of Marketing Science 25 (2):139-153.

• Zeithaml V (1988) Consumer Perceptions of Price, Quality, and Value: A Means-End Model and Synthesis of Evidence, Journal of Marketing 52(3): 2-22.