Design-2-cost: wie Innovations-Spinner mit Controlling-Freaks Frieden schließen
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Transcript of Design-2-cost: wie Innovations-Spinner mit Controlling-Freaks Frieden schließen
DESIGN-TO-COST: WIE INNOVATION-
SPINNER MIT CONTROLLING-FREAKS
FRIEDEN SCHLIESSEN.FRIEDEN SCHLIESSEN.“THINK BIG, START SMALL, MODIFY FAST”
DTAG, Robert Schwegler
Bonn, Darmstadt, 07.07.2015
THE 4Q MODEL: WHAT IS IT? WHERE FROM?
?
1. Optimization initiative Express48 EOY2013, 48 interviews working & mgmt level
2. 4Q Pilot: 4 projects, one cancelled
3. 4Q Steering: promoted within CFO’s Design2Cost initiative as Process Innovation
2
THE 4Q MODEL: DESIGNING AND DEVELOPING CUSTOMER’S MOST
DESIRED PRODUCTS AT OPTIMIZED COSTS.
BENEFITS
1. Guide for the product development process,
well fitting to our existing Agile approach
2. Focus: efficient and rapid development, acceleration of Time-2-Market, Feature-
management and fast customer feedback
3
3. Incorporate: Target Costing/ Design to Value principles
4. Criteria to right size investments along all phases of the product lifecycle
5. The Minimal viable product (MVP) is the starting point of the 4Q model.
DESPITE FREQUENT USE OF SYNONYMS,
THERE ARE DEMARCATIONS TO D2C AND D2V
Target Costing (TC) Design to Cost (D2C) Design to Value (D2V)
� „Design and construct products following „Design and construct products following „Design and construct products following „Design and construct products following
cost point aspects“ cost point aspects“ cost point aspects“ cost point aspects“
� „What is a product allowed to cost?“„What is a product allowed to cost?“„What is a product allowed to cost?“„What is a product allowed to cost?“ � „Design and construct products following „Design and construct products following „Design and construct products following „Design and construct products following
customer needs“customer needs“customer needs“customer needs“
4
Guiding approach: Minimal viable product (MVP)
minimal viableMVPLow-quality products, that
either don‘t work or
nobody needs
Products that well-funded
companies can afford to
create by doing a lot of
market research and R&D
A quick, but usefull product you can create,
before exhausting ressources and confidence
HIG
H
CustomerValue
NO VALUE
(BELOW THE MINIMUM VIABLE
PRODUCT
THE 4Q MODEL FOCUSES ON DESIGNING THE MVP
USING D2V / D2C PRINCIPLES FOR FURTHER INVESTMENTS
BAD VALUE/COST RATIO AREA
Details on MVP
DESIGN TO VALUE (D2V)AREA
4Q Model
� Idea: Categorizing of development and operations Categorizing of development and operations Categorizing of development and operations Categorizing of development and operations
to speed-up time-2-market
�The MVP is the starting point MVP is the starting point MVP is the starting point MVP is the starting point of the 4Q model
�All additional investments are tightly bound to
D2C/D2V following the MVP approach.
�The minimum viable product is that version of a
new product which allows a team to collect the collect the collect the collect the
maximum amount of validated learning maximum amount of validated learning maximum amount of validated learning maximum amount of validated learning about
customers with the least effortwith the least effortwith the least effortwith the least effort
�An MVP is notis notis notis not a minimal product - it is a strategy
and process directed toward making and selling a
product to customers
� It is an iterative process iterative process iterative process iterative process of idea generation,
prototyping, presentation, data collection, analysis
and learning.
LOW
PRODUCT FEATURE SET)
5
# Features
Quelle: hillerassociates.com, wikipedia
THE TELEKOM 4Q MODEL
Details on MVP
4Q MODEL: CATEGORIZING DEVELOPMENT AND OPERATIONS
TO SPEED-UP TIME-2-MARKET
Details
Q1: Q1: Q1: Q1: Teams have the option to develop agile new offers and pre-test them in small test market
Q2: Q2: Q2: Q2: Mass marketable implementation on pilot experience in Q1
Q3:Q3:Q3:Q3: Risk minimized changes on platform components
Q4: Q4: Q4: Q4: Small adjustments to customer feedback will be quickly implemented automated provided.
4Q Model
PROJECTMAINTENANCE
FR
ON
TE
ND
Low
imp
ac
t PrototypingAdaptions/
Configuration/
Customizing
6
� Efficient and rapid development
� Support of the "fail fast, fail cheap“ principle
� Acceleration of Time2Market by categorizing work
� Fast customer feedback
� Simple integration of partners (e.g. best shoring in Q2)
� Incentives for lean development (avoiding overhead, agile approach)
Targets / AdvantagesQ1Q1Q1Q1
Q2Q2Q2Q2Q3Q3Q3Q3
Q4Q4Q4Q4
FR
ON
TE
ND
B
AC
KE
ND
(Pla
tfo
rm)
Hig
h im
pa
ct Adjustments
of platformProject work
Opex Capex
4Q MODEL: CATEGORIZING DEVELOPMENT AND OPERATIONS
TO SPEED-UP TIME-2-MARKET : TRANSITIONS WITHIN 4Q
Details on transitions4Q Model
PROJECTMAINTENANCE
FR
ON
TE
ND
Low
imp
ac
t PrototypingAdaptions/
Configuration/
Customizing
1
Fail fast,
fail cheap
3
2
4 � Drop product idea� Learn about product potential with minimal investment3
� New product� Complex new function/feature
2
� Small Changes on existing products � Bug fixing1
7
Q1Q1Q1Q1
Q2Q2Q2Q2Q3Q3Q3Q3
Q4Q4Q4Q4
FR
ON
TE
ND
B
AC
KE
ND
(Pla
tfo
rm)
Hig
h im
pa
ct Adjustments
of platformProject work
Opex Capex
fail cheap
5
6
7
� Customization leads to core adjustments� Typical implementation duration per feature: days7
� Ensure high quality and implement further user requests� Typical implementation duration per feature: weeks6
� Plan further investment steps based on successful prototype� Typical implementation duration per feature: Months5
� Initial take over of parts of innovation into existing product(s)� Typical implementation duration per feature: days4
4Q MODEL: CATEGORIZING OF DEVELOPMENT AND OPERATIONS
TO SPEED-UP TIME-2-MARKET4Q Model
PROJECTMAINTENANCE
FR
ON
TE
ND
Low
imp
ac
t
� Fail cheap, fail fast!
� Fast development teams, low SLA, low
volume traffic, throw-away prototypes
� UI-driven innovation on available APIs
� Extension of server-side functionality
� Runs in agile scrum contracting mode
� Gathers requirements for heavier backend implementations
� Restricted resources (no sustained eng.)
� Pilots/prototypes need to be handed over to Q2 or be killed
� Fast customer feedback loops
� Small changes with local impact only (no cross dependencies on sub-
systems) with local & risk based testing
� High deploy frequency
� Fast & automated release cycles
� Typical changes:
� Mainly FrontEnd (UI) changes for market adaptations
� Sustained Engineering (minor changes)
� Market local extensions with configuration
8
Q1Q1Q1Q1
Q2Q2Q2Q2Q3Q3Q3Q3
Q4Q4Q4Q4
BA
CK
EN
D(P
latf
orm
)H
igh
imp
ac
t
� Pilots/prototypes need to be handed over to Q2 or be killed
� High quality implementations with input from requirements
gathered in Q1
� Some key project people will move to guide product stream
development (Q3)
� Clear contracting to multiple API users/providers and quality
pre-announced changes to them (capacity management)
� Model seamless migrations on incompatible changes between
sub-systems
� Ability to steer off-shore with running fully functional prototype
� Market local extensions with configuration
� Market local customization implemented at predefined customization
hooks resulting in direct feedback for Q3
� Sustained Engineering
� Mainly Resource Facing Systems
� Fast cycles for bug-fixes and minor adaptations avoiding
system inconsistencies
� No dependencies
� Supports enhancements
and maintenance
CONTEXT OF LIFE CYCLE, 4Q-MODEL AND DESIGN TO …
Sa
les
Time
Introduction Growth Maturity DeclineLife Cycle
Product/
Feature
4Q Focus
9
Development of a Minimal
Viable Product (MVP) with
focus on time-to-market.
Maximize variabilization of
costs along customer line.
Introduction of new features
along D2V criteria and
optimization of product
development costs.
(Profitably) Maximize Revenue.
Product lifecycle management.
Customer experience
benchmarking and continuous
monitoring of cycle.
maximize EBITDA/EBIT
… Value … Cost + Value … Cost + Value
Liquidate product
Beware of expensive ‘turn
around plans’. Deliver cash,
otherwise liquidate.
… Cost
Product
Financial
Design to …
Target Price n/a Extractable/Available Available Available
THANK YOU!