MVP: Maximizing Value While Minimizing Risk

In the Agile world, the minimum viable product (MVP) represents a departure from defining all functions and features upfront regardless of business value. The “viable” in “minimum viable product” means that MVPs must deliver business value. The scale of business value may evolve from a small number of users and features to a wider set, but business value must be delivered from the start.

Building Value Incrementally
It can be difficult for insurers to embrace the concept of the MVP. Many insurers have memories of “day one” and “day two” deliverables, where “day two” never happened. MVP approaches are intended to build value incrementally with each additional release. They are unlike traditional project approaches, wherein business value is achieved only at the end of a large, onerous, and time-consuming release.

The MVP approach has a narrow scope, short cycles, and continuous feedback to improve subsequent releases. The business value will not be as great in each release for an MVP approach, but incremental value will be obtained sooner, accelerating the realization of full business value.

The MVP is an investment in something. Organizations should define the business value they anticipate to guide the product roadmap, measure success, and provide guardrails for feature development. The optimization of business value is a critical outcome of any product that starts with an MVP. Insurers should reassess the MVP approach if it makes existing processes too complex or too manual.

Aligning Product Sponsors With Product Direction
Ensuring that product sponsors align with the MVP’s goals and objectives is key to a successful implementation. Too often, product sponsors have high hopes that the MVP will meet the bulk of their requirements. Product sponsors should be fully engaged in the MVP approach and understand the evolution of the product over time. Sponsors should be at a level high enough in the organization to support the direction and remove roadblocks.

Setting product direction is a critical step to getting the MVP off to the right start. A long-term roadmap that defines functions, features, and user groups is important to determine how to launch the MVP. Effective product roadmaps evolve functions and features in each release based on user (customer) input. Prioritizing the features and feedback that align with business value is vital for determining what goes into the next release.

Engaging a user group throughout the process helps deliver business capabilities that meet the needs and expectations of the software’s intended users. Listening to the voice of the customer is a powerful approach for prioritizing features and delivering a product that is readily adopted. Incorporating user feedback into the prioritization process encourages maximum business value.

Haste Makes Waste Unless Engaged
Releases in an MVP approach are fast-paced; a common mistake is to engage users (customers) only when the MVP is finished. Doing so means the product team has missed out on valuable feedback that they could have incorporated throughout the release and sprint process. Additionally, unengaged users may potentially hamper full adoption and acceptance of the solution. The cost and impact of not engaging users throughout the MVP lifecycle are far greater than the cost of involving them from the start.

Traditional projects often rely on fixed scope, dates, and budgets. Success is far less likely when organizations apply these concepts to an MVP. When everything about an MVP is fixed, there is little room to learn and adapt it based on user feedback. This approach also constrains the valuable discussion about business value and feature prioritization. When scope, dates, and budget are fixed, quality is often sacrificed to be “on target.”

Challenges also arise when organizations selectively use some of the concepts of an MVP. These challenges often result from a lack of understanding of the theory behind MVP-based delivery, leading teams to fall back on the use of legacy methods.

Implementing an effective MVP model can help insurers get products to market more quickly, increase the adoption of digital engagement, and limit investments in “nice to have” features that don’t yield business value. Learning from previous MVP attempts and aligning the future approach to best practices is an important step in becoming nimbler and more flexible in a dynamic environment.

This post is adapted from a larger article at Insurance Innovation Reporter. To learn more about MVP in insurance, read Novarica’s report Minimum Viable Products (MVP): Driving Maximum Business Value.

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