Information Digest – Research on tap

Recent research from Harvard Business School professor Alan MacCormack and colleagues proves a theory about software development that has been gaining adherents for some time: the best process is an evolutionary one.

Focusing on the area of Internet software development, the researchers uncovered four practices that lead to success: an early release of the evolving product design to customers, daily incorporation of new software code and rapid feedback on design changes, a team with broad-based experience of shipping multiple projects, and major investments in the design of the product architecture.

Among the development projects cited are Linux, the poster child of the open-source movement, and Internet Explorer 3.0. Commenting on the latter, a project in which Microsoft came from behind with a product equal to Netscape’s, a team member declared: “If someone asked what the most successful aspect of (Internet Explorer 3.0) was, I would say it was the job we did in componentising the product.” The new research supports componentising.

Getting a low-functionality version of the product into customers’ hands at the earliest opportunity was shown to improve quality dramatically. The research also demonstrates that although age doesn’t count, experience still does. The more projects shipped, the more capable a programmer becomes.

But in environments with rapidly changing markets and technologies, the usefulness of the evolutionary model extends beyond developing software.By dividing tasks into microprojects, a company can tailor the model to reflect any context. Traditional market research has limited value in the uncertain context of the Internet software industry, and short microprojects are called for, with an early working version for feedback on the product concept. In more mature environments, however, companies can specify more of the product design upfront, use longer microprojects and develop greater functionality before feedback is needed. Flexibility is key. Thus, an evolutionary delivery model represents a transcendent process for managing the development of all types of software, with the details tailored to reflect each project’s unique challenges.

Sloan Management Review


Browsers into buyers

The sad truth about electronic commerce is that although a website may receive millions of visitors, only about 3% actually buy anything. Consequently, the Holy Grail of e-commerce is figuring out how to turn the browsing 97% into buyers. Online retailers are making progress: the order-conversion rate increased from 1.8% to 3.2% in 1999, according to an April 2000 study by the Boston Consulting Group and

Analysts attribute that rise to improved web-site design and consumers’ increasing comfort with Internet shopping. But there’s still room for improvement. About 65% of online shopping carts are abandoned before the purchase.

The solution is not to offer pop-up discounts or promotions to every website visitor. Some have no intention of buying, and some will buy even without an extra incentive. Two professors have developed an online buyer-conversion model that distinguishes between committed browsers and potential buyers. The model is described in a new working paper, Which visits lead to purchases? Dynamic conversion behaviour at e-commerce sites, by Wendy W Moe, assistant professor of marketing at the University of Texas at Austin, and Peter S Fader, associate professor of marketing at the University of Pennsylvania’s Wharton School.

The model builds on the understanding that website visits can be valuable even if no purchase occurs. A consumer may make four or five visits to a site – researching the options and checking the terms – before feeling comfortable enough to go through the cyber checkout line.

Sloan Management Review


Strategy and the Internet

Many of the pioneers of Internet business, both dotcoms and established companies, have competed in ways that violate nearly every precept of good strategy. Rather than focus on profits, they have chased customers indiscriminately through discounting, channel incentives, and advertising.

Rather than concentrate on delivering value that earns an attractive price from customers, they have pursued indirect revenues such as advertising and click-through fees.

Rather than make trade-offs, they have rushed to offer every conceivable product or service. But it does not have to be this way. When it comes to reinforcing a distinctive strategy, Michael Porter argues, the Internet provides a better technological platform than previous generations of IT. Gaining competitive advantage does not require a radically new approach; it requires building on the proven principles of effective strategy.

Harvard Business Review


Making the most of online recruiting

Ninety percent of large US firms are already recruiting via the Internet: recruiters can locate vast numbers of qualified candidates for jobs at every level, screen them in minutes, and contact the most promising ones immediately. It costs substantially less to hire someone on-line, and the time saved is significant.

Peter Cappelli examines some of the emerging service providers and technologies. He also looks at strategies companies are adopting as they enter on-line labour markets.

Harvard Business Review

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