The cross-functional agile team playbook

How to avoid waterfall mishaps and build successful product teams

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The status quo doesn’t work

Waterfall stems from early assembly-line principles that use sequential, non-iterative assembly tactics. Each discipline that participates in the project operates independently. For example, analysts work independently from developers, and developers work independently from designers. Each group takes a turn building the deliverable and then passing it to the next team.  

The practice received a lot of attention and widespread adoption once the Department of Defense formalized its approach to creating software through the military standard DOD-STD-2167. The waterfall practice is attractive because, at least in theory, it allows the business to lock in scope, investment (or resources), and schedule. This approach is attractive to CFOs that need to plan budgets, even if outcomes are less than ideal.

Microsoft research has shown that 50 percent of all software built using waterfall methodology is either never used or does not meet business objectives. 

- Ron Kovali, Thomas Crook, and Roger Longbotham, Microsoft

First, a comprehensive business case is built by an analyst. Then detailed requirements are collected by the subject matter experts, while data models get locked in by architects. The designs are crafted by the design team. Implementation is performed by engineering, testing executed before market release, and all while the project manager coordinates the delivery based on a fixed schedule, budget, and scope. The stakeholders and sponsors do not get to see the product until the very end after it has been tested and approved for market release.  

Using these traditional methods, companies have been less than successful. Some stats reveal waterfall’s shortcomings:

  • Poorly defined applications (miscommunication between business and IT) are implicated in 66 percent of project failures, costing US businesses at least $30 billion every year (Forrester Research). 

  • 60–80 percent of project failures can be directly attributed to poor requirements gathering, analysis, and management (Meta Group). 

  • 40 percent of end users reported problems (Gartner). 

  • Up to 80 percent of IT budgets are consumed in fixing self-inflicted problems (Dynamic Markets Limited 2007 Study). 

The evidence is clear: Waterfall doesn’t work.

Waterfall is simply a manifestation of the outdated organizational structures still dominating today’s industries—with businesses building software using a waterfall project management methodology, often under the disguise of “in the process of adopting Agile.” This whitepaper explores where the waterfall process breaks down and details in-depth the tactical steps to build a truly cross-functional product organization.

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