Why Agile decision making often contradicts gut-feel
Back in the day when life was simple, organisations building new computer systems would follow the same proven methodology. They would sit down, plan the system, build it, and then launch it – just like that.
Everyone would then pat themselves on the back for a job well done, and head straight to the next project. Unfortunately, one day some bright spark sat down and realised that as these systems got bigger, the time they took to launch became exponentially longer - and that they were usually out of date by the time they finally did launch.
To add insult to injury, the business would have to continue to use the old 'archaic' system during this build - missing opportunities and losing money.
Then, along came agile: launch small, launch many, and thus the world of system builds was saved from its own inertia.
This approach is quickly becoming adopted in the world of marketing - with the web being singled out in particular. Let us take a look at a scenario of an ecommerce site looking to undertake a series of improvements on their site and where agile forces you to change your approach.
Scenario: improved payment gateway to increase conversion
You have 2 choices for your ecommerce website: a partial implementation of an improved payment gateway which will cost £4,000 and take 4 weeks, or a full implementation which will take 10 weeks and cost £5,000. You know the full implementation will prove twice as effective in sales uplift than the partial. What is your decision? This is a no brainer, the full implementation will only cost £1,000 more and is twice as effective.
Are you sure about this?
This is where the devil is in the detail (or in this case, in the KPI ecosystem forecast model). By considering important details such as uplift, gross profit, revenue etc, the figures can tell a different story.
In this scenario, with the appropriate figures, the incremental profit gained by implementing the partial solution 6 weeks earlier is shown to be £12,000. Suddenly the choice is not so clear. In fact, in this instance, the figures are telling us to develop both solutions in parallel. On paper it costs more, but the profit figures show a higher return (£8,000 in this case).
If only forecasting was this easy
If we take this logic and apply it to the wider marketing ecosystem, these choices become much harder to make without the support of proper quantitated impact forecasts informed by proper business levers modelling.
After all, if we were looking to build a new interim website to launch in 4 weeks (with no 3-month immersion phase) and then another in 6 months (fully immersion-enriched), does this make sense?
If you factor in factors such as:
- improved outbound sales efficiency
- improved ppc conversion
- higher organic conversion rate
- improved analytics and insight to inform main build
- and so on....
Suddenly there is a conversation to be had.
The takeaway here is not to simply trust good old fashioned gut-feel when making decisions within the digital sphere. Start with the figures, let them inform you, then decide the most appropriate direction to take.