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Developing Products on "Internet Time": The Anatomy of a Flexible Development Process

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  • Alan MacCormack

    () (Harvard Business School, Boston, Massachusetts 02163)

  • Roberto Verganti

    () (Politecnico di Milano, Milan, Italy)

  • Marco Iansiti

    () (Harvard Business School, Boston, Massachusetts 02163)

Abstract

Uncertain and dynamic environments present fundamental challenges to managers of the new product development process. Between successive product generations, significant evolutions can occur in both the customer needs a product must address and the technologies it employs to satisfy these needs. Even within a single development project, firms must respond to new information, or risk developing a product that is obsolete the day it is launched. This paper examines the characteristics of an effective development process in one such environment---the Internet software industry. Using data on 29 completed development projects we show that in this industry, constructs that support a more flexible development process are associated with better-performing projects. This flexible process is characterized by the ability to generate and respond to new information for a longer proportion of a development cycle. The constructs that support such a process are greater investments in architectural design, earlier feedback on product performance from the market, and the use of a development team with greater amounts of "generational" experience. Our results suggest that investments in architectural design play a dual role in a flexible process: First, through the need to select an architecture that maximizes product performance and, second, through the need to select an architecture that facilitates development process flexibility. We provide examples from our fieldwork to support this view.

Suggested Citation

  • Alan MacCormack & Roberto Verganti & Marco Iansiti, 2001. "Developing Products on "Internet Time": The Anatomy of a Flexible Development Process," Management Science, INFORMS, vol. 47(1), pages 133-150, January.
  • Handle: RePEc:inm:ormnsc:v:47:y:2001:i:1:p:133-150
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    File URL: http://dx.doi.org/10.1287/mnsc.47.1.133.10663
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    References listed on IDEAS

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    Cited by:

    1. Murray, Fiona & Stern, Scott & Campbell, Georgina & MacCormack, Alan, 2012. "Grand Innovation Prizes: A theoretical, normative, and empirical evaluation," Research Policy, Elsevier, vol. 41(10), pages 1779-1792.
    2. Nader Ale Ebrahim & Shamsuddin Ahmed & Zahari Taha, 2010. "SMEs; Virtual Research and Development (R&D) Teams and New Product Development: A Literature Review," Post-Print hal-00593362, HAL.
    3. Niels Jørgensen, 2007. "Developer autonomy in the FreeBSD open source project," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 11(2), pages 119-128, May.
    4. Zhang, Qingyu & Vonderembse, Mark A. & Cao, Mei, 2009. "Product concept and prototype flexibility in manufacturing: Implications for customer satisfaction," European Journal of Operational Research, Elsevier, vol. 194(1), pages 143-154, April.
    5. Staats, Bradley R. & Milkman, Katherine L. & Fox, Craig R., 2012. "The team scaling fallacy: Underestimating the declining efficiency of larger teams," Organizational Behavior and Human Decision Processes, Elsevier, vol. 118(2), pages 132-142.
    6. Dawid, Herbert & Kopel, Michael & Kort, Peter M., 2010. "Innovation threats and strategic responses in oligopoly markets," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 203-222, August.
    7. Guo, Liang & Wei, Yinghong Susan & Sharma, Ruchi & Rong, Ke, 2017. "Investigating e-business models’ value retention for start-ups: The moderating role of venture capital investment intensity," International Journal of Production Economics, Elsevier, vol. 186(C), pages 33-45.
    8. Di Stefano, Giada & Gambardella, Alfonso & Verona, Gianmario, 2012. "Technology push and demand pull perspectives in innovation studies: Current findings and future research directions," Research Policy, Elsevier, vol. 41(8), pages 1283-1295.
    9. Satish Nambisan, 2002. "Complementary Product Integration by High-Technology New Ventures: The Role of Initial Technology Strategy," Management Science, INFORMS, pages 382-398.
    10. Paulo J. Gomes & Nitin R. Joglekar, 2008. "Linking modularity with problem solving and coordination efforts," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(5), pages 443-457.
    11. Riel Allard C.R. van & Lievens Annouk, 2003. "New service development in high tech sectors: a decision making perspective," Research Memorandum 028, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    12. Ramasesh, Ranga & Tirupati, Devanath & Vaitsos, Constantin A., 2010. "Modeling process-switching decisions under product life cycle uncertainty," International Journal of Production Economics, Elsevier, vol. 126(2), pages 236-246, August.
    13. Claussen, Jörg & Essling, Christian & Kretschmer, Tobias, 2015. "When less can be more – Setting technology levels in complementary goods markets," Research Policy, Elsevier, vol. 44(2), pages 328-339.
    14. Pierre-Antoine Arrighi & Pascal Le Masson & Benoit Weil, 2015. "Managing radical innovation as an innovative design process: generative constraints and cumulative sets of rules," Post-Print hal-01199932, HAL.
    15. Indranil R. Bardhan & Vish V. Krishnan & Shu Lin, 2007. "Project Performance and the Enabling Role of Information Technology: An Exploratory Study on the Role of Alignment," Manufacturing & Service Operations Management, INFORMS, pages 579-595.
    16. Nambisan, Satish, 2013. "Industry technical committees, technological distance, and innovation performance," Research Policy, Elsevier, vol. 42(4), pages 928-940.

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