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About usability testing and timing

Suppose you are in a tight development cycle. You have to deliver either a new product, or the next version of an existing product. Getting the features of a product right is always a touch task, given that there are a number of competing features that seem important, and prioritizing the features is something that is very important. This decides the priorities that the engineering team (the feature development team) will follow during the development cycle.
How is this priority actually decided ? If the company is in in the business of defining an absolutely new product that has not been conceptualized as yet, then getting some feedback from prospective customers is difficult; however, if there are already customers using an existing product (from the same company or a rival company), then it is absolutely essential that these users be polled for the features so that there is a good idea about the features that are most critical (it would also help to identify features that customers would be willing to pay a premium for).
Now consider that we are in the development phase of the project lifecycle, where the UI team works along with the engineering team to define the workflow for the feature. There is a lot of discussion around what the feature should be like (with a possibility of the discussion getting heated as a regular part of feature discussion), and eventually most people agree to what the feature should be like. The UI specs of the feature are drawn up and the feature implementation is based on the spec. At this point, everything may seem settled, but it is critically important that this final implementation be evaluated for usability issues. At this point, the team needs to find a set of people who would adequately represent the final set of users, and get them to see the feature working in the actual product. Such usability testing will help determine whether the determined final feature is actually something that the users can accept, or whether there are problems that need to be modified.
The timing of such user testing is most critical. Typically, such workflows reach a final form close to the end of the cycle, and this is the form in which users can actually exercise the workflows. However, in a contra effect, this time is also very late in the cycle, and the team will be hesitant to accept changes that are significant, since the amount of time required to make these changes may not be easily available.
What is the solution ? The solution that seems to work is to have a much more active involvement with users, starting with showing them mockups as the workflow gets more concrete, active question and answer sessions about what they may be looking for, till the time that they can review the actual product implementation. Further, if a workflow is very new and contentious, then it would make sense to try and complete it earlier. And finally, there needs to be time built into the schedule to take such changes.

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