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How to determine the list of features for management approval at the start of a project when using Scrum

Consider the case of a product development company working on multiple products. If you consider one of these products, let us call it ‘Video Producer’, which is now in version 5. The development cycle of a version of the product lasts 15 months, and in the current run, the team starts the product version 5 in May 2009, to finally release near August 2010, after a period of 15 months. Now if you consider that this is a software which earns around 35% of the overall revenues of the company, and earns 35 million dollars, it is of critical importance to the company. The company CEO would want to be involved in major decisions taken during the development process of the product, and one of the most critical decisions that needs to be taken is to decide the feature set for the version 5 of the software product.
Now, the software team has had issues in the past with changing customer / market requirements during the course of the development cycle and wants to ensure that they have a process whereby they can incorporate frequent (or even infrequent, but market driven) changes into the development cycle, and make the changes they need. Using Waterfall in a previous cycle did not provide the flexibility that was required to incorporate such changes. The team had heard of processes such as Scrum, which meant that the team could handle changing market requirements on a monthly basis. And so, after some presentations and some training, the team decided to move onto using Scrum as the process.
However, once the team decided to move onto Scrum, and adopted a process whereby feature definition and estimation would happen at a monthly level (with the Sprint cycle being set to happen every month), they were faced with a new problem. Like at the start of the work on a new version, the product team had to present a list of the features that were planned for Version 5, along with competitor analysis, market situation, and earnings projection. The other stuff was fine, but it was the feature list that was a problem. To come up with an accurate analysis of the feature list that could be done in the current version, the team would need to do the following:
– Define a prioritized list of features from Product Management
– Do some brief amount of review of these features at the start of the cycle, with engineering working with Product Management and User Interface team
– Do the estimation of the work right at the beginning of the version work (rather than at the start of the every Sprint cycle)
All these steps are necessary to ensure that the team is able to present a list of features that seem realistic for the current version. This effort needs to be accurate, since the list of features would need to be blessed by Product Management and any deviations from the list during the actual development cycle would need to be justified, including to the CEO if necessary.

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