What Is the Discovery Phase, and Why Do You Need One?

At the start of a new IT project, any Product Owner (PO) or Chief Innovation Officers (CIO) may face certain risks: what if the development process is delayed and goes beyond the budget? What should I do if the implemented functions remain non-demanded? Is there any probability that an innovative idea will turn out to be technically infeasible? From our experience even if the development complies with the time and budget and meets the specifications, the commercial success of the project is still not guaranteed.

Within 10 years in the mobile and web development market, we have implemented over 200 projects. In this article, we will tell you how the discovery phase helps to avoid the risk that due to insufficient planning the project will not reach the finish line or will not resonate with the users.

1. What is Project Discovery Phase?
2. Why Does Project Need Discovery Phase?
3. What is Covered by Discovery Phase?
4. Discovery Phase: Umbrella IT Experience
5. Takeaways

1. What is Project Discovery Phase?

The start of any IT project is marked with a lot of uncertainty: to what extent can the project scope grow? What functional requirements are important to the user? What are business or technology pitfalls that can interfere with project implementation? Will the final product make up for the costs of its creation and support?

The Discovery Phase of a software project is a pre-development phase that helps answer the above questions and minimize uncertainty at the start of the project:

• to fix the scope to be implemented in the current project;
• to get a realistic development timing and cost estimate as close to reality as possible.

The minimized risks and a clear and effective implementation plan will allow you to make an informed decision about whether it is worth investing in the development. The cost for the Discovery Phase may be considered as a percentage of the project cost. But it doesn’t increase the cost of the project and rather determines the way your product will be developed further on.

2. Why Does Project Need Discovery Phase?

 The Discovery stage of a project is an optional part. On the one hand, it may take from two weeks to a month and involves expenditures for an analyst, designer, technical specialist, and project manager. Therefore, the step is often refused. In some cases, in order to save money, in other cases - to quickly launch the project and recoup the investment. But, on the other hand, in the long run, savings in the Discovery Phase may result in unexpectedly increased costs, prolonged development, or failure to meet the project-related expectations.

Something like that happened to Everest application, which was intended as a technological platform to help users to achieve their dreams: to set a goal, to define the completion steps and timeline, to receive support and inspiration from friends and like-minded people. The idea immediately resonated with the audience and raised $2.2 million in investments. However, the project implementation exceeded significantly the planned 4-6 months. In the course of the development process, more than once the decision was taken to add new functions instead of focusing on the basic ones. For instance, offline synchronization costed many resources though that was a non-priority function that the first app version could well do without. The long-awaited release demonstrated that the application operated slow, crashed periodically, while the usability left much to be desired. The app maintenance was expensive, the project technical debt accumulated, the budget was exhausted. 2 years after the launch, the project was closed.

The Everest experience shows clearly that finding an idea of ​​a product that will be unique and in demand means only the first step on the path to success. No less important is to save money at the development stage by avoiding excessive functionality that the user will not need, but that will require serious investments. The Discovery Phase of the project and its artifacts present a competent approach to solving the problem.

3. What is Covered by Discovery Phase?

The tasks to be solved during the IT project Discovery Phase vary depending on the Client’s requirements, the nature and the scope of the project. They can be divided into three key groups to detail  what happens in the discovery phase of a project:

3.1. Setting business goals

The first and obligatory part of the Discovery Phase covers collecting and systematizing the Client’s requirements. The team forms a common project vision, determines the scope of business goals and objectives, records the expected results, and the project progress indicators. The analyst prepares a project mindmap to visually see its scope, fix the roles and timing for every stage of the project. 

What is important is that you actively participate in the discussion, as no one knows better than you what you want to get. The accuracy of the simulated system and its compliance with your expectations depends on how productive the interaction at this stage is.

3.2. Market research

Before starting with the IT product development we invite to answer some questions: who is its target audience? In what way does the product solve their problem? How will the product meet the competition? What product parameters are really important for users? For this purpose, the business analyst performs the research of the market and the competitors' offers and communicates with the audience to get into specifics of their needs.

At this stage, a user story is created – a step-by-step way of potential customer interaction with your site or application. This helps to track whether all the needs of the target audience are being addressed in the current version of the system, as well as to eliminate the functions that do not solve the problems significant for the user. Further on, the user story is used by the designers to develop a future product UX prototype.

3.3. Search for bottlenecks and preparing primary specifications

This is the most critical part of the IT Discovery Phase and we do not recommend starting development without it. This is the stage when the functional requirements for the site/application are determined, which are necessary and sufficient to create a minimally viable product (MVP) to allow immediate testing a new idea on real users.

A technical expert gives recommendations on the technology stack and the most suitable architecture. In addition, the expert checks if there are any technically-determined pitfalls related to the implementation of the priority functions.

In case of any doubt, the most complex or innovative functionality is recommended to be tested before starting the project. There is a specific tool for this - Proof of Concept, we’ll speak on it later.

This is also the stage when non-functional requirements for the project are determined, which can significantly affect the timing and cost of development if you do not take them into account at the start of the project, and namely:

• restrictions related to development tools and strategies;
• country- or company-specific rules for performing certain business processes;
• interaction with external interfaces - for example, requirements for API of a product or system;
• legal requirements.

Based on the results of the study, the Client receives a preliminary project assessment including the costs of launching the project, the development time (broken down into phases), and the recommended team composition.

Needless to say, the Discovery Phase for project planning will not save from making adjustments as the work progresses. But it allows the changes to be made more predictable and easier to implement.

4. Discovery Phase: Umbrella IT Experience

The Discovery Phase of the project in its classical form allows you to demonstrate the potential of the product, determine the factors that may interfere with the launch of the project, as well as choose any additional stages of pre-development. At Umbrella IT, we assist with early testing of ideas using three different approaches — MVP, PoC, and CustDev. However, each of them includes the stages of the Discovery Phase, but goes beyond the scope of analytics only, since the final result is broader and affects the field of development or preparation for it.

4.1. Proof of Concept (PoC)

While the reason for a Discovery Phase of a project is to highlight the bottlenecks in the project, checking the concept gives a clear answer whether the method, idea, technology is feasible: will the product work? To what extent will the implementation be complicated and expensive?

Our experience proves that the approach used to create routine IT projects does not work the same way with innovative products. Therefore, if you have an innovative idea and need to get confirmed that implementation costs are reasonable and no restrictions impede implementation, we recommend starting with testing the most complex and innovative functions at the beginning of the project. At that point, the concept is just being formed, and making changes will not entail changes in development time and budget.

The concept check is often confused with MVP (minimally viable product), taking PoC for a kind of a draft project that needs some finishing touch and can be released for production. In fact, PoC is additional research focused on a small part of the future product only, but not the entire system. It allows finding out what technology-related limitations the idea has and whether they can be avoided.

PoC also contributes to estimating timelines and labor costs: business receives specific values as a framework to implement the necessary functions. If the results of the phase demonstrate that the idea is unrealizable or exceeds the budget, you have an opportunity to refuse further development and reallocate the saved money to check the next hypothesis.

At Umbrella IT, a concept review takes 1 month. Within this period, we determine an innovative functionality, generate a list of eventual usage scenarios, develop and test PoC. Upon completion of the work, our Clients receive a technical proof of the idea, a report specifying the identified restrictions and recommendations for further development.

4.2. Minimum Viable Product (MVP)

While PoC is required to confirm the feasibility of the idea, the minimum viable product (MVP) allows you to check whether it will be in demand among end-users.

For instance, your company has lots of promising ideas, but you are reasonably eager to reduce risks and not to waste the budget for an application with the logic that may turn out too complicated for the user. In this case, we recommend developing the minimum functionality only that is required for launch within a predetermined budget, but not to postpone testing until the project is fully implemented.

MVP development takes 1.5 months at Umbrella IT. Within the period, we determine the basic functions, sort it by priority, draw up a functional map, and prepare prototypes of the future product. After that, we proceed to the development of MVP. As a result, you get a functioning product within a predetermined budget.

The approach allows you to run several projects simultaneously and to complete in the early stages those that find no response from the audience. In this way, you accelerate expansion into new market niches.

4.3. Customer Development and UX Design

One more effective approach allowing to create a product that is in demand among the target audience is Customer Development. As you remember, during the Discovery Phase we collect product information and work on a user story to create a UX prototype compliant with the needs of potential customers. Customer Development allows a deeper analysis of the target audience’s needs by testing prototypes on real users even before the product is developed.

Together with the Client, we agree upon the portraits of the target audience and detail the customer journey, draw the interface layout, and use it as a basis to test the product on the focus group. Our partner, the UX Laboratory of the Higher School of Economy, contributes to selecting participants for the focus group. Following each iteration, we make changes to the prototypes and test them again. The Client receives detailed website/application layouts that can be immediately handed over to a project team.

The main outcome is the possibility to create exactly the product that the end consumer will need and not waste your company’s resources. Based on the experience the Customer Development at the pre-development stage saves up to 70% of the budget.

It’s possible, that at the end of one of the pre-development stages you will find out that the idea is not feasible, there is a lack of demand or you will have to go beyond the budget - and such an outcome will be more profitable than the effort and money invested in a project doomed unprofitable, especially when it refers to some expensive IT product development.

5. Takeaways

The Discovery Phase, PoC, MVP, and CustDev are extra and optional stages of IT product development. However, when these processes become common practice included in new product creation, it is a win-win situation for everyone: the business accelerates being ahead of the competitors and increasing profits, and new users cover their needs with a product that exactly meets their expectations.

Umbrella IT specialists are ready to help you test a new idea and reduce the risks related to the development and further support of the product. Learn more about our services and check out the relevant cases.