82 CHAPTER ◆ 7 STAGE 1: Overview
Steve McConnell in his text Rapid Development points out that design serves as the
foundation for construction, project scheduling, project tracking, and project control, and
as such effective design is essential to achieving maximum development speed.^2
Early and often delivery of prototypes, which enable feedback from interested parties,
is a key factor to project success and of our methodology. Over the course of Stage 1, prod-
uct teams design and document in as much detail as possible the new trading/investment
system ’ s functionalities. Over each loop, the team should consider different algorithms
and build prototypes of components of the trading/investment system. Prototypes in Loop 1
are usually scaled down, and represent approximations based on research into competing
systems. Subsequent loops investigate new quantitative methods and produce new proto-
types. Team members evaluate prototypes and their strengths, weaknesses, and risks, iter-
ating through the spiral until the refined prototypes collectively represent the final trad-
ing/investment strategy. Lastly, these refined prototypes are assembled into a consolidated
prototype, which should be thoroughly evaluated and tested.
Planning prior to entry into K|V Stage 1 should determine what resources will be
needed for the design and development effort. The product team should be sure to obtain
a sign-off in advance of the Stage 1 as to the timing, duration, money, and personnel
issues that will impact the team ’ s ability to successfully complete its work. We recom-
mend these forecasts be made using a Delphi approach (described in Chapter 2). Prior to
entering the development process, the product team and top management must agree on:● The steps necessary for the trading system ’ s design and development.
● The review, verification, and validation appropriate for each of the steps in Stage 1.
● The responsibilities and authorities necessary for the design and development
processes.As design and development will usually involve contact with personnel external to the
product team, top management must understand and exercise its obligation to manage
the interfaces between the product team and different departments the team will encoun-
ter during design and development to ensure communication and establish clear lines of
responsibility.
As the design and development process moves forward, changes to the original plan
may be necessary and even desirable. Should that be the case, the organization must
update the plans. Top management and the product must determine the design and devel-
opment inputs relating to product requirements:● Functional requirements, that is, what is the product supposed to do?
● Performance requirements, that is, how does it do it?
● Performance metrics.
● Applicable regulatory requirements and laws.
● Information derived from previous similar designs where applicable.
● Any other requirements essential to the design and development.A survey of more than 8000 projects found that the top three reasons that projects were delivered late,
over budget, and with less functionality than desired all had to do with requirements-management prac-
tices: lack of user input, incomplete requirements, and changing requirements. 1