Here are 3 main reasons why proof of concepts are important for small businesses:
1. Discover potential issues, risks, and obstacles
Proof of concepts (POC) allow small business owners and the I.T. project manager to pinpoint issues, risks, and obstacles that they might face during the implementation of new software-based products and services before actual development work starts.
Although proof of concepts can increase the chances for success of any digital project, it's important to note that they can't guarantee smooth, risk-free implementation.
In other words, the I.T. project manager is still responsible for documenting the information uncovered by the proof of concept and to plan, together with the client, any additional actions required to address risks, cover the budget for unexpected events, improve the overall outcome, and increase the chances for success.
2. Evaluate scalability, address scope creep
Often, during the conversion of an idea into a digital product or service, unexpected things happen that transform the client's original vision into something new, more mature, and refined. The client and the development team need to understand this transformation and get an idea of what to expect.
In this situation, proof of concepts allow decision-makers to get a sense of the project's scalability from multiple points of view: the size of the production, the system architecture, the human resources, the external workflows, and so on.
Understanding the scalability of a software-based product or service allows stakeholders the freedom to take business decisions outside the context of the project. For example, decide to start other projects and collaborations if resources are available, modify ongoing procedures, and so on.
Another benefit of creating a proof of concept is that it helps address scope creep (which refers to how a project requirements list tends to multiply over the project's life cycle).
For example, a software service for an online business can begin life with 5 core features but end up with 10 additional features based on market feedback and business priorities. Another example, the sudden changes into technology might force expenses beyond the initial budget.
Understanding all this information is very useful and allows the development team to properly communicate with business owners and realistically convince them of the ability to handle the actual development task.
3. "Green-light" for investment and development
Demonstrating to small business owners and entrepreneurs that investing in the creation of a new digital product or service will be worth it is not an easy thing to do without the information that a proof of concept provides.
Proof of concepts give the opportunity to evaluate and validate an idea but also to understand it's potential for profit. From illustrations, design/branding concepts, research and development documentation, to actual small scale applications; proof of concept can come in many shapes and sizes.
It's easy to see that a proof of concept is a powerful argument that can convince stakeholders to invest resources into the project and it can be used in win-loss or cost-benefit analysis. Avoiding spending time and resources into an unclear project is very important for any small business or entrepreneur.
Smart investments start with the creation of a proof of concept which leads to an efficient development process and profitable business ventures.