The document discusses the 4Q model, which is a design-to-cost and design-to-value framework used by Telekom for product development. It categorizes development into four phases (Q1-Q4) to speed up time-to-market. Q1 focuses on developing minimal viable products through fast prototyping. Q2 implements products in small test markets. Q3 makes minor platform changes with low risk. Q4 quickly implements customer feedback. The 4Q model guides investments along the product lifecycle to optimize costs while delivering customer value.

1. DESIGN-TO-COST: WIE INNOVATION-
SPINNER MIT CONTROLLING-FREAKS
FRIEDEN SCHLIESSEN.FRIEDEN SCHLIESSEN.
“THINK BIG, START SMALL, MODIFY FAST”
DTAG, Robert Schwegler
Bonn, Darmstadt, 07.07.2015

2. THE 4Q MODEL: WHAT IS IT? WHERE FROM?
?
1. Optimization initiative Express48 EOY2013, 48 interviews working & mgmt level
2. 4Q Pilot: 4 projects, one cancelled
3. 4Q Steering: promoted within CFO’s Design2Cost initiative as Process Innovation
2

3. THE 4Q MODEL: DESIGNING AND DEVELOPING CUSTOMER’S MOST
DESIRED PRODUCTS AT OPTIMIZED COSTS.
BENEFITS
1. Guide for the product development process,
well fitting to our existing Agile approach
2. Focus: efficient and rapid development, acceleration of Time-2-Market, Feature-
management and fast customer feedback
3
3. Incorporate: Target Costing/ Design to Value principles
4. Criteria to right size investments along all phases of the product lifecycle
5. The Minimal viable product (MVP) is the starting point of the 4Q model.

4. DESPITE FREQUENT USE OF SYNONYMS,
THERE ARE DEMARCATIONS TO D2C AND D2V
Target Costing (TC) Design to Cost (D2C) Design to Value (D2V)
„Designand constructproductsfollowing„Designand constructproductsfollowing„Designand constructproductsfollowing„Designand constructproductsfollowing
costpointaspects“costpointaspects“costpointaspects“costpointaspects“
„What is a productallowedto cost?“„What is a productallowedto cost?“„What is a productallowedto cost?“„What is a productallowedto cost?“ „Designand constructproductsfollowing„Designand constructproductsfollowing„Designand constructproductsfollowing„Designand constructproductsfollowing
customer needs“customer needs“customer needs“customer needs“
4
Guiding approach: Minimal viable product (MVP)
minimal viableMVP
Low-quality products, that
either don‘t work or
nobody needs
Products that well-funded
companies can afford to
create by doing a lot of
market research and R&D
A quick,but usefull product you can create,
beforeexhaustingressourcesand confidence

5. HIGH
Customer
Value
NO VALUE
(BELOW THE
MINIMUM
VIABLE
PRODUCT
THE 4Q MODEL FOCUSES ON DESIGNING THE MVP
USING D2V / D2C PRINCIPLES FOR FURTHER INVESTMENTS
BAD VALUE/COST
RATIO AREA
Details on MVP
DESIGN TO VALUE (D2V)
AREA
4Q Model
Idea: Categorizingof developmentand operationsCategorizingof developmentand operationsCategorizingof developmentand operationsCategorizingof developmentand operations
to speed-up time-2-market
The MVP is the startingpointMVP is the startingpointMVP is the startingpointMVP is the startingpointof the 4Q model
All additional investments are tightly bound to
D2C/D2V following the MVP approach.
The minimum viable product is that version of a
new product which allows a team to collect thecollect thecollect thecollect the
maximumamount of validatedlearningmaximumamount of validatedlearningmaximumamount of validatedlearningmaximumamount of validatedlearningabout
customers with the least effortwith the least effortwith the least effortwith the least effort
An MVP is notis notis notis not a minimal product - it is a strategy
and process directed toward making and selling a
product to customers
It is an iterativeprocessiterativeprocessiterativeprocessiterativeprocessof idea generation,
prototyping, presentation, data collection, analysis
and learning.
LOW
PRODUCT
FEATURE SET)
5
# Features
Quelle:hillerassociates.com,wikipedia
THE TELEKOM
4Q MODEL
Details on MVP

6. 4Q MODEL: CATEGORIZING DEVELOPMENT AND OPERATIONS
TO SPEED-UP TIME-2-MARKET
Details
Q1:Q1:Q1:Q1: Teams have the option to develop agile new offers and
pre-test them in small test market
Q2:Q2:Q2:Q2: Mass marketable implementation on pilot
experience in Q1
Q3:Q3:Q3:Q3: Risk minimized changes on platform components
Q4:Q4:Q4:Q4: Small adjustments to customer feedback will be
quickly implemented automated provided.
4Q Model
PROJECTMAINTENANCE
FRONTEND
Lowimpact
Prototyping
Adaptions/
Configuration/
Customizing
6
Efficient and rapid development
Support of the "fail fast, fail cheap“ principle
Acceleration of Time2Market by categorizing work
Fast customer feedback
Simple integration of partners (e.g. best shoring in Q2)
Incentives for lean development (avoiding overhead,
agile approach)
Targets / AdvantagesQ1Q1Q1Q1
Q2Q2Q2Q2Q3Q3Q3Q3
Q4Q4Q4Q4
FRONTENDBACKEND
(Platform)
Highimpact
Adjustments
of platform
Project work
Opex Capex

7. 4Q MODEL: CATEGORIZING DEVELOPMENT AND OPERATIONS
TO SPEED-UP TIME-2-MARKET : TRANSITIONS WITHIN 4Q
Details on transitions4Q Model
PROJECTMAINTENANCE
FRONTEND
Lowimpact
Prototyping
Adaptions/
Configuration/
Customizing
1
Fail fast,
fail cheap
3
2
4 Drop product idea
Learn about product potential with minimal investment3
New product
Complex new function/feature2
Small Changes on existing products
Bug fixing1
7
Q1Q1Q1Q1
Q2Q2Q2Q2Q3Q3Q3Q3
Q4Q4Q4Q4
FRONTENDBACKEND
(Platform)
Highimpact
Adjustments
of platform
Project work
Opex Capex
fail cheap
5
6
7
Customization leads to core adjustments
Typical implementation duration per feature: days7
Ensure high quality and implement further user requests
Typical implementation duration per feature: weeks6
Plan further investment steps based on successful prototype
Typical implementation duration per feature: Months5
Initial take over of parts of innovation into existing product(s)
Typical implementation duration per feature: days4

8. 4Q MODEL: CATEGORIZING OF DEVELOPMENT AND OPERATIONS
TO SPEED-UP TIME-2-MARKET
4Q Model
PROJECTMAINTENANCE
FRONTEND
Lowimpact
Fail cheap, fail fast!
Fast development teams, low SLA, low
volume traffic, throw-away prototypes
UI-driven innovation on available APIs
Extension of server-side functionality
Runs in agile scrum contracting mode
Gathers requirements for heavier backend implementations
Restricted resources (no sustained eng.)
Pilots/prototypes need to be handed over to Q2 or be killed
Fast customer feedback loops
Small changes with local impact only (no cross dependencies on sub-
systems) with local & risk based testing
High deploy frequency
Fast & automated release cycles
Typical changes:
Mainly FrontEnd (UI) changes for market adaptations
Sustained Engineering (minor changes)
Market local extensions with configuration
8
Q1Q1Q1Q1
Q2Q2Q2Q2Q3Q3Q3Q3
Q4Q4Q4Q4
BACKEND
(Platform)
Highimpact
Pilots/prototypes need to be handed over to Q2 or be killed
High quality implementations with input from requirements
gathered in Q1
Some key project people will move to guide product stream
development (Q3)
Clear contracting to multiple API users/providers and quality
pre-announced changes to them (capacity management)
Model seamless migrations on incompatible changes between
sub-systems
Ability to steer off-shore with running fully functional prototype
Market local extensions with configuration
Market local customization implemented at predefined customization
hooks resulting in direct feedback for Q3
Sustained Engineering
Mainly Resource Facing Systems
Fast cycles for bug-fixes and minor adaptations avoiding
system inconsistencies
No dependencies
Supports enhancements
and maintenance

9. CONTEXT OF LIFE CYCLE, 4Q-MODEL AND DESIGN TO …
Sales
Time
Introduction Growth Maturity DeclineLife Cycle
Product/
Feature
4Q Focus
9
Development of a Minimal
Viable Product (MVP) with
focus on time-to-market.
Maximize variabilization of
costs along customer line.
Introduction of new features
along D2V criteria and
optimization of product
development costs.
(Profitably) Maximize Revenue.
Product lifecycle management.
Customer experience
benchmarking and continuous
monitoring of cycle.
maximize EBITDA/EBIT
… Value … Cost + Value … Cost + Value
Liquidate product
Beware of expensive ‘turn
around plans’. Deliver cash,
otherwise liquidate.
… Cost
Product
Financial
Design to …
Target Price n/a Extractable/Available Available Available

10. THANK YOU!