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The journey to a market-winning product rarely goes down a linear path. Unclear objectives, vague user persona, scarce documentation, and other snags haunt enthusiastic businesses. As a result, around 35% of projects make a nosedive, unable to weather the hectic development process.

However, there’s a way to simplify the lion’s share of your software product development process. A methodical approach combined with the right team structure will set up your project for success and increase the odds of high-grade deliverables.

What is software product development and how does it differ from software development?

While both processes revolve around software deliverables, they differ in goals, stages, and even team composition. The software product development strategy is anchored in customer needs. This often involves creating prototypes and running market analysis to determine the viability of the future product. Hence, along with traditional design and development steps, software product development stages also include product ideation, prototyping, and pilot production.

Software product development challenges that shackle your project

Building a consumable product is the ultimate challenge of the software product development process. The thing is, it implies a myriad of other significant roadblocks that might imperil your undertaking right from the get-go. 

software product development roadblocks

No clear vision

A vague understanding of the end product is a typical pitfall for both startups and well-established businesses. To create a value-packed solution, a team should know the purpose of building a product and the problems it should solve. This long-term mission of the product should be clarified in a product development plan and supported by accurate deliverables and estimates.

Lack of proper documentation

Poorly made software documentation can end up being an expensive headache down the road. From budget overruns to stretched deadlines to irrelevant features, the lack of a unified process for each step directly results from documentation gaps. Also, document inconsistency makes it far more difficult to switch software vendors.

Wrong way of working

Although Agile is billed as a de-facto standard for project management, it can’t be successfully applied by following one-size-fits-all guidelines. And when textbook Agile planning goes awry, teams get frustrated. But the art of Agile adoption lies in understanding the core principles of this management approach and adjusting an Agile-based framework of your choice to fit your unique project needs.

Product inflexibility

New and innovative products usually come with evolving requirements. And if the system design is inflexible and monolithic, you won’t be able to add new features or modify the existing functionality. This also applies to your project management techniques, unless open to change, they won’t let you respond to changing project assumptions safely and effectively.

Poor prioritization

Requirement prioritization is critical for planning, budget control, and scheduling software projects. Therefore, the project backlog should clearly list tasks by priority for the development team. Otherwise, you’ll end up with wasted resources and increased costs of development.

Failure to ensure psychological safety

The central pillar of the agile approach is neither Scrum nor Kanban, but a healthy dialogic process for your development team. Unless fostered positively, intellectual friction will not drive innovation or collaboration. Instead, each team member will be afraid to speak up and suggest new solutions to the problem.

Talent pool shortage

As 1 in 5 organizations are having trouble finding tech talent, skill scarcity can adversely impact your project’s progress. This problem becomes even more critical in competitive domestic markets and is typical for niche skills, meaning that you may spend a large portion of time seeking mythical unicorn staff. 

Struggling to find a quality balance

Failed attempts to strike the right quality-cost ratio can also lead to project flops. That’s why teams may struggle to allocate the right amount of resources to prevent product defects or, conversely, spend too many resources on polishing their product. The key here is to reach a compromise between the cost of quality and a usable product.

Supercharge your product development process

The four constituents of a well-organized software product development process

Planning a consistent product development journey requires a holistic approach where all variables — from team to technology — operate for the benefit of your product. Here are the four elements that can energize your success potential in the product field. 

The four constituents of a well-organized software product development process

Engineering ingenuity

Developing an innovation-friendly culture calls for a collaboration-ready environment where self-managed teams are encouraged to generate out-of-the-box ideas. An engineering culture helps drive your product forward and creates a breeding ground for trailblazing solutions. 

Agile approach

Adopting an Agile mindset is paramount for building from-scratch products with evolving requirements. This approach prioritizes value and achieves it through dynamic, customer-focused practices. But keep in mind that Agile cannot operate in silos, it thrives when viewed as a collective effort.

Digital platforms 

Besides agile process management, your technology stack should also support changeability and give your team the freedom to make any alterations into production in a safe and sustainable manner. Microservices architecture, cloud, and open-source APIs are prominent examples of highly adaptable digital components.

Data-driven product management 

Finally, your development team should be autonomous, yet KPI-driven and aligned. This includes tracking and visually representing software product development metrics that measure delivery performance (deployment frequency, lead time, and others).

Agile software product development lifecycle to build great products

Agile software product development cycle and user-centricity go together like bread and butter. An iterative sequence of development steps helps you meet user expectations by delivering products quickly, yet in a predictable way. Below, you will find the common software product development phases present in Agile. 

agile software product development lifecycle

Product ideation

Everything starts with an idea, but a software product development roadmap kicks off with a crystal clear vision. Working closely with stakeholders, developers, and even future product users, the team first puts together a comprehensive overview of the project. 

From the long-term mission of your product to more detailed business analysis, the ideation process is used to provide clarity around the development of product software and nurture a business concept.

Discovery phase 

The Discovery phase also focuses on research-based activities. But unlike ideation, this phase not only delivers hypotheses, but also takes them to the market for a reality check.  During the Discovery phase, you and your team determine business requirements, define the project scope, and suggest possible solutions to validate your product-market fit in a real world.

Below, you will find the milestones of the Discovery phase.

  • Proof of concept

All software product development ideas are worthy until proven otherwise. Therefore, a theoretical demo, or a proof of concept, is required to validate the feasibility of your solution. A PoC is an empirical exercise focused on demonstrating the viability of your solution — from market top-heaviness to risky features.

Once your idea is validated, your team identifies the development scope and proceeds with the design. 

  • Product UX/UI design

In collaboration with business analysts, UX/UI designers create a high-level product prototype, based on customer research. The prototype is then tested with the users, approved by a client, and refined if needed. After that, the final designs are distributed to production.

  • MVP development

A Minimum Viable Product (MVP) is the final destination of your idea verification. An MVP is an early version of your product with just enough features to make it usable for real customers. It helps the product team glean user feedback as quickly as possible to iterate the product. 

agile software product development


The Development stage helps enhance your MVP with other, nice-to-have features empowering you to turn it into MMP later. In Agile, it’s an iterative, cyclical process that consists of smaller, more manageable increments. Iteration by iteration, your development team builds up the features. Testing happens continuously as new features are added. 

Maintenance and upgrades 

Once your product is released into the wild, your development team monitors its health and performs troubleshooting and necessary upgrades. Perfective maintenance is also important at the post-production stage as it allows you to change existing product functionality by refining, deleting, or adding new features

Let’s build great products together

The many faces of Agile software product development 

The agile software development process is mostly an umbrella term that refers to applying Agile-driven frameworks during development. However, it’s all about matching the development methodology to the project, not fitting the project to the methodology. Below, we flesh out some of the most popular Agile frameworks and techniques to guide your software development lifecycle.

Well-defined system requirements are a luxury commodity for new software products. Frameworks based on the Agile methodology give project teams the platform, culture, and tools to manage changing requirements.

— Yury Yerashenkau, Head of PMO unit, *instinctools


According to the report, Scrum gets the highest marks in software development with 87% of teams leveraging it. This framework helps teams deliver value incrementally in short sprints, which typically last 2-4 weeks, during which the product is designed, coded, and tested. Scrum doesn’t stray from Agile philosophy, instead, it enriches it with rules, roles, events, and artifacts to facilitate the Agile way of development. 

SCRUM process

Scaled agile frameworks (SAFe)

Scaled Agile frameworks are Scrum for enterprises, based on 10 Lean-Agile principles. While Scrum is used to organize small teams, the SAFe framework applies to the whole organization or large, multi-geography teams. The basic construct of SAFe is the Agile Release Train.

Kanban method

Kanban is a popular workflow optimization method that adds more visualization to almost all software development processes — from feature prioritization to testing. Many Scrum teams also use select principles of Kanban as a visual process and project management tool. 

Extreme programming

Extreme programming is a software engineering paradigm that improves the quality and efficiency of your software development process. It is based on a set of values and principles that prioritize customer satisfaction, teamwork, and continuous improvement. 

agile software product development

Other Agile practices 

Due to the emerging requirements, Agile teams often bake additional Agile practices into frameworks. Here are a few examples of curated techniques:

  • Test-driven development (TDD) — writing unit test cases for the software before writing the code itself.
  • Code review — involving one or more developers checking another developer’s work.
  • Pair programming — includes two developers teaming up together on one workstation. 
  • Prioritization techniques (MoSCoW) — a four-step technique that ranks project requirements by priority.

How to decide on a software product development team structure?

The right software product development team structure will determine how well your product is built. But although you need a cross-functional squad of software professionals, a mixed assembly of characters doesn’t automatically drive you to success. Here’s how to select your team members strategically.

Typical software product development team

To facilitate a dynamic development process, you’ll need to have the following professionals on board:

  • Product Owner — holds the voice of the customer and keeps the team backlog aligned with customer and stakeholder needs (usually on the client’s side).
  • Delivery Manager/Scrum Master — caretakers that ensure the project is delivered on time and within budget, while also enforcing the best Agile practices.
  • Development Team (Developers, QA, Designers, Solution Architect, DevOps specialist) — hands-on front players that turn requirements into a fully functional software product.

What does a product team structure depend on?

The set of roles in your development team does not fluctuate much from project to project. The only variable is the number of developers and QA engineers that can differ based on the volume of tasks and deadlines. 

Therefore, before you go into hiring, you have to define the scope of your project. So, if you’re in for a proof of concept, your development team will not be bigger than five specialists (PM, Product Owner, business analyst, software architect, UI/UX designer).  Conversely, full-blown product development requires up to nine specialists to complete as software engineers and testers step onto the scene.

Need a team of product development pros?

Key artifacts of efficient product management

To ship the right product successfully to users, your team has to be guided by lighthouses, or artifacts, that refer to project documents, outputs, and specific deliverables. Let’s see the core landmarks that indicate your product management is on the right track.

ArtifactMeaningDocument contents
Competitive analysisDescription of your business’s target market.– Direct/indirect competitors
– Market share and average revenues
– Industry benchmarks
– Monetization models, etc.
Product visionOutlines the long-term mission of your product. – Business goals
– Target audience and needs
– High-level product description
OKRs and KPIsIncludes performance measurement values.– KPI description and measures
– Objectives and Key Results 
Product roadmapDescribes a detailed vision and direction for a product. 

– Product features
– Release schedule
– Short- and long-term goals
– Product features and milestones
Customer Journey MapIllustrates the stages users go through when interacting with your product.– User persona
– User actions
– Touchpoints
– Pain points
Product Requirements DocumentDefines the necessary features and functionality of a product.– MVP features list
– Engineering implementation details
– Functional requirements
– Product development timeline
Product designs and prototyping documentsCovers all aspects of your product design.– User flow and design
– User stories
– Project specifics
Product release planProvides details of all the features of an upcoming product release.– Upcoming features and enhancements
– Timeline

Back in the day, product development firms managed the entire process from ideation to delivery onshore. But supporting the entire process from A to Z is becoming increasingly expensive and counter-productive. As a result, 79% of companies outsource their IT projects.

With offshore software product development, businesses access a global pool of talent at lower costs. Besides getting expertise that might not be available in your country, you can also tap into the latest technologies to ensure the best quality for your product. 

We at *instinctools take over end-to-end product development projects, allowing you to leverage leading-edge expertise, drive down development costs, and build a high-quality product hassle-free.

Mastering software product development process: from ideation to excellence

It takes a lot to create impactful products that win over customers. A properly structured software product development process is half the battle when it comes to success. An Agile-first, customer-centered, and client-oriented workflow, managed by a dedicated development team, grants you better control, improves project predictability, and saves your resources.

Deliver innovative products with ease


What is the product development process in software?

It’s a multi-step process designed to take a product from the initial concept to the final market launch.

What is Agile software product development?

It is an incremental approach to software development that focuses on shipping digital products in a timely and effective manner. The Agile-based process is characterized by short development cycles, or sprints, that allow for quick feedback and constant evolution of the product.

Is Agile only for product development?

This philosophy isn’t limited to building products. The Agile mentality and Agile-driven methods are also helpful in the development and management of services.

What are the 4 pillars of Agile?

This management approach is founded on four key principles:
1. Processes and tools are no replacement for individuals.
2. A functional product is more important than detailed documentation.
3. A collaborative solution is better than a rigid contract.
4. The team should welcome change.

What is the Agile software development life cycle?

The software product development process flow flow can be roughly divided into five phases, including conceptualization, inception, development, release, and maintenance. Each phase leads to the creation of numerous software iterations.

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Anna Vasilevskaya
Anna Vasilevskaya Account Executive

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