Towards integrating perceived customer value in the evaluation of performance in product development

Product delivering companies invest resources in product development activities in order to create value. Still, when performance in product development is to be evaluated, time, cost, and quality are in focus, especially in the later stages of the development when it is expensive and difficult to make any changes. Time, cost, and quality are important dimensions of performance but they are not revealing the complete picture. Missing is the value perspective. This paper outlines a method for how perceived customer value can be used to evaluate performance in product development and describes how it is verified through a case study. By using the perceived customer value of requirements, the value propagation throughout the development is possible to monitor based on both market and scope changes. In addition, a measure of productivity can be calculated by relating the perceived value to the spent effort. This information is used in order to visualize the value propagation and performance during the development. Hence, through this method it is possible to evaluate the productivity of activities from initial ideas to a final product. The paper is concluded with a discussion of managerial implications and how this method contributes to theory.