The Standish group, in their Chaos Report, reports that 85% of the features implemented in the average IT project are NOT not used by the customer.
If you knew which features the customers were really going to use, You could avoid wasting 85% of your budget, and you could ship 85% earlier, getting revenue sooner. Sounds like a win-win for both customer and supplier.
This applies to shrink-wrap software as well as in-house projects. id software (if I recall correctly) released limited-features (free) early versions of their breakthrough game Doom to get feedback from their users and get them addicted to their software.
How do you find out which features the customer really need? Ask them. Get them involved in the product with early releases. If possible, get a representative customer involved in the planning and feature definition.
Eliminating waste (like that unnecessary 85%) is one part of Lean Manufacturing. Like myself, Kent Beck did not view "manufacturing" as an appropriate metaphor for software development until he started reading about Taiichi Ohno's Toyota Production Method. Here's a small write-up: by R.Balakrishnan.
Lean Manufacturing, like XP, often encounters what seems to be irrational rejection (even after demonstrating success). On the XP mailing list Kent Beck writes:
I'm reading Lean Transformation, which is full of stories of dramatic improvements in manufacturing quality and productivity that are immediately dismantled as soon as the consultants leave the building, even at the eventual cost of the jobs of the people doing the dismantling. Which is to say, you are not alone.
Harvard Business Review has an article this month about Bill
Bratton, who has turned around 5 police organizations, including the
whole of NYPD. You should read the article, but the sequence I took
Put the managers in direct contact with the problem
Focus you resources on the single worst problem
Enlist powerful allies
Marginalize or eliminate naysayers
Beck also points to a paper [a zip file containing a pdf] on adopting Lean Manufacturing which is titled "First, Do No Harm!" by Michel Baudin. The paper recommends converting to Lean with pilot projects that show rapid improvement and pay for themselves. At no time should converting to Lean cause a drop in revenue or delays in delivering product. Baudin also points out that you can't convert to Lean instantly, because it requires learning new skills. Not unlike the new skills needed for XP.