... the close collaboration of an actual user that understands the target business is a huge benefit.
Even if a developer has a good specification to follow (I've yet to encounter such a mythological beast) and has a good understanding of the particular business processes (be thankful if a developer does not start with the question "so, what do you guys do here?") the collaboration of someone that knows the business well and will likely be one of the future users of developer's work is a great help.
Can't be done when customers runs into the thousands though, well it could be but it would be too easy to personalise the app for Fred. Now you could say the business I work for is the customers so I answer yes, but then you are making the assumption that what the business says it wants is what the customer wants.
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