Product Development Primer for 2018

Transcription

1 Product Development Primer for 2018 Technology product management leaders are under growing pressure to differentiate their products and improve customer experience, all without compromising time to market. Succeeding at product development requires design thinking, agile methodologies and skills to collaborate with engineering. The following planned research for 2018 provides the insights and activities to allow you and your product team to develop better products faster and more efficiently. Aapo Markkanen Research Director

2 Product Development Primer for 2018 Published: 23 May 2018 ID: G Analyst(s): Aapo Markkanen Technology product management leaders are under growing pressure to differentiate their products and improve customer experience, all without compromising the time to market. Succeeding at product development requires design thinking, agile methodologies and skills to collaborate with engineering. Scope Product development aims at turning a planned product concept into a materialized offering. It captures activities that allow product teams to develop better products faster and more efficiently. In 2018, our research on this initiative focuses on the following four issues: Evolve the product Differentiate the product Develop the customer experience Accelerate the time to market Analysis This document was revised on 26 June For more information, see the Corrections page on gartner.com.

3 Figure 1. Product Development Overview Page 2 of 9 BU = business unit Gartner, Inc. G

4 PLM = product life cycle management PM = product management Source: Gartner (May 2018) Gartner, Inc. G Page 3 of 9

5 Product development plays a critical role in product management as a domain in which vision and planning on products are transformed into concrete product offerings that can be introduced to the market. It is the most technical of the five Key Initiatives identified in Gartner's Product Management Framework, as this is the stage in which product teams must engage closely with engineering to ensure that the product will be delivered as envisioned. Product development is where the features and any new services designed to differentiate the product take shape. At the same time, an effective product team must understand the various demands that buyers have for the offering and sense early on whether such needs are about to change. Distilling insights on buyer behavior makes it possible to evolve the product in the right direction. Furthermore, the involved team members must also grasp the needs of another, possibly even more important group of external stakeholders: the end customer. By proactively following and interpreting customer needs, the product team positions itself to truly develop the customer experience, instead of reactively "ending up" with a suboptimal customer experience due to poorly understood needs. And finally, to be successful, the product team not only has to do the right things but also has to do them right. Being able to create a compelling product is not enough, if doing so takes too long and costs too much. The team must thus continue to improve the development processes to reflect changes in external needs, as well as internal tools and practices. Continuously improving the internal processes allows the team, most of all, to accelerate the time to market. Top Challenges and How Gartner Can Help Balancing the external needs and demands with the internal resources and capabilities is not by any means an easy feat. This balancing act, however, is something that a product team must learn to master if it is to achieve excellence in product development. Getting this stage of product management right forces the team to deal with, and make sense of, a lot of ambiguity and uncertainty. The stakeholders in engineering may not always paint a full picture of what is actually possible, often playing either up or down the involved technical challenges. In that sense, driving the development of a product is a constant exercise in "the art of the possible" in other words, to determine what can realistically get done. Similarly, to fully understand buyer demands and customer needs, product managers must interpret the external feedback they are given. After all, disruptive innovation is built on the idea that the customers do not always understand their needs well. Rather than solely meeting the current needs, it is sometimes better to anticipate the future ones or even imagine what types of new needs could be created with a whole new product paradigm. Challenges facing the product teams vary, but Gartner can help on all fronts. In our upcoming research on product development, we will be seeking answers particularly to the following questions. How do I differentiate the product to gain competitive advantage? The product team members who are tasked with driving product development must find ways to differentiate the offering in the market. The differentiation can be achieved through the product's key Page 4 of 9 Gartner, Inc. G

6 features, as well as through accompanying services that add value to how the customer uses the product. The most important part is ensuring that what is offered enables a real benefit for the end user. Product or service capabilities alone are seldom enough to achieve differentiation in the eyes of the customer, but the product has to make a tangible difference to the customer experience. Products with no real differentiation can only compete by their price. Planned Research Product Teams Must Avoid Focusing Solely on Product Features Product Teams Need a Sharp Focus on FAB for PRDs, Competitive Analysis and GTM Contribution How can I evolve features and functions of my product with service elements and valueadded content streams? Creating differentiation through value-added services or content warrants special attention by today's product teams. Over time, in any given market, the competing products' core capabilities tend to converge with each other, as laggards learn from leaders and catch up accordingly. If the market is mature, such core capabilities offer little room for further invention and innovation. This shifts the focus to services and content, which provide a greater scope for product teams to do things differently than their competitors. Service innovation is becoming a hot area, especially with the rise of IoT. With IoT, previously one-off product purchases can now be enhanced with service elements, even to the extent of a full XaaS-based model that ultimately transforms the product into an ongoing service relationship with the customer. Planned Research Transforming Your Product SKUs Into an as-a-service Solution Striking the Right Balance of Product and Service in Product Development What are the best practices behind delivering great customer experiences to customers? CEOs and business unit leaders increasingly view customer experience as the top driver for sales and retention, which is also making it the new top priority in product teams. The intensifying focus on customer experience, in turn, poses a fundamental challenge to how such teams drive product development. Historically, the process to develop a product has been highly defined and sequential, drawing on many of the best practices applied in manufacturing. The old way of doing things, however, lends itself poorly to delivering great customer experiences, as it puts the product managers' expertise before the customer's needs. Consequently, product teams must adopt an approach that makes the process more collaborative, iterative and open in other words, design thinking. Gartner, Inc. G Page 5 of 9

7 Planned Research Human by Design: UX Product Design for Industrial Environments Customer Obsessed: Breaking Through Silos, Impacting Your Product Success How can I accelerate the time to market and the time to revenue? Ultimately, the success of a product is measured by how much money it makes for the company. Using design thinking and creating an outstanding customer experience will not count for much, if the product misses its critical launch window or fails to meet its revenue targets. The C-Suite has a famously low tolerance for internal projects that may impress on paper but do not serve the company's business goals. This challenges product teams to ensure that their projects stay on track, despite all the new requirements that are making the projects inherently harder to manage. Agile development is the key to squaring the circle, allowing the organization to detect and address setbacks faster. However, the team leaders must be disciplined and methodical in applying agile principles. Many organizations call themselves agile but not all truly are. Planned Research Ready, Set, Launch: Accelerating Time to Market and Adoption Through Support Agile in Product Development Fail Fast Is More About Fast Than Fail Related Priorities Table 1. Related Priorities Priority Product Planning Product Leadership Product Introduction Improve Technology Go-to-Market Effectiveness Product Life Cycle Management Focus This initiative focuses on product planning and design. Product leadership is about leading efficient organizational structures, developing talented resources and building clear communications across the business to meet product management challenges. In product introduction, the product team prepares the developed product offering to be sold and marketed. The team must plan beyond the release stage to ensure the product's commercial feasibility. This initiative focuses on the core technology go-to-market disciplines used to reach, engage, influence and retain customers as they move through the entire life cycle buying through owning. This initiative focuses on managing not only evolution and innovation in product portfolios, but also released and launched products and their upgrades, including the service and endof-life products. Source: Gartner Page 6 of 9 Gartner, Inc. G

8 Suggested First Steps "Implement a New Product Management Framework for Technology Businesses" Essential Reading "Tech Go-to-Market: Improve Customer Experience by Transforming Product Development and Go-to-Market" "Tech Go-to-Market: Product Managers Apply Design Thinking to Transform Customer Experience" "Design Thinking Can Revolutionize Your Customer Experience Strategies" "Adopting Agile? Do What Successful Agile Teams Do" "Tech Go-to-Market: Creating the Path From Features to Value" Acronym Key and Glossary Terms FAB Features, Advantages and Benefits GTM IoT PLM PM PRD SKU UX XaaS go to market Internet of Things product life cycle management product management product requirements document stock keeping unit user experience "X" as a service Evidence This initiative, as well as the associated initiatives of product planning, product life cycle management, product introduction and product leadership, has all been developed leveraging multiple Gartner information and insight sources, including: Dedicated survey of product managers to identify the critical initiatives, priorities and challenges Published and researched insights around general product management, as well as in specific technology areas Gartner, Inc. G Page 7 of 9

9 Engagements with hardware, software and service technology vendors, and end users Discussions between Gartner analysts on related product management topics Page 8 of 9 Gartner, Inc. G

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