Macroscopic view of an Enterprise Software Product Management
Ashutosh Shukla Jul 18,2011
Product Management for the software is very misunderstood term in the general management parlance. It is not just related to managing the development aspect of the product but goes far beyond than that.
In the Modern Product Management, the Product Manager is basically the CEO of the Product. This is the philosophy adopted from the Marketing firms, more specifically FMCG companies. The product management process now starts from the customers and traverse the opposite path as compared to what use to happen in the earlier days. The Product Manager has the responsibility of the Profit and Loss for the product and in the large companies offering multiple products it inculcates competition among the different product managers and, arguably, brings the best out of the resources consumed.
As the diagram shows, there are multiple facets to the Product Management role. Finance, sales, legal aspects etc all are now under the direct responsibility of the Product Manager. The process starts with the market analysis where the market is segmented and the SWOT analysis is done at this initial stage to analyze the opportunity. At this stage it is often tempting for the Product managers to choose the segment where they can make quick profits but often that opportunity is not in line with the overall product strategy and the technology roadmap. Thus managers should be very vigilant at this stage and often peer reviews are recommended to avoid the strategic mistake for tactical benefit.
Although it is similar in most of the aspects to the normal software product management but there are some stark differences. The enterprise software products are generally large and costly and they may not attract new customers until or unless they offer some compelling benefits as compared to the one already in the market and also the switching cost is very high in case of these products. The current technology may not be agile enough to provide that compelling benefits thus most of the time a large enterprise software development project is preceded by the technology development and it is equally important for the Product Manager to remain focused in the technology roadmap and keep the product strategy in sync with the technology development strategy .
Once the technology is developed, the inputs taken from the market and customer is transformed into the ideas that can provide the enduring benefits to large number of the customers. This stage is often accompanied by the idea incubation where employees working on the ground level develop the concepts and the demos to provide the solution. This stage is very important because this is the stage where the real innovation happens and with my experience with the software product company, I can confidently say that strong idea incubation is one of the major success factors for any software product organization. The good ideas were then eventually filtered out and the development team takes over from here. The aim here is not to add as my features as possible but to select and develop the features that the customer is really going to use. Otherwise additional functionalities will simply increase the customer’s total cost of operations without adding any significant value to the business. Thus, in the whole process the Product manager should remain focused on the customer and prioritize the tasks keeping the customer in mind.
In a typical development environment, the product development teams are divided into the sub-product teams at the each granular level of the Product being developed and the Product management philosophy is followed in each team with the Product owner being responsible for all the aspects of that sub product being developed. This structure can be thought of as the entrepreneur culture. This structure enables the organization to form the cross functional team effectively and remove any kind of bureaucracy within the organization. This structure is replicated in as many teams as possible within the product development to achieve the maximum synergy from the bottom to the top.
The product once developed and tested at the organization level is never pushed to market straightaway. One should not forget that the development of enterprise software product is a capital intensive process where the care has to be taken to incorporate localization and customization features and in the initial days, the total cost of operations (TCO) is very high and delivering patch for any kind of bug or defect is very costly thus the product is often given to small number of pilot customers for usage followed by close monitoring. Once the product achieves stability the way for the mass market release is clear. One good aspect about the software product is that incremental revenues are possible without bearing any significant cost once the product is developed and ready. In short, marginal cost of production declines once the product is out of all the above stages.
The process above explained is not a standard process and is neither exhaustive nor generic to be followed for all types of the products. It is purely my experience with the Product Management process I came across while working with an enterprise software product company.
Image source: productmanagementtraining.com and agilestrategyinstitute.com
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