Transformation of the Digital Industry is nothing completely new
Moving towards Product Strategy and Lean Delivery
Historically digital companies used to work on a project basis to provide specific businesses and customers with tailored solutions, fully specified to reply to the needs of that single client. In the past 20 years, the economy and companies across all industries combined, have been going through a digital transformation and have increased their demand for Digital Solutions to address a modern way of living. In fact, communication, business and production processes, tracking, selling and doing marketing, are just a few examples of areas that have been impacted and replaced with dematerialised and automated tools.
Facing that demand, the digital industry itself started facing a need of scaling their digital offer and developing Products and Services to respond to wider customer needs at the same time and what brings the most value for that targeted audience, instead of tailoring projects.
When we talk about Product Strategy, it is often associated also with the concept of “industrialising” the delivery and moving into agile and lean processes.
The concept of Industrialisation and lean production is not new. We can easily go back in time and find lots of similarities with the Industrial Revolution and how manufacturing has always been looking at fast and lean manufacturing processes.
Industrialisation and automation of manufacturing history and the parallel with what is happening in Digital
In 1913, Ford Motor Company, pioneer in automation, launched the first car production assembly line. Back then, where teams of skilled and unskilled workers were employed in the manufacturing car industry to build their products. Ford found solutions to reduce costs and increase production rate, resulting in an increase of profits. The car assembly time was then reduced from 12 hours per car to about one and a half hours per car.
During the second world war, automation was used to produce fighter airplanes, landing crafts, warships, and tanks. It was only from 1945, that Japan and the US started an industrial rebuilding program, based on new technologies. Japan became the world leader in industrial automation and especially in automobiles. Brands, such as Honda, Toyota, and Nissan started manufacturing better quality and reliable cars. They started also providing standard features, classified as extras by other car manufacturers. In addition to offering better cars, market prices for cars became more competitive and then more affordable for a wider mass market.
Manufacturing evolved to adapt also to a growing consumer’s market, a critical need of scaling productivity. In fact, the 1st Industrial Revolution led to an extensive re-organisation of the economy in Europe and North America. Workers’ incomes rise brought an increase of consumption and the development of markets for consumer goods and services of all kinds.
The need of industrialising and Productising Digital Products and Services Portfolios
The same way, the car industry needs to serve a lot more consumers and increase its productivity rates to propose a more affordable and better quality car to the markets, the digital industry sees a large increase of demands for a more scalable delivery of Product and Services. By maintaining individual projects for each customer, Digital companies need to mostly fully dedicate efforts in conceptualising a tailored project, sometimes putting in place a full dedicated strategy and vision, an infrastructure, provide resources to work on the project of that 1 specific customer with its specific needs, with low or even no re-use of Assets. The entire production process from discovery phase to delivery in a live environment will be fully dedicated.
For the customer, it means a high cost of production, but as well a high cost of maintenance and cost of evolution over time as needs are always adapting to fast pace new needs.
When we start looking at customer or user needs for the same Product or Service, we often realise that even if there are specificities, the key critical issues to solve, the value and benefits targeted are common between type of users or customers. What is critical is to develop a real understanding of a customer / user segmentation and a strong user-centric strategy.
Take as an example the companies needing to collect Customer Data on their website in Europe. They are trying to collect qualified Customer Data in an intuitive / engaging way for the customer, safely and being compliant (example of GDPR). For a product, it is worth understanding what is a critical and common path to help that company achieve that objective at a large scale and sharing the cost of development, as well as maximising the learning from others (you should always think about data, learn from it and make fully informed decisions). You will then realise that a certain amount of configurability to offer flexibility to your customer can be considered, such in our example custom fields, mandatory fields or error messages.
In summary, nowadays, you still have 2 ways to proceed. You could, of course, develop from scratch a form for each of those customers. Or, look at what are the real objectives, needs and values across types of customers, define what is common, identify what brings value, and build one configurable solution that each company can simply embed into their website.
This second solution has the benefit to reduce the cost of the build by combining the work for many instead of just one, reduce maintenance by maintaining only one solution instead of many, like in the automation of car manufacturing, scaling the productivity to be able to provide more customers, with more features, faster and for a lower price. In the long term, it opens new doors for higher investment towards innovation.
Oftentimes, the transition between project based digital delivery and product strategy is challenging. A lot of justified questions and “fears” are usually expressed. The first one is around the aspect of customers used to customisation and all that requests that they individually consider important and unique. Because, yes, do not forget that a client always needs to feel unique and your product needs to reply to their needs! I could really go on and on, about this topic but I’d just would like to reassure and address a few key principles which would be further developed in the next weeks articles:
1- Profile your clients, customers and users (and this applies to Business to Business as well) and understand well who they are and what they need. It is hard to provide a product that fits all. But you can develop a product that fits for one or a few targeted types of clients, you can also create features for dedicated verticals or specific industry needs. In the next article, we will discuss the techniques that Digital Companies can use to segment their customers, their potential and their needs in order to be able to drive a Product Strategy and informed decisions.
2 — A successful product is based initially on providing the best solution to essential challenges that will help you customers resolve an issue and generate value. I found myself facing demands and/or requirements from customers that data, analysis and best practices research proved or anticipated that this request would not bring any value and eventually would even create inefficiencies. In Product Approach, any customer demand or feedback, can be an opportunity to really improve your product but can as well be just a cost/effort that generates very small value. Any idea or initiative should be evaluated and sized in terms of value and efforts to deploy and implement that enhancement or new feature. It should also be user-centric and data-driven to help the conversations with your customers and, even internally, with any stakeholders. Not all requirements are equal in effort to deploy, and also on the value that they can bring to a business or an industry to achieve key objectives.
A product team should always argue what value is it going to bring or what problem is it solving; How much revenue or cost saving it is going to generate versus the effort of implementation; Is it worth it? While it is easy to change opinion on what we like, a conversation driven by value, backed by data, is more consistent and helps to get to the right choices, even if it will continuously evolve over time.
3 — Tailored needs… it is always a matter of how you build your Product, how flexible and configurable you want to make it. It is always important to keep in mind though, that flexibility can bring complexity issues. So again, always ask yourself if it is worth it.
Next articles to come in May:
>> Segmenting your user and customers
>> A strategy based on value and efforts
>> What is Custom as configuration?
>> Is Agile always lean?