Automate the Tactical and Optimize Your Product Management Processes

By Michael Lester, Telelogic

Successful medical device companies can be identified by their ability to understand the most valuable needs of their markets. Within these organizations, they have learned the value of product management and how to use the role as a true market expert, rather than just a glorified project manager. Medical device manufacturers are under immense pressure to deliver new products in an increasingly more competitive market, while complying with new or changing regulations. Add to that the complexity of relaying all of those details to an outsourced engineering partner, and it becomes obvious that there is a need for strong product management.

An outsourcing partner that is connected to, and has an understanding of, the value of a particular product to its market becomes a more critical part of the value delivery chain. This type of partner is an extension of the OEM’s product management team and is critical to the success of the product—and both companies. In fact, in a symbiotic partner relationship, a partner that listens and understands the value a product can deliver to the market can become part of the achievability assessment, helping the right product reach the right market at the right time.

Fatally Reactive

Given the amount of effort it takes to understand changing regulations, as well as input from studies and internal stakeholders, it is not uncommon for product managers to be reactive instead of proactive. They are under constant pressure from inside and outside their organizations to document the product requirements, answer questions and provide reports on performance and can lose sight of the need to stick their head above the waves and understand the direction of the market. In the face of increasing competition, this failure to understand the details of the market—from buying and use personas to competitive dynamics and market expectations—can be a fatal flaw.

It is human nature to fight the immediate fires, which often are the low-value activities that will get someone to leave you alone. As any firefighter will tell you, fire prevention is worth a lot more than firefighting, yet most people only think about firefighting in their everyday product development activities. This mentality is leading to poor products and burned-out product managers, which leads to more apathy and less interest in understanding the valuable needs of customers. Every role in the product development process benefits when the reasons products and their capabilities are being developed are understood.

Our Own Worst Enemy

In 2006, the Aberdeen Group, a Boston, MA-based technology research firm, surveyed a variety of product companies from all verticals about why their products were failing, and 37% responded that their product was not meeting customer or market requirements. In most cases, it isn’t because of a lack of requirements; it is a lack of delivering the right requirements. When asked what the challenges were to delivering the right products, 38% of those same companies said that the inability to properly value opportunities, and 37% said decision-making was not based on objective information.

Software-based management tools for overseeing and completing requirements have been available for a while, and while they provide the centralization of the information about the product requirements, only a few solutions offer the ability to value the requirements in terms that relate how important they are to key customers, markets, personas and even to your own organization in terms of potential revenue or recognition.

For example, one product manager actually went so far as to ask his customers to express requests and requirements along with an estimate of the amount of money or time they would save with the requirements, or what additional sales would be possible with that capability. As the customers began to be value-driven in their requests, they actually stopped focusing on petty requests and only on those that would make a real difference. Everyone became more effective, and everyone was improving their value.  

In many companies, internal politics and a missing understanding of what is valued by the customer is leading to a significant number of product failures. How is this possible? We have mastered the how, but forgotten the why. Too many organizations, especially those with established products, find themselves  “feeding the beast” to keep things running and do not take the opportunity to hunt for the revolutionary changes coming to their market. Many organizations focus strictly on the process by which products are developed using extensive automation, particularly in the engineering portions of the product’s development. They have forgotten to link the engineering processes to the discovery and valuation processes on the business side.

One medical device company was able to bring its products to market months earlier than previously possible because it automated the decision-making process with a tool that not only offered the ability to understand value, but also provided visibility into the current engineering effort so the company could make real product portfolio decisions to make the most of its financial and human resources and see the immediate impact.

Becoming Value-Driven

Product management consultants often speak of being sales, customer, market or engineering driven. While all of these have their merits within an organization and its culture, the most important focus for product management should be value. Imagine for a moment that you can look through a set of glasses and look at a list of customer requirements for your product and immediately see those requirements that will be winners while determining which will be losers.

Value is a multi-dimensional element. There is value that obviously can be delivered to your organization through revenue, but there also is the value that your customers and markets place on capabilities and products. Most organizations will look at increasing revenue and consider that to be the most important part of being value driven, but being value driven takes both of these dimensions of value into consideration. Your organization obviously needs to maximize value for itself, but it can increase that revenue if it understands what needs to be done to maximize the value delivered to customers, because they often will reward well-matched products with a premium.

The first step in becoming value-driven is market assessment that establishes which segments are most appealing for your products. The key to successful market assessments, however, is making sure that value is established of key product capabilities to the buyer, the user and your organization. Expressing value is not necessarily just value in a financial sense. It’s important to assess the market for qualitative value on whatever criteria are valued, as well as financial value.

In addition to understanding how you should approach the markets that are valuable, it is also critical that you understand how your competition approaches your market. In competitive markets, you face a constant struggle of having the needs and priorities of the market swayed by people who would prefer that you were not successful. It is important that you understand how your competition positions against you, and how successful the message is received through head-to-head wins and losses. This gives you an understanding of how well you are expressing the value you can deliver and how it is received by customers.

Automating the Tactical Work

Coming back to the example of the “magical” glasses that can show you winners and losers, this is achieved by becoming value-driven. With information about the value of each requirement, aggregated by each product opportunity, you have the ability to pick the winners and losers with much more confidence.

Today, tools are available for product managers that help automate the requirements gathering, reporting and analysis so these individuals have time to spend on more critical, strategic activities. These software solutions facilitate making these value-based decisions as simple as putting on a pair of magical glasses. For example, one company uses a software solution to capture requirements from internal and external stakeholders and categorize them by persona and market. These requirements are then presented to the company’s customers, who are asked to rank the value and importance of each requirement on a scale so they can gauge the real value. This voting process is done using pairwise comparisons, so it makes it much easier for someone to compare two items, side by side, and then the software calculates the ranked order. By combining that information, along with market value assessments, engineering estimates and revenue projections, the product managers can quickly visualize which requirements would net the highest return.   

Companies spend millions of dollars every year to introduce new innovation techniques, increase cost-effectiveness through outsourcing and improve effectiveness of project management and resource utilization. To maximize these investments, the organizations must change their mentality from being reactive to one where the focus is on proactive understanding of the value that can be delivered to the market through the organization’s products. While tools exist to automate these processes, it is important to remember to not over-automate engineering without connecting it to the business side of the product development process. This value-driven attitude must then become part of the overall product management process, which includes both internal and external stakeholders as well as outsourcing partners.

Michael Lester is director of product marketing for Telelogic, where he focuses on product portfolio and requirements management product lines. His previous experience includes overseeing product portfolio management solutions at Pacific Edge Software and Artemis International, and various management and technical roles at Buildnet Inc. and Franklin Covey.

Telelogic, headquartered in Malmö, Sweden with US headquarters in Irvine, CA, is a global provider of software solutions for enterprise lifecycle management. Award-winning Telelogic software helps customers design, develop, and deliver innovative products, systems and software more efficiently by aligning and optimizing development lifecycles and business processes with business objectives and customer needs. Telelogic helps customers improve quality and predictability while reducing time to market and overall costs. For more information, visit www.telelogic.com.