The beginning is always a good place to start, so, what is digital product management and what does it have to do with value stream management?
Let’s have a word first from research guru Gartner, which notes that large technology companies can accelerate growth by applying more agile product management. It highlights that product teams need to respond effectively to customer experience insights, shifting pricing and delivery models, and new drivers of digital transformation across their customer base.
As customers undertake digital business transformations, such as enabling new internet of things technologies and leveraging analytics at the core of the business, product managers must extend the scope of their planning and development capabilities to assist enterprises in achieving their digital business outcomes.
Therefore, digital products and services may include ‘as-a-service’ delivery models, customer experience as an integral development feature and other new business models. More often than not, the design of these complex technology solutions will require new skills and processes as compared with single hardware or software products or services.
In a nutshell: digital product management (DPM) is an evolving set of practices intended to address the shifts occurring in technology management being caused by digitisation. Instead of one-off projects, organisations now continuously manage all the underlying components of which the digital product is comprised.
In this way, the business effectively connects the work, teams and budgets such as software, services and APIs. Rather than individual programmes or projects, enterprises receive clarity on the business outcomes, including the costs, benefits and ROI of their investments.
When viewed as part of value stream management (VSM), DPM permits businesses to fund their most valuable investments and deliver ROI to the company.
What’s coming in 2022?
As we enter 2022, many of us may feel that digital transformation is at risk of becoming a cliché, but it is important to emphasise that the principles that underpin it are anything but.
At its core, digital transformation, or digitalisation − pick your term − are processes that enable businesses to serve their customers virtually, including industries that in the past would never have considered an online presence, like dry cleaners and pizza parlours.
If the global pandemic has done nothing else, it has shown business owners the importance of digitally interacting with customers anywhere, at any time. This reinforces why the likes of the IDC predict business will be investing $6.8 trillion in digitalisation programmes by 2023.
Taking it down a level, DPM is really a story about the way people perceive spending money on technology.
As such, companies that previously haven’t spent much time thinking about technology are now increasingly investing in understanding how technology is developed, how quickly it can be integrated into their business, and how well it helps them to respond to their customers’ needs.
Digital product management is an evolving set of practices that are intended to address the shifts occurring in technology management because of digitalisation. As part of VSM, DPM allows organisations to fund their most-valuable investments and prove the ROI to the business.
Taking it down a level, DPM is really a story about the way people perceive spending money on technology. For a long time, companies would decide they needed something from the technology shop − a piece of software or a system − to accomplish a particular goal, like launching a new product or modernising HR. They would then go through a rigorous process of examining what they needed, who should work on it, what it was going to do, how much it would cost, etc.
They would then run it through multiple layers of approvals, develop a project charter and send it through one or more steering committees to get it funded. This progression could not be described as change-friendly.
With every adjustment, the process was repeated because the funding might change. It was a rigorous, onerous method that emphasised control over innovation. As companies increasingly embrace the new digital world, they are recognising that old business operations need to materially change in order to support an ever-evolving digital mode of operation and interaction with customers.
How does DPM impact the enterprise?
Regardless of the business model, the ultimate goal is to create synergy within organisations so that everyone is collaborating. This is especially true with digitalisation because it breaks down geographic barriers, enabling companies to change, monitor and integrate technology from anywhere in the world.
For example, a retail business in Europe might decide it wants to deploy a new mobile shopping experience on the continent. Instead of allowing branches in different countries to choose their own technology, plans and processes, the retailer decides it’s better to have one common experience across all countries. Once it rolls out the mobile platform, it must coordinate the various components across siloed business units. It also needs a new model for managing the investment because each branch is now investing in a co-funded operation versus just being responsible for its own.
Additionally, a mobile platform has no definitive end date. Instead, it’s an enduring asset that will last for as long as you can make it work for you. The lack of clearly delineated end lines marks a complete shift from a project-driven model to a product-driven one where you can effectively manage the company’s value streams.
However, it should be noted that moving to DPM is not as simple as changing labels. You cannot simply metamorphose project managers into product managers, nor can you say that you once funded projects but are now funding products − all the while continuing to utilise the same methodologies. The former will not do at all! Instead, you will need to recognise that real change is required.
In my next article, I will explain how DPM creates real change.
