IDC forecasts US$1.2 Trillion in worldwide spending on Digital Transformation Technologies in 2017, a 17.8% increase from 2016 spending. Of which, application development and digital products (e.g. web and mobile apps) represent the third fastest growing category after cloud infrastructure and business services. With this much investment being poured into digital projects, shouldn’t companies expect more Return on Investment (ROI)?
Through my consulting work with startups and enterprises, I notice a lack of a coherent Digital Product Strategy. Even if the organisation claims there is one, the outcomes are often tied to vanity metrics or represent an aspiration to be a copy of a product that has been developed in Silicon Valley.
There is a lot of waste generated in new digital product development to “catch-up with the times”. Resources that can be better managed through a combination of effective software development practices and strategic planning.
A digital product strategy is not a snapshot exercise and a checked line item as part of the organisation’s annual business strategy planning cycle. A digital product strategy is not only responsive but also has measurable outcomes pegged to each digital product.
If strategy is the space between vision and execution, then a digital product strategy is led by the experience and considers how technology progress, changing user preferences and competitive business realities affect what digital product is being built, how it’s being distributed and how users/customers are retained and engaging with the digital product over time.
How do you reduce waste and maximise return on investment on new digital product development?
The heart of strategy answers how success is defined from market entry to mass adoption. Most startups build products and enter markets without considering the probabilities of failure and the necessary counter-response. Without validating assumptions and planning for probable scenarios, success will be short-lived and initial failure can be hard to recover from.
Here’s a list of considerations and suggestions before crafting a digital product strategy:
- Let your Vision and Principles inform the experience build not media hype, trends or funding allocation. It’s often wiser to be a contrarian than follow the crowd. A strategy is never absolute or cast in stone and rarely considers future probabilities. By working from first principles, we know that mobile computing power and speed are increasing every year. Yet, I’ve rarely seen Moore’s Law being considered as part of a digital product strategy. Ask your teams, “How can your digital product take advantage of this technology progress to improve the experience?”
- Lead with user experience first. Find out which products need to be retired, which needs to be built through a feature comparison audit with your current digital products and your competitor digital products. Identify gaps by pooling subject matter experts in Product, UX and Software Engineering. I believe that having a user-centric and Agile mindset is everyone’s responsibility in the organisation to build better quality products. This can be better managed through organisational culture/structure, learning gaps and hiring practices.
- Retain an exciting vision but keep a measurable focus. A good digital product strategy brings focus on the choices the team can make and unlocks entrepreneurial energy within teams. I often start my consulting engagements by helping the company define its North Star Metric. It brings focus to teams and unlocks their inert entrepreneurial energy as team members suggest tactics to improve the levers they influence. A good North Star Metric is one that is measurable, contributes to revenue and can be influenced by tweaking the user experience. e.g. A standard North Star Metric for marketplaces is Match Rate. How much is the supply effectively meeting the demand? Match rates affect revenue as most marketplaces draw a commission for every successful transaction/match.
When it comes to leading this initiative in corporations, Chief Information Officer (CIO), Chief Digital Officers (CDO) or Chief Product Officers (CPO) I recommend banding together a think tank of their most entrepreneurial people together with the company’s domain experts.
For startups and smaller organisations, I recommend the Chief Executive Officer (CEO) and Head of Product to front the planning. Keep these planning groups small enough to minimise friction and large enough to solicit alignment and deliver impact quickly upon execution. Planning group composition, friction, and velocity are key.
How do you plan your digital product strategy?
Contributed by Daylon Soh
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About Daylon Soh
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