Lecture 17 Sjaak Brinkkemper Garm Lucassen 1 Juni 2017 Software Product Management Organizational Structure and Productization Lecture 17 Sjaak Brinkkemper Garm Lucassen 1 Juni 2017

Outline Organizational growth and structures Positioning the product manager Productization from a service firm to a product business

Growth phases Phase 1 Startup Phase 2 Survival Phase 3 Success Phase 4 Expansion Phase 5 Optimal Size Large Small Age of the organisation Young Grown From: Churchill, N.C. en V.L. Lewis (1983), The five stages of small business growth, Harvard Business review, May-June, pp 30-50.

Characteristics of phases Startup: first release, first customers, arranging company Survival: second release, getting more customers, hiring first employee, create cashflow Success: more customers, exposure in market Expansion: redefining the company, hiring personnel, internationalization, company exit strategy Optimal: customer satisfaction Most startups Fosbury, Nubiko, Eitri AFAS, Quinity, Mendix Planon, TomTom Exact, Unit4

Structuring an organization 6

Structuring an organization 7

Structuring an organization 8

Baan R&D Department Acquisitions Product Management Release Management Processes Finance/Legal HRM Common Architecture Research BaanTech Workflow Common Technologies ERP Service& Project E-ERP BackOffice Applications Financials CRM Supply Chain Application Integration Emerging Applications Configuration Management Product Testing Multi-Byte Product Assembly Documentation and Training Business Intelligence Localizations Product Delivery Chief Technology Officer Acquisitions The organizational structure of Baan R&D Department in 1998; 1500 employees

Organizational structures Organizational structures are needed because Growing organisations need functional specialists Management has limits in numbers Categories: F: Functional HRM, Development, Sales, Marketing, … P: Product ERP, Middleware, BIS, Localizations, … M: Market Large accounts, SME, Public, Banking and Insurers, … G: Geografic Benelux, Nordic, UK, France, …

Standard F-structure Board R&D Marketing Sales Services Support

Investments and profits Board R&D Marketing Sales Services Support + - S - + Profit:

Substructures Board R&D Marketing Sales Services Support P-structure Generic, P-structure P-structure P-structure P-structure G-structure M-structure

P-type for R&D R&D mgr Product 1 Product 2 Product 3 Product 4 Architecture Board Product Management R&D departments are responsible for a product line Product Management: Functional responsibility Liaison with Marketing Architecture Board Technical responsibility Interfacing of products

Discussion What is the stage of your assignment company? Do you have insight in their organizational structure?

Outline Organizational growth and structures Positioning the product manager Productization from a service firm to a product business

Position product management The positioning of Product Management determines Responsibilities Activities External and internal communications Five positioning scenarios Within R&D: as overall function When functional integration of products is essential Within R&D: inside product development teams When products are relatively independent Within Marketing When customer value and market presence are important Partly within Marketing and partly within R&D When customers have complex technical requirements Under the Board When CEO/CTO are heavily involved in product functionality

Organizational variability Board R&D Marketing Sales Services Support Product 1 Product 2 Product 3 Quality & Delivery Product Management Product Management Product Management Marketing Communication Product Management

Discussion What is the position of the product manager in your assignment company?

Outline Organizational growth and structures Positioning the product manager Productization from a service firm to a product business

Introduction on Productization Productization: from project/customer driven to product/market driven business IT Service firms have difficulty managing product business Project: billable hours, project acquisition Product: market share, next release launch Spin-off of Acision from Logica Earlier study Productization from within one company (Artz et al. 2010) Research question To what extent is the productization process applicable in an IT service firm when transforming from developing customer specific software solutions to standard product software for a market?

Generic view on productization

Towards product organization No Product Organization Customized Standardized

Research approach Invitation by IT service company Case study: theory testing 7 products selected from candidate set Literature background Semi-structured interviewing Determination of initial position Gap analysis Advise to case study firm Overall findings

Productization process Independent projects Reuse across projects Product recognition Product basis Product platform a. Customizable product (enterprise solution) b. Standard product (packaged mass-market) Artz et al (2010)

Productization Process 2/2 Two end stages: For some software there is a need for customization in order to integrate software in a customer-specific situation Aspects of productization (Hietala et al., 2004) - Product market - Concepts - Benefits - Positioning - Selling - Marketing Degree of standardization adopted from Hoch et al., 1999

Literature: Dimensions of Productization

Focus dimensions Dimensions Customized software Standard software Customized software project Standard software product Business focus Meeting the customer needs within budget and time, contractual fulfillment Gaining market share Requirements gathering Gathered from one customer Gathered from whole market Requirements selection Select requirements per project (More or less fixed list of requirements) Optical selected subset of requirements Marketing goals Interaction, relationship and networks Product, price, place and promotion (4P’s), branding and differentiation Software development philosophy Waterfall SCRUM agile development Lifecycle One release, then maintenance Several releases based on market requirements Development teams Project focused, people are assigned to multiple projects Product-focused, self-managed, Involved in the entire development cycle Stakeholder involvement High external, barely internal High internal, low external

Productization process Independent projects Reuse across projects Product recognition Product basis Product platform a. Customizable product (enterprise solution) b. Standard product (packaged mass-market) Artz et al (2010)

Stage 1: Independent projects Independent relations between projects. Project Portfolio Customer Project 1 Customer Project 2 Customer Project 3 Customer Project 4 Software Custom features Software Custom features Software Custom features Software Custom features Maintenance Maintenance Maintenance Maintenance Delivery Delivery Delivery Delivery Requirements Engineering Requirements Engineering Requirements Engineering Requirements Engineering Stage 1: Independent projects Independent relations between projects. Projects differ in budget, technology, and functionality

Stage 2: Reuse across projects Focus on feature reuse across projects Project Portfolio Customer Project 1 Customer Project 2 Customer Project 3 Customer Project 4 Customer Project 4 Software Custom features Software Custom features Software Custom features Software Custom features Standard features Standard features Standard features Standard features Maintenance Maintenance Maintenance Maintenance Delivery Delivery Delivery Delivery Requirements E ngineering Requirements Engineering Requirements Engineering Requirements Engineering Stage 2: Reuse across projects Focus on feature reuse across projects More custom than standard

Stage 3: Product recognition Shared features between projects Product Portfolio Portfolio management Customer Project 1 Customer Project 2 Customer Project 3 Customer Project 4 Software Standard features Software Standard features Software Standard features Software Standard features Custom features Custom features Custom features Custom features Maintenance Maintenance Maintenance Maintenance Delivery Delivery Delivery Delivery Requirements Engineering Requirements Engineering Requirements Engineering Requirements Engineering Stage 3: Product recognition Shared features between projects More standard than custom Introduction of portfolio management

Generic product platform Introduction of product roadmapping Product Portfolio Portfolio management Customer Project 1 Customer Project 2 Customer Project 3 Customer Project 4 Software Standard features Software Standard features Software Standard features Software Standard features Product Roadmapping Custom features Custom features Custom features Custom features Maintenance Maintenance Maintenance Maintenance Delivery Delivery Delivery Delivery Requirements Engineering Requirements Engineering Requirements Engineering Requirements Engineering Stage 4: Product basis Generic product platform Introduction of product roadmapping Customer specific maintenance

Stage 5: Product platform Increasing generic product platform Product Portfolio Portfolio management Customer Project 1 Customer Project 2 Customer Project 3 Customer Project 4 Software Standard features Software Standard features Software Standard features Software Standard features Product Roadmapping Custom features Custom features Custom features Custom features Releases Releases Releases Releases Delivery Delivery Delivery Delivery Delivery Customer Requirements Customer Requirements Customer Requirements Customer Requirements Requirements Management Stage 5: Product platform Increasing generic product platform Introduction of requirements management Requirements gathering based on market trends Event based customized releases per customer

Stage 6a: Customizable product software Product Portfolio Portfolio management Customer Project 1 Customer Project 2 Customer Project 3 Customer Project 4 Software Standard features Software Standard features Software Standard features Software Standard features Product Roadmapping Custom features Custom features Custom features Custom features Releases Releases Releases Releases Release Planning Launch & delivery Launch & delivery Launch & delivery Launch & delivery MarketRequirements Market Requirements Market Requirements Market Requirements Requirements Management Stage 6a: Customizable product software One standard product with small additional customized layer Introduction of release planning Structured standardized releases Customer requests are handled as market requirements Product software aiming at selling services

Stage 6b: Standard product Product Portfolio Portfolio management Market Product Customer Project 1 Customer Project 2 Customer Project 3 Customer Project 4 Product Standard features Product Standard features Product Standard features Product Standard features Product Roadmapping Releases Releases Releases Releases Release Planning Launch & delivery Launch & delivery Launch & delivery Launch & delivery Market Requirements Market Requirements Market Requirements Market Requirements Requirements Management Stage 6b: Standard product One generic product for all customers and build for a specific market Introduction of release planning Structured standardized releases Software is completely configurable Product software aiming at selling licenses

Case studies 7 theory testing case studies Varying interviewees Service perspective (project mgr, delivery mgr) Potential products Market sector Product A Telecom market Product B Telecom, Transport and Utility Product C Local government Product D Utility firms Product E Oil Companies Product F Product G

Requirements management SPM Maturity Matrix Focus area 1 2 3 4 5 6 7 8 9 10 Portfolio management Market analysis   A B C D E Partnering & contracting Product lifecycle management Product planning Roadmap intelligence Core asset roadmapping Product roadmapping Release planning Requirements prioritization Release definition Release definition validation Scope change management Build validation Launch preparation F Requirements management Requirements gathering Requirements identification Requirements organizing

Requirements management Maturity results Focus area Advanced (2) Emerging (5) Avg(%) Portfolio management 21,9 14,2 16,4 Product planning 19,3 15,3 16,5 Release planning 45,6 24,7 30,7 Requirements management 41,7 22 27,6

Discussion Language and vocabulary problems due to service versus product perspective SPM maturity assessment interpreted differently: make SPM more SMART Service firm finds Productization difficult due to different business model and culture Focus on IP creation and buy-out

Conclusions Validation of productization process Immaturity of product business inside a service business Many advises for service company to arrange product teams But then the IT service firm got acquired …

Questions?