What is special about software as a product?
Kittlaus: Software is a non-material product that differs from classical consumer goods in that it is subject to numerous changes over its life cycle, and its manufacturing and logistics processes are of less importance. The real central task of a product manager for software is to manage requirements: based on feedback from customers and a few other sources such as market studies or customer interviews, the product manager determines the additional features required in the product, and evaluates and groups together these requirements in order to monitor how they are implemented in new development projects. The time from when these customer requirements are recorded to when they are implemented is a decisive factor for customer satisfaction and thus for long-term business success. In an enterprise that uses software, it also makes sense to have a software product manager, who manages the solutions so that they contribute as effectively as possible to the company’s success. In an ideal scenario, the software product manager is the person responsible for commissioning all activities relating to the development and/or acquisition of software, and is therefore also the person responsible for financing, for the content and acceptance of results, and positions software – as a product – in enterprise planning in such a way that resources are made available for it.
What is software product management?
Kittlaus: The management of software as a product involves similar tasks to those in the management of products in many other industries: positioning the product on the market, performing market and requirement analyses, ensuring the product strategy harmonizes with the enterprise strategy, identifying and guaranteeing competitive advantages, controlling marketing tools, sales and distribution, contracts, support and planning. However, the particular qualities of software also mean there are specific things to consider and focus on.
Who are the target readers of your book?
Kittlaus: My co-authors and I have drawn on our many years’ experience on the manufacturing, user, and consulting side to develop a comprehensive approach to software product management that is beneficial for manufacturers and users alike. Our book is therefore intended not just for managers at software manufacturing companies, but also those at companies that use software. There was previously no all-encompassing work on the subject of product management for software, either in German or English. While software manufacturers have been implementing product management for some time, it is new territory for the users.
How should users carry out software product management?
Kittlaus: They must position the relevant software products and services in their own company. The company’s own IT department – be this external or in-house – must win through as the “preferred supplier” in the company by ensuring that the purchased or company-developed software has a good image. Thus the marketing strategies of manufacturers and users have the same aims (co-marketing). The IT experts can explain the economic advantages of a coherent, long-term IT strategy to senior management, and emphasize the beneficial effects to the users – and they should not give in to the temptation of always prematurely procuring new, alternative solutions. Like Odysseus, they should tie themselves to the mast and block their cohorts’ – or users’ – ears to ensure they resist the seductive advertising calls from ever new Sirens. In future, users’ IT organizations can get to grips with business and technical challenges more effectively if they manage their software better.For providers of outsourcing or ASP services or for external IT departments, in particular, the coordinated management of requirements is of primary importance, but it should also be aligned with the strategy of the parent company. It has proven effective to appoint a person with escalation rights for the requirements management process, the success of which can be gauged by the degree of user satisfaction.
What have software users been doing wrong up to now? After all, many already use IT portfolio management
Kittlaus: In recent years, companies have been too one-sided in focusing on costs, which has meant that they have only considered very short periods of time. However, it has been shown that enterprise software has a very long life – often 25 years or more. For IT organizations, this software is a real asset, that is to say it has long-term value, and it must be managed with a view to what comes after the current release. The term “portfolio management” comes from the world of finance, and basically refers to the rough allocation of funds with regard to an asset portfolio. In the area of software, this approach makes sense as part of enterprise controlling, that is, for the question of how much money the company wants to invest in a particular software product or development project. However, we do not believe this approach is suitable for a more detailed level of controlling. A decision on which requirements are to be implemented in a new product release can be made much more effectively on the basis of systematic requirements management.
Why is requirements management of such central importance for software?
Kittlaus: According to a study by the Standish Group, insufficient requirements management, or more specifically insufficient inclusion of users, incomplete or changing requirements, and unrealistic expectations were the most common reasons for the failure of software projects. Requirements should therefore be accurately specified and documented, and requested changes prioritized for future product development. Here, the project manager is up against conflicts between sales, development, and project management that are caused by changing requirements. The project manager makes a record of requirements from various sources, groups them together and evaluates them according to their business relevance. In subsequent steps, the project manager analyzes the requirements from a business and technical perspective, and monitors their implementation. If necessary, he or she must ensure that important changes are also taken into account during development. Project management tasks therefore include quality assurance, implementation management, and change management.
To what extent will IT remain a factor to enhance competitiveness, in your opinion?
Kittlaus: Needless to say, a company’s competitiveness is not enhanced if the porter has a 19 inch ultra-modern TFT screen instead of an old 15 inch dinosaur. The things that are more important are the effectiveness of the business processes, employees’ skills, and the design of the interface with the customer. In a survey, Erik Brynjolfsson from the MIT Sloan School of Management found that the combination of organizational changes (automation of routine tasks, decentralized decision-making processes, improved information flow, training) and innovative IT solutions led to increased productivity in over 1,000 US companies participating in the survey.
Today, investment in innovations is starting to see renewed growth. Thus while the venture capital flows in the area of IT were much lower in 2002 than in the boom year of 2000 in the United States, they were far higher than in 1998. Technological advances such as Web services or grid computing offer new ways for software users, manufacturers, and outsourcing service providers to work together. As standardization increases in these areas, new ways of sharing work in development and production will be possible. For example, software users could be provided with an interesting business model in the form of provider Web services.
For more information see the following book: Hans-Bernd Kittlaus, Christoph Rau, Jürgen Schulz: Software-Produkt-Management, Springer Verlag, Heidelberg 2004. Up to now, the book is available only in German.