Integrated Product Management SVPMA March 5, 2003 Darlene K. Mann, CEO Siperian
Speaker Background Personal data Sales and Marketing for 12+ years VC for 6+ years CEO for 1+ month Siperian Inc. Customer data management solutions Unique composite object technology Aware Applications offering a single point of interaction for customer-centric activities
Agenda What is integrated product management What do Board of Directors (BOD) care about? Why would product management attract BOD attention? How does product management speak to the BOD
Integrated Product Management Executive management sets the business plan Board of Directors approves business plan and oversees results Product management is key to execution of the business plan Do you understand the product assumptions driving the plan?
MarketProblemBuyerTransaction Opportunity (Discover) Business Plan Model
TechnologyProductCompanyBusiness Execution (Implement) Product Business Plan Model
TechnologyProductCompanyBusiness Vision Value Proposition Operating Model Financial Model MarketProblemBuyerTransaction Opportunity (Discover) Strategy (Design) Execution (Implement) Product Business Plan Model
What do BODs care about? Is the company operating well today? Revenue Cost Structure Profitability Will it continue to do well in the future? Market opportunities Competitive Advantage
TechnologyProductCompanyBusiness Vision Value Proposition Operating Model Financial Model MarketProblemBuyerTransaction Opportunity (Discover) Strategy (Design) Execution (Implement) Product Business Plan Concerns Problems: Missed revenue/profits indicate execution issues, if no strategic cause
Operational Problems Revenue model cannot support the necessary cost structure Customer acquisition costs too high Channel costs too high Operating expenses or COGS increase substantially (e.g. cost of labor, materials, etc.) Poor expense controls (shameful!)
TechnologyProductCompanyBusiness Vision Value Proposition Operating Model Financial Model MarketProblemBuyerTransaction Opportunity (Discover) Strategy (Design) Execution (Implement) Product Business Plan Concerns Problems: Product misalignment or market saturation create strategic issues
Value Proposition Problems Problem isnt big enough to matter Market was never big enough Market now saturated Product inadequate for problem Poor execution Poor vision Competitive price pressure Value undermined
TechnologyProductCompanyBusiness Vision Value Proposition Operating Model Financial Model MarketProblemBuyerTransaction Opportunity (Discover) Strategy (Design) Execution (Implement) Product Business Plan Concerns Problems:Market disruption creates strategic issue
Vision Problems New technologies Better, faster, cheaper Direct competitor or substitute M&A events Channel strength Product line completeness Critical mass effects
Why would Product Management attract BOD attention? Missed revenues or profitability? Inspect: Channel Direct/Indirect sales metrics Contribution across channels Product Evaluation of market opportunity Feature/functionality/fit analysis Underlying cost structures Structural changes to cost Poor management
Why would Product Management attract BOD attention? Value proposition under fire Customer adoption Competitive pressure Out-selling Better product Price pressure True cost advantage Buying share Lousy competitor
Why would Product Management attract BOD attention? Overcome by disruptive technology Industry structure change Too early
How should Product Management speak to the BOD? Financial expressions of issues Quantify it when possible Data-driven, clear about sources Explain what and how you know High level Relevant to the big issues Place/Process/Progress Where did you start, what is your goal How will you get there Where are you now
Summary From the BOD perspective, everything nets to financial performance In tough times, understanding the expected business model behavior is essential for financial success If your product line is not conforming to the model, understand why and what can be done