Peter Artz, Inge van de Weerd, Sjaak Brinkkemper & Joost Fieggen Productization Transforming from developing customer-specific software to product software

Agenda - Research trigger - Related literature - Research question - Productization process Stages - Productization approach - Validation - Conclusion - Discussion & future research - Questions

Research trigger 1/2 Software companies - Usually start with developing customer-specific software - Eventually they recognize a need to start creating a product for a market Transform - Such transformation is difficult to carry out - Involves the change of a great number of internal processes - Requires an other approach for marketing and sales - The organization needs change from customer-driven to market-driven approach Available literature - Barely any literature available on how to perform such a shift - Improving product management processes (Software Process Improvement) - Differences between customized and standardized software development

Research trigger 2/2 Software Product Management (SPM) - Is getting more and more attention - Companies recognize the importance and benefits - Widely and extensively studied topic Inspiring example organizations: - Microsoft - SAP

- Reference framework for SPM (Weerd et al. 2006) Related literature

Research background MP Objects - Software vendor for supply chain systems - Located in Rotterdam and New York - Small sized company - 60 customers and around 1250 users Software - One big customer - Now they want to enter a market

Research question Main research question: - How can organizations transform from developing customer-specific software to product software? Focus: On software product management domain

Research approach Guidelines from Hevner et al. (2004), combined with the design science model from Vaishnavi & Kuechler (2007) Design science guidelines

Custom vs. standardized software AreaCustomized software……Standardized software Measure of successSatisfaction, acceptance, ROI...…Sales, profit, market share, good product reviews Lifecycle of products One release, then maintenance……Several releases, dependant on market demand Requirements origin Elicited, analyzed, validated……Invented by market pull or technology push Distance to usersUsually small and more involved with development ……Usually large and less involved with development Requirements specification Used as contract between customer and supplier ……Verbally communicated and managed individually Identified differences: -20 differences as a result of literature study (A couple of the identified differences)

Productization Process Definition: The transformation process from customer-specific software development to a standard software product Trigger for transformation: - Internal trigger to change to a software product. Customized software Standardized software 1: Independent projects 2: Reuse across projects 2: Reuse across projects 3: Product recognition 3: Product recognition 4: Product basis 4: Product basis 6a: Customizable product 6b: Standard product 6b: Standard product 5: Product platform 5: Product platform

Stage 1: Independent projects Projects are executed independently Projects differ in budget, technology, and functionality

Stage 2: Reuse across projects Focus on feature reuse across projects More custom than standard features

Stage 3: Product recognition Shared features between projects More standard than custom features Customer specific maintenance

Stage 4: Product basis Generic product basis Customer specific maintenance Customer requests are handled as market requirements

Stage 5: Product platform Focus on generic product platform Requirements gathering based on market trends Event-based customized releases per customer

Two end stages: For some software there is a need for customization in order to integrate software in a customer-specific situation “Degree of productization” (Hietala et al., 2004) - Product market - Concepts - Benefits - Positioning - Selling - Marketing Productization Process 6a and 6b adopted from Hoch et al., 1999 Degree of standardization

Stage 6a: Customizable product One standard product with customized layered part Structured releases Customizable software product Software business aiming at selling services

Stage 6b: Standard product One generic product for all customers and build for a specific market Structured releases Configurable software product Software business aiming at selling licenses

Case study – Productization approach 1/3 In which stage should we start? Should we focus on stage 6a or 6b? Customized software Standardized software 1: Independent projects 2: Reuse across projects 2: Reuse across projects 3: Product recognition 3: Product recognition 4: Product basis 4: Product basis 6a: Customizable product 6b: Standard product 6b: Standard product 5: Product platform 5: Product platform

Case study – Productization approach 2/3 Determining initial position

Case study – Productization approach 3/3 Gap analysis & identification of recommendations

Validation approach Expert interviews - Interviewed five experts from Dutch organizations - Evaluation of acceptance and recognition Survey - Filled in by eight participants of a course on SPM - Wide variety of Dutch organizations - Examine the structure for static qualities (complexity and readability) Case study - Business case at MP Objects - Evaluation of applicability and usability of the productization process in a business environment

Validity threats Construct validity - Covered by using multiple sources of evidence for the data collection - While carrying out business case, viewpoints of developers and consultants were combined External validity - For the exploratory interviews and validation interviews, we combined the gathered results of the scientific field with the gathered results of the business field - Results of the validation process are verified with references from the literature before they were applied Reliability - A special approach is defined for the implementation of the productization process - All other relevant information and conclusions are documented so that the results can be replicated

Conclusion Main research question: How can organizations transform from developing customer-specific software to product software? Productization process - Describes the from developing customer-specific software to product software - It can assist organizations in becoming a product software business - The adoption of the reference framework for SPM

Discussion & future research More validation for the productization process - More (long term) case studies need to be carried out - Future validation is required to determine the validity and applicability of the stages Other areas which change during such transformation - The change in marketing & sales Open Source software - Study how open source software influences the productization process adopted from Xu & Brinkkemper, 2005

Questions

Thank you for your attention! Productization Transforming from developing customer-specific software to product software

References Hevner, A. R., March, S. T., Park, J., & Ram, S. (2004). Design science in information systems research. MIS Quarterly: Management Information Systems, 28(1), pp Bekkers, W., Weerd, I. v., Brinkkemper, S., & Mahieu, A. (2008). The Influence of Situational Factors in Software Product Management: An Empirical Study, Proceedings of the 2008 Second International Workshop on Software Product Management, pp Weerd, I. v., Brinkkemper, S., Nieuwenhuis, R., Versendaal, J., & Bijlsma, L. (2006a). On the Creation of a Reference Framework for Software Product Management: Validation and Tool Support. Proceedings of the 1st International Workshop on Product Management, Minneapolis/St. Paul, Minnesota, USA, pp Weerd, I. van de, Brinkkemper, S. (2007). Meta-modeling for situational analysis and design methods. To appear in the Handbook of Research on Modern Systems Analysis and Design Technologies and Applications, Idea Group Publishing, USA: Hershey. Weerd, I. v., Bekkers, W., & Brinkkemper, S. (2009). “Developing a Maturity Matrix for Software Product Management”, Technical report: UU-CS The Netherlands: University Utrecht. Xu, L., & Brinkkemper, S. (2005). Concepts of product software: Paving the road for urgently needed research, Proceedings of the 1st International Workshop on Philosophical Foundations of Information Systems Engineering (LNCS), Springer: Berlin, pp Vaishnavi, V., & Kuechler, B. (2007). Design Research in Information Systems. Retrieved May 7, 2009, from: AISWorld Net,