1. 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

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

4. 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

5. 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

6. Structuring an organization6

7. Structuring an organization7

8. Structuring an organization8

9. 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

10. 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, …

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

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

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

14. 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

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

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

17. 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

18. 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

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

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

21. 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?

22. Generic view on productization

23. Towards product organization
No Product Organization
Customized Standardized

24. 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

25. 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)

26. 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

27. Literature: Dimensions of Productization

28. 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

29. 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)

30. 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

31. 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

32. 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

33. 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

34. 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

35. 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

36. 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

37. 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

38. 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

39. 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

40. 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

41. 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 …

42. Questions?