Product Planning: Overcoming
the Controversies
September 2004 - BEK Best Practices Newsletter
What are the most controversial processes
in your company? It is likely that the product planning
process ranks right up there.
Everyone wants and believes that they should
have a major hand in new product definition and the strategy
for the upcoming year. The Product Marketing, Product Management,
Engineering teams and the executives, to name a few, all
will have significant contributions that will make a product
and an overall strategy successful. With all these interested
parties, it is important to have a process that will help
you decide which ideas to incorporate into your overall
product strategy.
The following process is a series of steps
that work well for most companies in the product planning
process.
Input
First and foremost, you must gather input about the product,
its features and, most importantly, its benefits. You also
need to ask about applications. How will the product or
service be applied, and what kind of results can customers
expect? (Learn more about input in "The
Golden Rule: Listen to Customers" and "Understanding
Your Competitive Landscape").
You need to pose these questions to a wide
audience including:
- Customers
- Sales
- Engineering
- Support
- MarketCompetition
It is unlikely that there will be a shortage
of new product ideas. The hard part is narrowing the list,
prioritizing and figuring out where you will get the most
return on investment! And consider the possibility of ending
the life of a current product or products to make room for
new ones.
Determining
ROI Criteria
Remember that the most important criteria for your company
is return on investment. The top ideas that you select must
either have broad market appeal (within your current market)
or enable you to tap a new market. Narrowing the list of
ideas will depend on your company objectives. Questions
to ask include:
- What, if anything, are we doing to get into new markets?
- Are we responding to requests from our existing customer
base?
- How are we getting ahead of the competition?
- Are we playing catch up? Will this bring us even with
the competition?
- Do these enhancements make our products more supportable?
- Are we reducing our cost of goods sold?
- To what extent are we improving the overall quality
of the product?
Narrowing your list of ideas is challenging but remember,
most companies struggle because they don't have a balanced
product plan that includes something from each of the above
areas.
Refining Ideas
- The Product Opportunity Document
Once you have narrowed your list, you need to refine some
of the more exciting and promising ideas. In order to get
your product idea funded, you need to compile some basic
information. This preliminary document, the Product Opportunity
Document, helps define the opportunity and will later be
expanded in a Market Requirements Document (MRD).
- Product description - you need to provide enough information,
so the product can be easily described in a sentence or
two. In short, this should be your first elevator speech.
It should include:
- Who buys the product?
- What is the business problem that you are solving?
- What is the value to the customer?
- Why is the product better than the competition's,
or are you playing catch-up to the competition?
- Market justification - in this section, you discuss
why the company should build or buy this product. Which
type of customer needs it? Why? How much will they buy?
Be sure to include rough estimates of market numbers and
sales projections. If you can include the same information
for competing products, your estimates will be much stronger.
- Resource projections - developing new products and features
requires people, processes, and technology. You need to
collaborate with Engineering to get a rough estimate of
what resources will be needed to develop the product.
Engineering will likely be nervous about giving estimates,
as they don't like agreeing to a schedule for a product
that is not well-defined. Make sure they know that you
are working on preliminary numbers and timelines in order
to get the product funded, and that the real schedule
will be defined once the product has been specified.
We don't recommend that you complete a full MRD before
the new product or features are approved. Instead, focus
on the Product Opportunity Document. To do the research
and work required to complete a full MRD before the product
is approved wastes the product manager's time.
Getting Products
Approved
Once you have all of the key information, you need to get
the product approved. It is best to do this in a product
planning meeting where all of the stakeholders are present.
That way they all hear the same information at the same
time (and you only have to present it once). The meeting
provides a great forum for collaborative discussion. Open
discussion and participation will create greater clarity
and buy-in upfront, making the development process so much
smoother.
Once a product is approved, it should go on
an Approved Projects List or Plan of Record that can be
published in a central location where it is accessible.
The list or plan should be updated regularly.
Clarifying Marketing Requirements
Once the product is approved you can add the detail to the
requirements in a Market
Requirements Document (MRD). Here, you'll describe specific
features and how they will solve business problems as well
as how the customers will use the product. The more detail
you can provide the better as the document is used throughout
the company.
Development
Starts - Finally
At last, you are done with product definition, and development
starts. You have passed a major milestone, and now you are
headed for the next. Once the MRD is complete, Engineering
will begin writing Functional Specifications and potentially
create a prototype. During this time, they will ask very
detailed questions and clarifying questions that are probably
not addressed in the MRD. It is imperative to work extremely
closely with Engineering. They have great ideas, will take
your product definition to the next level of detail, and
bring life to your product idea.
Applying these steps will take much of the
controversy out of your product planning process.
We'd love to hear about your product planning
successes and places where you've learned. You can email
these and other comments to .
Next month's topic:
Running a Successful Product Planning Meeting
For more information, contact BEK Enterprises
at:
Web: www.bekteam.com
E-mail:
Phone: 720-304-3300
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