High technology companies today bear little if any resemblance to those of the early and mid 90’s, yet the industry is largely practicing product management and product marketing the same as it did 15-20 years ago. Is it time for a new approach?
Consider the following market dynamics that have changed the industry landscape and their implications on the product management and product marketing disciplines.
Ongoing market consolidation across large, medium, and small companies has resulted in larger and more complex product portfolios.
- Convergence of Hardware & Software
Convergence of hardware appliances and software has forced traditional hardware manufacturers to differentiate what’s become a commodity with software and services.
- SaaS & Agile
Software as a service and agile development are the new norm, forcing many traditional software companies to reinvent themselves to remain competitive.
Throw in skyrocketing growth of applications and services on mobile platforms and the high technology industry is a completely different animal than it was in the 90’s.
Technology product management that was formalized in the 90’s is highly product centric, meaning most products are managed as separate entities without much regard to sibling products that target the same customers. As each product line forms its own view of the same markets, prioritizes R&D initiatives and creates product-based value propositions, the result at a company level is competition across product lines for R&D, marketing and sales resources instead of collaboration to grow revenue and market share across all product lines collectively in the best interest of the company.
Is it Time for a New Approach?
The time may be right for a fundamental shift from product-centric product management to market centric portfolio management.
The biggest benefit of portfolio management is the alignment of sales, marketing and products to a single set of priorities based on named market segments that best drive company growth and profitability as a whole (across all products) instead of a fragmented product by product approach that too often has products, marketing and sales going in different directions.
Portfolio management also simplifies execution across all disciplines because sales, marketing and product priorities are driven from a single view of each target market segment.
The implications on Product Marketing and Product Management aren’t as drastic as you might expect.
- Becomes far more strategic as it transforms into Segment Marketing and focuses first and foremost on key market segments that are most critical to overall company growth.
- Takes more ownership for growing revenue and market share in key market segments by crafting higher level value propositions that communicate the company’s strategic value to each segment complemented by product value propositions that serve as proof points.
- The mission of Segment Marketing however, remains the same as Product Marketing – to make sure the sales team has what it needs to compete and win, albeit with a strategic value story for each market segment instead of multiple product stories that communicate the same tactical benefits to everyone.
- Remains product focused and horizontally structured to ensure products and solutions have maximum leverage across market segments.
- Functions as virtual teams of portfolio managers to determine the appropriate product mix and investment ratios across all products collectively to support company growth objectives in each segment.
Market centric portfolio management offers three significant benefits to the organization.
- Assigning ownership to named market segments makes the company strategy and prioritization of product, marketing and sales initiatives much easier because it’s based on a single view of each segment.
- R&D investments will deliver bigger and faster ROI’s because priorities will fall to fewer products that have a bigger collective impact on key market needs instead of the peanut butter approach of spreading the R&D budget across all products all the time for incremental enhancements.
- Revenue will grow faster because sales and marketing initiatives will be more cohesive and encompass all relevant products positioned strategically in each segment instead of fragmented product value propositions that are generic.
If product-centric product management isn’t helping your organization reach its full potential, contact Proficientz to learn how a solutions approach to product management can accelerate your growth.