Inbound and Outbound Product management in Europe by Dr. Christof Ebert

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Dr. Christof Ebert - Managing Director at Vector Consulting Services

© 2014 . Vector Consulting Services GmbH. All rights reserved. Any distribution or copying is subject to prior written approval by Vector.

V1.0 2014-03-28

Webinar 2. April 2014 ProductExcellence NetworkDr. Christof EbertVector Consulting Services

Software Product Management –A European Industry Perspective

© 2014 . Vector Consulting Services GmbH. All rights reserved. Any distribution or copying is subject to prior written approval by Vector. V 1.0. 2014-03-28.

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Vector Consulting Services

… offers a comprehensive consulting, tools and training portfolio for optimizing technical product development

… with clients such as Accenture, Audi, BMW, Bombardier, Bosch, Daimler, Denso, ESA, Hyundai, IBM, MAN, Porsche, SAP, Siemens, Telefonica, Thales, Vodafone

… is supporting clients on efficiency improvement, processes, tools, organizational change management

… as a group serves companies across the world with over 1200 employees and sales of well over 200 Mio € pa

www.vector.com/consulting

Railway &Transportation

IT & Telecom

Automotive

Aviation & Defense

Energy &Environment

Medical &Healthcare


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Study Author: Dr. Christof EBERT

Dr. Christof Ebert is managing director at Vector Consulting Services. He supports clients around the world to sustainably improve product strategy and product development and to manage organizational changes. Prior to that, he held global management positions for ten years. Dr. Ebert serves on a number of advisory and industry bodies, teaches at the University of Stuttgart and Sorbonne at Paris, and has authored several books including his most recent book “Global Software and IT” published by Wiley.

[email protected] www.vector.com/consulting


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Agenda

Motivation

Industry Benchmarks

Summary and Recommendations


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… Understanding Markets – Europe

What do customers really expect?


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Need for Software Product Management

Software Product Management is the management of a software-driven product (incl. solution or service) over its life cycle with the objective of generating the biggest possible value to the business.

The product manager acts as an “embedded CEO” Takes accountability for the product’s success en to end Understands market needs and positions the product Defines business case, gets money to invest and delivers ROI Launches and oversees various projects Positioned in middle management Exhibits strong strategic and operational skills Reaches his objectives without direct line organization

The Product Manager is the champion who wants the product's success and will reach it.


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Agenda

Motivation

Industry Benchmarks



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Situation – Europe

Software product management is of increasing relevance to actively lead a product throughout its life-cycle

Different role patterns across companies

Product Life Cycle

Marketing

LeaderSupport

“Embedded CEO”

“Product Marketing”

“Product Owner”

“Product Adminis-trator”


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Benchmark – Companies

Representative Companies had been selected for this benchmark B2B solution and product business on a global scale Critical systems in ICT, energy, medical, industry systems 25% have each over 100,000 employees world-wide Rest has each over 1,000 employees

Mapping of the companies to their major industries

IT; 42%

Services; 8%Embedded; 25%

Systems; 25%


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Key Results – Role (1/2)

Vision 58% of companies have vision that a product manager is end-to-end

responsible for success of the product.

Reality Only 33% are actively implementing this vision. Today, the position of product management varies across companies and

often inside a company, from being part of R&D or marketing to being the business manager with P&L responsibility for a product.

The role of “product manager” increasingly evolves towards solutions, i.e., demanding more needs focus, and creating individually tailorable products with services

Other roles such as project manager have much clearer definition and roles.

42% have actually P&L responsibility delegated to the product managers. Vast majority of a product manager's effort is for managing an existing

product, and not for new products and innovations.


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Product management introduction degree

Performance measurement

All companies measure product managers based on annual targets, such as sales or growth.

Mostly objectives are shared within a product team.

All who empower the product manager, measure P&L as KPI.

Key Results – Role (2/2)


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Key Results – Industry Specific Needs in Europe

Culture impacts Europe is heterogeneous: UK is not representative Adopt to the local culture: When it Rome, behave like the Romans Consider organic boundaries: Different countries behave different

Market research English communication works not generally Understand market-specific behaviors Visit local fairs

Development practices Iterative, agile is growing Waterfall still dominant, especially in embedded systems and large consortia

Relevant legal constraints Many flavors of local legislation IPR is protected locally and with EPO (European Patent Office) Privacy plays a high role, especially in Germany, Scandinavia


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On the Environment and Success Factors

Source: Product manager from industry/energy segment who felt that the organic decision-making and processes hinder his company in getting faster

“Traditionally we have had no consistent definition of product management. Product management was part of development; or marketing. Sometimes it happened – and more often not.

“This has been changed recently to leverage product management.

“Recently some product managers influence budget and determine roadmaps. This is a big step for us, coming from a patriarchic organization culture.

“There are several obstacles related to our grown culture. Most critical is that product managers stay in their own environment. Thus no fresh ideas come in. Innovations happen too late. There is a lot of perfectionism to achieve high technology requirements, which lead to high effort and duration. We have overly long agreement processes to get all stakeholders on board.

“External support helps to grow the competence while at the same time challenging our product management team and their product strategies.


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Agenda

Motivation

Industry Benchmarking



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Vector Highlights for Product Management in Europe

Consider the European specific aspects of product management Culture impacts Market research Development practices Relevant legal constraints

Vector proposals1. Systematically prepare product management expansion 2. Respect the cultural variety across markets3. Think market and segment, not country4. Prepare for specific target markets and industries5. Consider legal constraints and their variability

Vector Consulting Services has profound experiences with product management, product strategy and necessary change management


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Quote from a Client

Source: BU VP from ICT, Systems industry who had successfully introduced a standardized role and business process for product management. She faced a big business benefit from this change.

“Product Management has a pivotal role for us. They are the glue that brings together Operations, Marketing and Engineering. Product Managers must have a 360-degree view of their company's operational activities while keeping a strategic view on product opportunities and strategy.

“Given these responsibilities, product manager skills sets are diverse, comprehensive and challenging. And the investment to development of these skill sets is a priority.

“We have placed a high value on identifying and communicating the role and then develop our product management teams.

“We have seen a clear return on investment in product management, which is concretely documented in a growing and profitable revenue stream. We have seen the benefits of product management in terms of reduced delays and faster product acceptance in the market.

“The benefits of investing in our product managers competence building has far outweighed the cost.


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General Overview

Global Software and IT

Christof EbertSecond extended Edition, Wiley, 2012 Pre-order discount: http://bit.ly/cSjZgD

Summary of the author’s first-hand experience and expertise, this book offers a proven framework for global software engineering.

"This book stands out as the best source of information on distributed software development. Seldom do we see a book with the concepts completely backed by industry experiences and views. Software developers and managers benefit from the broad case studies."S M Balasubramaniyan, Vice President, Wipro Technologies

© 2014 . Vector Consulting Services GmbH. All rights reserved. Any distribution or copying is subject to prior written approval by Vector.

V1.0 2014-03-28

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Inbound and Outbound Product management in Europe by Dr. Christof Ebert

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