Business Intelligence Network - The Vision for BI and Beyond

Leveraging the Next Generation of Requirements Management Solutions for Greater Profitability

What Every Software Company Must Know

Published: December 14, 2006

René Bellei discusses requirements management solutions.

Software companies have long focused on greater development efficiencies through the implementation of software tools and processes that enable them to get products to market faster, in a more directed and accountable fashion, and therefore at a lower cost. However, for these efficiencies to yield top line and market share growth, these companies must continually establish the right product functionality mix to address the needs of the evolving markets they target.

Requirements management solutions, particularly those that are designed for the software product management process, are rapidly increasing in popularity as they allow software companies to operate like other data and research-intensive industries that determine functionality through active feedback. They are also instrumental in helping companies avoid spending millions of dollars developing products that may or may not meet a specific market need.

The Right Product, at the Right Time, for the Right Market
Many challenges can easily distract software companies and cause them to develop requirements that miss the mark. There is an ever-growing list of issues that contribute to this distraction, including the globalization of markets, increases in communication media, a growing competitive landscape, the demands of client specification and the constantly changing technology landscape. These sources of information can cloud the establishment of key functional products.

Born from development requirements management and customer-relationship management (CRM) solutions, requirements management solutions that are designed specifically for software product management have emerged as a new breed of integrated software. More specifically, these software product management solutions are designed to streamline the data gathering and clarification processes of market feedback, while maximizing the time spent on identifying patterns of use, requirements research and strategic product release management.

Aligned with other trends in business intelligence solutions, this type of requirements management software follows best practices that unite the key areas that interact with product management including clients, sales teams, development and delivery personnel so that software organizations can maximize their productivity, profitability and overall competitiveness.

Honing Product Management
Product management, a key function in any software organization, is responsible for converting customer and market data into the key requirements that balance and prioritize product road maps. Product management teams typically find themselves spending an enormous amount of time on routine data management upkeep, and this prevents them from spending more time on strategic activities that would otherwise enable products to be better balanced across all market needs.

Although part of a key planning function, many product management teams are often armed with inadequate tools such as Excel and Word, or software that was not originally built for this purpose. The use of such tools actually hinders the organization’s ability to engage collaboratively in the context of how stakeholders operate – often leading to the creation of different versions of the same planning information.

Fortunately, requirements management solutions enable software product management teams to greatly reduce these inefficiencies by incorporating a host of different users and input perspectives. By encouraging the transparent involvement of all parties at each stage of the product planning process, these new solutions increase the percentage of requirements that are built correctly and used successfully by end users. Additionally, this enables software product management teams to allocate time to more strategic functions such as scenario-testing product road maps, improving the scope and balance of product releases, and keeping an eye on profitability.

Profit in the Balance
Successful software companies maximize their window of opportunity and create market leads that force their competitors to play catch up. However, a fine balance exists between the drivers for investing in new business areas, innovating within current markets and satisfying existing customer segments. The correct balance must be struck between an overwhelming number of competing needs, especially because many companies find that the time spent collecting the supporting data comes at the expense of establishing the optimal set of requirements.

All too often, the intent, priority and scope of features and requirements are not fully understood or communicated – and the consequences can be devastating. For example, without a clear understanding of features, expectations can be miss-set with stakeholders, development costs can increase and product delivery can be delayed – all of which results in less usable, less needed and ultimately less profitable products.

According to codecomments.com, “The conventional model of software cost exponentially grows from requirements gathering to system testing. An issue that you may fix for just $1 at requirements gathering may turn into $1,000-$10,000 worth fix at system testing.”

The costs of rectifying poor products lie not just in the cost of redevelopment, but in the loss of market confidence that can result in lost sales, client references and overall profitability. By involving a broader set of stakeholders in the software product management road map and by establishing a solid product management process, many of these revenue and cost effects can be addressed and avoided at the onset.

A TopTeam Analyst from http://www.technosolutions.com/ was recently quoted as saying, “Poor requirements are the primary cause of many project failures. In fact, several studies have shown that omissions, errors or misunderstandings in requirements can cost more than 100 times to fix when a system is deployed, as compared to identifying and fixing them when the system is in the requirements phase.”

It Takes a Village to Develop a Profitable Product
Product management teams need to involve numerous individuals, both internally and externally, to determine product direction and incorporate feedback. This typically involves the negotiation between several parties to ensure that needs (sales, marketing, client requests, support, etc.) are balanced with constraints (finances, development resources, technology renovation, etc.).

The process of engaging with, and taking into consideration, each need and constraint is best achieved with an open and transparent solution that engages each individual in the manner in which they operate. Today, product management teams no longer operate independently, but rather as a shared function across all stakeholders in order to promote greater corporate-wide efficiencies.

Further, software companies must be able to collaborate effectively with stakeholders in any corner of the world, keeping the big picture in check, while making certain that corporate goals are met. Using enterprise-based product management software, contributors no longer have to reside under the same roof – never mind the same time zone.

The Road Map to Profitability
While a software product management team’s core mission is to deliver products that customers want and are mapped to the advancing corporate strategy, they typically find themselves measured indirectly by items that are out of their control, such as release timings and revenue numbers.

It is for this reason that product management groups must provide clarity and transparency when communicating requirements, and provide defensible road maps that present clear choices, tradeoffs and options to the executive and management teams.

The profitability of the product or portfolio of products is a key measurement of success. Maximizing this potential is, in turn, influenced by the effectiveness of road maps, clarity of stakeholder and market needs, and correct requirement sets – items that are greatly clarified with the use of requirements management tools that are designed specifically for the software product management community.