Digital products are different! Are they?

In IT, we develop digital solutions for more than 50 years. Hence, why do so many people act as if digital products were something completely new? This slide deck pursues that question.

First, it briefly discusses the inevitably connected topic of digital transformation, tries to figure out what a digital product is and to detect the commonalities between all the different flavors of digital products.

Then, understanding that it is not IT that makes digital products "different" but their typical context, the slide deck explores how to tackle digital product development under the given conditions best. It discusses the effects of uncertainty (a typical basic condition of digital products) and how to tackle them. Then it briefly touches how to get user feedback and shortening the feedback loops (both needed to address uncertainty).

Finally, it discusses quality, a topic of many debates in that context - based on the product lifecycle and the different needs and demands of the various lifecycle phases. The slide deck closes with a short remark regarding API design, a topic that becomes more and more relevant in the context of digital products.

As always, the voice track is missing. But I hope, the slide is still useful for you ...

Transcript

1. Digital products are different! Are they? Understanding the challenges of digital product development Uwe Friedrichsen – codecentric AG) – 2017-2022
2. Uwe Friedrichsen Works @ codecentric https://twitter.com/ufried https://www.speakerdeck.com/ufried https://ufried.com/
3. What is a “digital product”?
4. Doesn’t that have to do with digital transformation?
5. What is “digital transformation”?
6. Probably the bullsh*t bingo word of the decade
7. 1st wave of digitization Digitization of business processes (Automation of business processes) • Started 40+ years ago • Peak 20+ years ago • Today mostly completed Customer Employee IT Need Need IT IT IT IT Employee Employee Employee Employee Business support systems Business offering (supplier driven)
8. Customer IT Need Need IT IT IT IT Business offering (supplier driven) Business support systems 2nd wave of digitization Digitization of business offerings (IT becoming integral part of business offerings) • Started 20+ years ago • Peak now
9. Customer IT Need Need IT IT IT IT Business offering (supplier driven) Business support systems 3rd wave of digitization Customer need driven business offerings (Dissolving domain boundaries) • Started 5+ years ago API API API API API Business offering (customer driven)
10. Digital transformation • IT gradually widened its range and influence • Support processes • Customer interface and interaction (e-commerce, mobile, ...) • Full revenue streams (API, platforms, ...) • Ongoing process, far from being completed • IT and business have become inseparable • Dissolving domain boundaries drive companies out of their traditional business domains
11. Business and IT are the same side of the the same coin. The other side are the market and your customers.
12. What is a “digital product”?
13. Beats me ... ;)
14. Can be a physical product or service augmented with an IT solution think, e.g., app-augmented Bluetooth headphones
15. Can be a physical product or service based on an IT solution think, e.g., Lieferando or DoorDash
16. Can be a purely digital offering with a UI think, e.g., Spotify
17. Can be a purely digital offering without a UI think, e.g., Stripe
18. Are there any commonalities?
19. Commonalities of digital products • Software is an integral part of the business offering • Or even the only part of the offering
20. Commonalities of digital products • Software is an integral part of the business offering • Enters a market of over-supply • Users decide about the success or demise of the product
21. Commonalities of digital products • Software is an integral part of the business offering • Enters a market of over-supply • Often novel offering • Users cannot tell you upfront what they will like
22. Commonalities of digital products • Software is an integral part of the business offering • Enters a market of over-supply • Often novel offering • Success cannot be “planned” upfront • Value of decisions can only be understood after the fact
23. Commonalities of digital products • Software is an integral part of the business offering • Enters a market of over-supply • Often novel offering • Success cannot be “planned” upfront • Uncertainty will be your companion • Better make it your friend
24. How can we tackle digital products?
25. Let us make a big plan a.k.a. the 12-month MVP
26. Does not work!
27. Let us go “Agile”
28. Source: Heart of Agile, https://heartofagile.com/ Could work ...
29. Source: SAFe, https://www.scaledagileframework.com/ ... but usually it does not
30. Problem: Long feedback loops are bad for tackling uncertainty
31. Tackling uncertainty
32. Internally controlled Externally controlled Effort spent Units produced / Output The effect of uncertainty Under uncertainty we cannot predict upfront which kind of performance we are going to produce Idle performance No value Value-adding performance Creates value Value-reducing performance Destroys value
33. Uncertainty means you cannot predict the value that will result from your effort
34. Every feature is a bet against the market
35. Under uncertainty you do not maximize value by optimizing efficiency of efforts (a.k.a. cost efficiency), but by detecting and cutting idle and value-reducing performances as soon as possible
36. The higher the uncertainty, the shorter the feedback loops with the users must be Reduces the probability of wasting lots of money with idle and value-reducing features
37. How can we tackle digital products?
38. Hypothesis-driven development 1. Create a hypothesis regarding the effect of an effort 2. Do smallest action suitable to measure an effect 3. Measure effect and evaluate hypothesis a. Further develop hypothesis if expectations met b. Drop hypothesis otherwise (optionally pivot) 4. Repeat
39. How do we get user feedback?
40. Gathering user feedback • Implement business metrics • Track user behavior • Respect GDPR • Augment with traditional techniques (e.g., user interviews)
41. How can we accelerate our feedback loops?
42. Try DevOps ... in its original meaning (see, e.g., https://itrevolution.com/the-three-ways-principles-underpinning-devops/)
43. Market capability teams (plus optional platform teams) Autonomy (decentralized responsibility) Control via purpose (vision, goals, constraints) Cloud native (Microservices) Continuous Delivery Heterogeneity Cloud & Serverless Resilience (incl. chaos engineering) Automation & Observability Mastery Measure outcome (not output) Beyond budgeting (and BetaCodex) Flow (batch size 1) Lean EAM Continuous improvement T-Shaped people (being empathetic) DevOps Quick feedback loops (OODA loop) Curiosity ... but be aware that it will trigger a lot of additional change
44. DevOps triggers change • Organizational change • Capability teams, platform teams, etc. • see Team Topologies * * https://teamtopologies.com/
45. DevOps triggers change • Organizational change • Technology change • Cloud – with self-service! • Infrastructure as Code • Compliance as Code • Security as Code • ...
46. DevOps triggers change • Organizational change • Technology change • Process change • Products, not projects • Beyond budgeting * • Continuous learning • ... * https://bbrt.org/
47. DevOps triggers change • Organizational change • Technology change • Process change • Architecture change • Small, functionally independent units • Domain-driven design or alike • Dependability, observability, ...
48. DevOps triggers change • Organizational change • Technology change • Process change • Architecture change ... and more
49. Do not try to code faster, try to code smarter Implement fast feedback loops and detect idle and value-reducing performances faster
50. You will not be able to build digital products effectively if you are not willing to change the way you do things
51. But what about quality?
52. You need quality ... in varying dosages
53. Understanding the product lifecycle
54. The manager’s trilemma ...
55. Good Fast Cheap Optimizing for quality and cycle times will result in higher costs Optimizing for quality and costs will result in long cycle times Optimizing for cycle times and costs will result in reduced quality You may pick two
56. ... can be used to describe a digital product lifecycle
57. Good Fast Cheap Extract Expand Explore 1 Digital Product Lifecycle
58. Explore (discover) • Find product-market fit • Speed and cost-efficiency are king • Most ideas, i.e., code will be dropped • Just enough quality to not distort user feedback
59. Good Fast Cheap Extract Expand Explore 1 2 Digital Product Lifecycle
60. Expand (grow) • Paying customers use the solution • Speed and quality are king • Quality in terms of dependability is a must • Sweet spot of DevOps
61. (Truth is: You will cycle between explore and expand in this phase)
62. Good Fast Cheap Extract Expand Explore 2 3 Digital Product Lifecycle
63. Extract (harvest) • Maximize profit • Cost-efficiency and quality are king • Default mode of most IT departments • Sweet spot of “Enterprise-scale Agile” • Phase usually very short for digital products
64. Addendum: API-based products
65. APIs are like GUIs: If they suck, your users will reject your product
66. AX is the new UX AX: API Experience (see, e.g., https://speakerdeck.com/ufried/getting-api-design-right)
67. Summing up
68. Summing up • Digital product means IT is an integral part of the offering • Usually accompanied by lots of uncertainty • DevOps is your friend • But be aware of the resulting change • Mind the product lifecycle – no “one size fits all”
69. Digital products are familiar and novel at the same time
70. The future is already here – it's just not evenly distributed. ― William Gibson
71. Uwe Friedrichsen Works @ codecentric https://twitter.com/ufried https://www.speakerdeck.com/ufried https://ufried.com/