Stop Creating Your Solutions with a New Product Development Methodology

mq1Picture this scenario – you’re a Product Development Manager or Director at a large B2B company, and you’ve just been asked to develop a new “solution”.   Instead of being asked to design an upgrade or add new features or functionality to a single product, you’re now responsible for integrating two or more separate hardware products, multiple software applications, and at least 3 separate professional and support services into a broad solution that your customers will pay handsomely for.   What do you do?  Will the Stage Gate development method still suffice?   Should you adapt the Waterfall model since there is software embedded in the solution?  What’s the best approach for an experienced product development manager to successfully design, develop and launch such a complex solutions offering?

Solutions Insights, a B2B consulting and training firm that specializes in assisting companies to develop, market, and sell high-value solutions, recently conducted a benchmark survey on issues related to the new solutions development process.  The survey was taken by nearly 75 companies that are in the solutions business.   The majority of these companies indicated that they generate more than $1 billion in annual revenues.

In order to ensure that the survey participants are providing similar data that can be aggregated and compared, we asked them if they shared our perspective of what a “solution” is.   Our definition is:

A combination of products, services, and intellectual property focused on a customer business problem or opportunity that drives measurable business value and can be significantly standardized. The solutions components can be from either the vendor and one or more of its partners, and the solutions implementer can be the vendor, the partner, the customer or a combination of the three.

Of the 73 companies that responded, 80% of them were totally aligned with our definition.

What were the results of the survey?   What did Solutions Insights find out in terms of how some of the best companies in the world create new, complex solutions?   Here are some of the findings:

  • Solutions are real, and growing in importance – In general, the survey respondents indicated that solutions have grown at least 3-5x in importance over the past 5 years, and this trend will accelerate over the next 5 years. They also indicated that they’re counting on solutions to be the prime engine for revenue growth in the near future. The reasons they cited were similar to what we’ve seen and heard in the past – increased commoditization of their product lines, increased complexity in the customers’ business environments, and interest from both the vendors and customers to create more long term, beneficial relationships.
  • Start thinking in terms of a new solutions development (NSD) process instead of a new product development (NPD) process -- Most companies that have a standardized development process have concluded that the traditional NPD process doesn’t work when dealing with solutions. The complexity of multiple products, services, and stakeholders simply overwhelms the NPD. While the NSD process is essentially founded upon the well-known NPD process, it’s much broader and robust in scope. An experienced solutions developer affectionately referred to the process as “the NPD process on a boatload of steroids!”
  • The biggest hurdle in developing new solutions is getting people inside the organization to “play nice” together – according to the marketing professionals who took the survey, the biggest barrier to creating successful solutions is getting different BU’s and corporate units to collaborate and share the resources needed to meet the NSD process objectives. Once again, we’ve learned that technology and process aren’t the problem, it’s us – the people who need to be involved and contribute! Every BU, geographic unit, partner and reseller has its own business pressures and finite resources that they can leverage to meet their performance objectives. Getting them to contribute budgets, key staff personnel, and any other hardware, software and process IP can become a monumental challenge.
If you’re interested in learning more about what to do – and what not to do – in order to develop new solutions, here are a couple of resources for you:

Remember – while products, services and solutions are managed within the same portfolio and may share some IP and other assets, they are unquestionably different animals.   If you want them all to succeed and thrive in their respective markets, you need to understand their differences and tailor how you create, market and sell them.   The first major step in being a successful solutions company is to use an NSD process, tailored to your unique business characteristics and offerings.

Interested in getting more information about how to create new solutions, and what to do to get your product developers skilled and capable of handling solutions? Give us a call or send us an email.  We’ll share with you our ideas and experiences of how to create the right NSD blueprint, and how to transform superb product developers into outstanding solutions developers.

Contact us at: www.solutionsinsights.com, shurley@solutionsinsights.com or at 781-686-1607

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