Lawrence De’Ath, Head of Product & Technology at Digital Works Consulting gives his perspective on the challenges faced by big businesses when developing successful new digital products.
Sophie: What do you see as the specific challenges in digital being faced by big businesses?
Lawrence: Digital is new for many successful larger businesses. They are starting to realise that to compete, digital is not just a ‘bolt on’ – it’s a transformation.
Common issues we are seeing are:
1. Digital is different
Digital runs on IT but it doesn’t run like many internal business system
2. Digital development is different
It may look like print media – but the development needs are very different, and needs to be approached in a different way
3. Digital: it’s personal
Critically, how customers engage is different with digital; it’s unpredictable because customers are closely coupled to the “Digital Product”
Sophie: Often when we think of successful digital companies, we think of agile start-ups, but does this mean that big businesses should adopt the same methodologies?
Lawrence: The start-up community is so dominated by digital because they can create their business model from scratch – they have no legacy systems – and with no historic commitments to meet. Equally start-ups have no established customer base or reputation – this gives them more freedom.
In many cases start-ups have nothing to lose – that’s why they are disruptive to markets.
This might not suit larger businesses as they often want to continue their corporate journey – which is what brought them success in the first place. That history brings fantastic knowledge embedded in internal systems or loyalty in historic connections.
Adopting digital benefits from a learning and adaptive approach because good solutions often have elements which are “new to the world”. This means that customer reaction is unpredictable and it doesn’t make sense to leap-in with a large scale, comprehensive solution. Start-ups know this and they innovate in a different way.
Large businesses can learn from lean or agile methodologies, where you can start with pockets of innovation and progress incrementally. The management and control of product development needs to be quite different in digital. However, that doesn’t mean firms should abandon all of their proven and valuable product development or new business creation skills.
We see digital product development as part of digital transformation for larger businesses – helping organisations to learn and adapt to managing a new technology or new ways to engage with customers.
Sophie: What do we actually mean by digital product development?
Lawrence: Digital product development has changed hugely over many years. Software as an example has changed more than any other in the last 10 years. It started as programming, in the same way that jewellery design started as a craft.
Bespoke jewellery may still be designed and built by craft jewellers but producing a repeatable product to a budget that each customer will cherish needs a wholly different approach. It involves more people, in more places with everyone connected and each doing a more specialist job than the multi-skilled jeweller.
Digital product development has been through the same cycle. The “digital revolution” has changed how products can come about – from a single multi-skilled craftsperson to specialist teams making focussed, skilled contributions. Start-ups have been first to get it – they are great net-workers – but large firms have the resources to catch up – if they know where to direct them.
Sophie: What’s in a digital product development process?
Lawrence: As software increased in complexity, businesses put methods in place to emphasise control of development – in the expectation of getting predictable outcomes. The process was: Start with a specification so you know what you will get, plan the sequence of development, integrate the components and then test.
Digital product development still does include software development and implementation of IT, but often these are actually the more straight forward parts of the process.
Digital product development usually involves drawing on a substantial base of existing software; established internally or cloud-based platforms. There is an important task to choose which of these is appropriate for the digital product and to fit with existing business systems.
Figure 1 ‘The rush to digital’ led by technical development or a start-up approach may not suit larger firms
Digital often means that existing business systems will need to interact with the new digital product. This can be a huge transformation – sometimes more complex than the creation of a core digital product like a social media enabled website or a smartphone App. Sometimes the transformation impact is not considered until late into a digital development, perhaps even once a new product is live.
Determining the best commercial and technical fit is not a trivial task. It depends on the business model design and on the user experience, so the development process needs to start there. This is quite different to many established development methods.
Sophie: What’s the role of the development team?
Lawrence: Faster versions of old software products – or digital versions of analogue processes may not achieve the shift that businesses want and need, but this can be what you get if development teams are asked to design on their own. It sounds strange, but they can be quite cautious, equally they may just go in a direction that suits the technology chosen and develop a product that is not suitable for market.
With digital, the innovation has to happen in a different way – so the things to watch out for, to monitor and to control are quite different. In some cases all of the old processes to manage development are now irrelevant.
What’s critical is to build the right co-creation environment with marketers, product experts and technical development folks working things out together. Getting that to work is a skill in itself.
Sophie: What is critical to digital product development for digital transformation?
Lawrence: Businesses need a vision of ‘what is right in digital’ for them … this is best started with the User Experience, which is how customers interact with digital.
Steve Jobs wasn’t wrong in 1997:
“You have to start with the customer experience and work backwards to the technology”
People expect digital to be engaging and useful, and they expect this from their big brands. If a digital offer is not there, then customers will go elsewhere and tell other people. If the User Experience is wrong, then customers will be disappointed.
So all digital design has a customer or user at the centre. Beyond that the functions and systems need to work too of course, to make sure the good customer experience is maintained beyond the first contact. Here there is a role for more traditional development, and technology strategy and planning. But these designs still have to support the shift in customer experience.
Figure 2 – Even Lean or Agile digital product development can benefit from some upfront planning
Sophie: Can you give me an example of a traditional business that is successfully transforming through new digital product development?
Lawrence: There are a few well documented examples that spring to mind of traditional businesses very successfully transforming into a successful digital offer.
McGraw-Hill Education is a good one. They have successfully recognised the opportunities that exists in digital education and the need to invest strongly. They have rapidly transformed from what was a 125 year old traditional publishing business, into one that now offers ‘adaptive solutions’ with personalised digital teaching and learning environments.
Sophie: What’s DWC’s approach to helping big businesses adopt/adapt their digital product development?
Lawrence: At DWC we’ve been finding ways to help businesses adjust for digital. To evolve valuable company culture and draw on the best of their experience, but at the same time adapt to the opportunity of digital products.
Clients that we (DWC) are working with are finding out that, to get best value from new digital products, they may need to create new business models with customers at the centre.
There is technology in the change – but it’s rarely a matter of letting technology set the direction. It may mean engaging a new set of partners and ways of working, but without throwing away the good and proven parts of their customer engagement.
Businesses need to feel in control of their investment and make sure it’s working towards a clear digital vision. Critically this more about giving them a ‘roadmap with check points’ not a ‘fixed plan with milestones’. Realistically what you put down will need to flex; recognising this encourages collaborative cross-functional development of ideas and products. A roadmap helps to navigate and manage change in a direction consistent with the company aims and customer expectations.
Product & Technology at Digital Works Consulting
The Product & Technology team at DWC are experts at helping businesses adapt to digital; to grab hold of the opportunities and help you find the best fit product & technology to meet your vision, whilst solving the practical challenges and stumbling blocks that exist.
- Help with new product development & innovation
- Develop road-maps for getting there – aligning process, technology and the right teams and partners
- Provide proven, comprehensive methodologies that work regardless of industry and size
- De-risk process – budget, time and resource
For more information contact
Lawrence De’Ath on + 44 7837 283393,
Email him at lawrencede.ath@digitalworksgroup.com
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