The  cost  of  developing  digital  products    

   We can say that every brand nowadays – up to a certain degree – has digitized part of their processes. Whether in the digital product development business, or it’s designing an ecommerce shopping experience for online and/or mobile apps, or bringing supply chain management capabilities to tablets in a warehouse or simply maintaining a website for investor relations. However we do not know much about the digital product development processes from industry to industry and across organization sizes. What does product development actually look like in the trenches? How does building products differ among organization sizes? Therefore Alpha UX has surveyed more than 100 product managers to answer these questions and more. 4 outcomes stand out from the survey” 1. Enterprise has caught up, but at a cost When it comes to product management, it’s quite common for enterprises to adopt methodologies first championed by smaller, more nimble companies. The first outcome is that startups and SMBs don’t get their products to market any faster than large organizations.  

   

   Before perceiving that enterprises could be suddenly as nimble as startups, the reader has to consider a key other point: (without comparing the actual products that were built) it’s impossible to know if startups are shipping X-times faster code than their enterprise counterparts in the same timespan. Further key point: speed-to-market comes at a hefty cost, as organizations get larger.    

 

 So while large organizations no longer spend years to get products off the ground, it’s not necessarily efficiency that has enabled them to move faster. It’s larger budgets and investments in digital. 2) Product managers are getting their hands dirty! Investments in digital products have at times translated into massive in-house capabilities. More than 80 percent of product managers Alpha UX surveyed reported doing the heavy lifting internally, with most teams involving more than two engineers.    

   While this doesn’t necessarily mean that product managers need to be expert software engineers, it does mean that they have a much deeper understanding of technology and development methodologies. After all, the top tools product managers reported using all involved project management, code deployment, or product documentation:    

   

 

3) Budgeting hasn’t evolved much. Only a few companies leverage the differences between digital and physical product development to budget more efficiently.      

       More companies together have no defined process, don’t budget, or use a ‘best guess’ than companies that budget iteratively. This is unfortunate because digital products can be tested and validated iteratively, enabling product teams to gain feedback and fold it into a new version as they go. Being able to budget iteratively is critical for allocating resources and even being able to kill a product or feature without wasting resources when it becomes apparent that users don’t want it. 4) A ton of products fail “Fail forward” isn’t just an empty mantra. A whopping 40 percent of our respondents reported recently launching a failed product and were willing to talk about it (there could be many more who weren’t willing to discuss). The overwhelming sentiment from those who failed was that a lack of adopting new methodologies was the driving cause behind the failures. One respondent summed it up:

While mastering best practices and methodologies is critical for product managers, it’s just as if not more important to get your organization to buy-in.  For more interesting findings from our survey, check out the full report:  http://info.alpha-­‐ux.co/benchmarking-­‐digital-­‐product-­‐development-­‐costs-­‐2015      Image credit: Shutterstock