The relatively new practice of digital product management is helping organizations better achieve their objectives by shifting to a product-focused business model, according to a new report from Dimensional Research, sponsored by Broadcom Software.

Digital product management (DPM) encompasses traditional product management, but adds continuous improvement through experimentation and validation, as well as relying on metrics such as OKRs to make informed product decisions. Across organizations, budget, teams and tasks are being connected to business objectives to better understand how their product’s performance affects the business. This, in turn, helps organizations improve productivity and efficiency.

One of the biggest hurdles facing IT – especially now that software is driving business outcomes to a huge degree – is that there remains a real lack of understanding of how business and development teams should work together.  Laureen Knudsen, chief transformation officer in the Agile Operations Division of Broadcom Software, explained: “I’m part of the Forbes councils. And they ask these questions that you answer, and you end up in a panel article.  And one of the questions that they asked was, there’s a lot of input coming to the technical teams, how do you prioritize it? And I was the only person that said, ‘You don’t, you throw it back at the business.’ Right? You get everybody in the business together, and you make them prioritize it, because that’s not my job as the technology leader. It’s the business leader, but there’s so many people that have done things poorly, all the way back to agility, that are trying to now say, this is how you do something, but it’s just a poor implementation. And it’s a lack of understanding. I thought that if Forbes doesn’t even understand where prioritization should lie, we’re in some trouble.”

Yet organizations are stepping up to deal with these issues. Focusing on company priorities for 2022, the report found that 56% of responding organizations are undertaking initiatives for delivering more customer value, followed by improved product quality at 52%. Half are focused on becoming more efficient and 40% are focused on reliable product delivery, the report said.

Knudsen said the problem is especially glaring in companies that create software not for sale but for internal use. “You need the companies, especially those that don’t sell software that they created internally, they need to know what that means from the design level and the product management level,” she said. DPM helps them focus on the importance of the software they’re creating for that internal use and how that helps deliver value to the customer – which, in this type of case, is the employee, she noted.

Organizations, she said, that are trying DPM and working through it “are actually finding that it’s really beneficial to them when they understand what their people need, and what they need to really be doing.”

As for DPM initiatives helping organizations deliver value, view it as a work in progress or just a fad, 94% stated DPM has been successful and provided value to their business, according to the report. Eighty-six percent reported that DPM helps them better connect business objectives and customer needs, while 89% stated that DPM solutions make digital transformation easier.

Shifting from a focus on software projects to software products lies at the heart of digital transformation and value stream management, which provides organizations with a view into their processes so bottlenecks can be eliminated and production can flow in a predictable manner.

The report further found that DPM adoption faces some challenges, with respondents saying the top challenge is resistance to change. Half said integrating the DPM solution with other applications and systems proved challenging. Yet 89% said despite these hurdles, their companies are adding new products to their DPM solution and process over the next 18 months. 

“DPM may be a young methodology, but as this research shows, it has very quickly proven its value to businesses that have adopted it,” Knudsen said. “DPM is not a solution looking for a problem, but rather a solution and enabler for a direction that companies have already taken.”