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
   

   View Slide

2. Uwe Friedrichsen
   Works @ codecentric
   https://twitter.com/ufried
   https://www.speakerdeck.com/ufried
   https://ufried.com/
   

   View Slide

3. What is a “digital product”?
   

   View Slide

4. Doesn’t that have to do with
   digital transformation?
   

   View Slide

5. What is “digital transformation”?
   

   View Slide

6. Probably the bullsh*t bingo word of the decade
   

   View Slide

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)
   

   View Slide

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
   

   View Slide

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)
   

   View Slide

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
    

    View Slide

11. Business and IT are the same side of the the same coin.
    The other side are the market and your customers.
    

    View Slide

12. What is a “digital product”?
    

    View Slide

13. Beats me ... ;)
    

    View Slide

14. Can be a physical product or service augmented with an IT solution
    think, e.g., app-augmented Bluetooth headphones
    

    View Slide

15. Can be a physical product or service based on an IT solution
    think, e.g., Lieferando or DoorDash
    

    View Slide

16. Can be a purely digital offering with a UI
    think, e.g., Spotify
    

    View Slide

17. Can be a purely digital offering without a UI
    think, e.g., Stripe
    

    View Slide

18. Are there any commonalities?
    

    View Slide

19. Commonalities of digital products
    • Software is an integral part of the business offering
    • Or even the only part of the offering
    

    View Slide

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
    

    View Slide

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
    

    View Slide

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
    

    View Slide

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
    

    View Slide

24. How can we tackle digital products?
    

    View Slide

25. Let us make a big plan
    a.k.a. the 12-month MVP
    

    View Slide

26. Does not work!
    

    View Slide

27. Let us go “Agile”
    

    View Slide

28. Source: Heart of Agile, https://heartofagile.com/
    Could work ...
    

    View Slide

29. Source: SAFe, https://www.scaledagileframework.com/
    ... but usually it does not
    

    View Slide

30. Problem: Long feedback loops are bad for tackling uncertainty
    

    View Slide

31. Tackling uncertainty
    

    View Slide

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
    

    View Slide

33. Uncertainty means you cannot predict
    the value that will result from your effort
    

    View Slide

34. Every feature is a bet against the market
    

    View Slide

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
    

    View Slide

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
    

    View Slide

37. How can we tackle digital products?
    

    View Slide

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
    

    View Slide

39. How do we get user feedback?
    

    View Slide

40. Gathering user feedback
    • Implement business metrics
    • Track user behavior
    • Respect GDPR
    • Augment with traditional techniques (e.g., user interviews)
    

    View Slide

41. How can we accelerate our
    feedback loops?
    

    View Slide

42. Try DevOps ...
    in its original meaning (see, e.g., https://itrevolution.com/the-three-ways-principles-underpinning-devops/)
    

    View Slide

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
    

    View Slide

44. DevOps triggers change
    • Organizational change
    • Capability teams, platform teams, etc.
    • see Team Topologies *
    * https://teamtopologies.com/
    

    View Slide

45. DevOps triggers change
    • Organizational change
    • Technology change
    • Cloud – with self-service!
    • Infrastructure as Code
    • Compliance as Code
    • Security as Code
    • ...
    

    View Slide

46. DevOps triggers change
    • Organizational change
    • Technology change
    • Process change
    • Products, not projects
    • Beyond budgeting *
    • Continuous learning
    • ...
    * https://bbrt.org/
    

    View Slide

47. DevOps triggers change
    • Organizational change
    • Technology change
    • Process change
    • Architecture change
    • Small, functionally independent units
    • Domain-driven design or alike
    • Dependability, observability, ...
    

    View Slide

48. DevOps triggers change
    • Organizational change
    • Technology change
    • Process change
    • Architecture change
    ... and more
    

    View Slide

49. Do not try to code faster, try to code smarter
    Implement fast feedback loops and detect idle and value-reducing performances faster
    

    View Slide

50. You will not be able to build digital products effectively
    if you are not willing to change the way you do things
    

    View Slide

51. But what about quality?
    

    View Slide

52. You need quality ... in varying dosages
    

    View Slide

53. Understanding the product lifecycle
    

    View Slide

54. The manager’s trilemma ...
    

    View Slide

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
    

    View Slide

56. ... can be used to describe a digital product lifecycle
    

    View Slide

57. Good
    Fast Cheap
    Extract
    Expand
    Explore 1
    Digital
    Product
    Lifecycle
    

    View Slide

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
    

    View Slide

59. Good
    Fast Cheap
    Extract
    Expand
    Explore 1
    2
    Digital
    Product
    Lifecycle
    

    View Slide

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
    

    View Slide

61. (Truth is: You will cycle between explore and expand in this phase)
    

    View Slide

62. Good
    Fast Cheap
    Extract
    Expand
    Explore
    2 3
    Digital
    Product
    Lifecycle
    

    View Slide

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
    

    View Slide

64. Addendum: API-based products
    

    View Slide

65. APIs are like GUIs:
    If they suck, your users will reject your product
    

    View Slide

66. AX is the new UX
    AX: API Experience (see, e.g., https://speakerdeck.com/ufried/getting-api-design-right)
    

    View Slide

67. Summing up
    

    View Slide

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”
    

    View Slide

69. Digital products are familiar and novel at the same time
    

    View Slide

70. The future is already here – it's just not evenly distributed.
    ― William Gibson
    

    View Slide

71. Uwe Friedrichsen
    Works @ codecentric
    https://twitter.com/ufried
    https://www.speakerdeck.com/ufried
    https://ufried.com/
    

    View Slide