Webinar

1. ProductX.org is Hosting
Dr. Christof Ebert - Managing Director at
Vector Consulting Services

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V1.0 2014-03-28
Webinar 2. April 2014
ProductExcellence Network
Dr. Christof Ebert
Vector Consulting Services
Software Product Management –
A European Industry Perspective

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Vector Consulting Services
 … offers a comprehensive
consulting, tools and training
portfolio for optimizing technical
product development
 … with clients such as Accenture,
Audi, BMW, Bombardier, Bosch,
Daimler, Denso, ESA, Hyundai,
IBM, MAN, Porsche, SAP, Siemens,
Telefonica, Thales, Vodafone
 … is supporting clients on efficiency
improvement, processes, tools,
organizational change management
 … as a group serves companies
across the world with over 1200
employees and sales of well over
200 Mio € pa
 www.vector.com/consulting
Railway &
Transportation
IT &
Telecom
Automotive
Aviation &
Defense
Energy &
Environment
Medical &
Healthcare

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Study Author: Dr. Christof EBERT
Dr. Christof Ebert is managing director at
Vector Consulting Services.
He supports clients around the world to
sustainably improve product strategy and
product development and to manage
organizational changes. Prior to that, he
held global management positions for ten
years.
Dr. Ebert serves on a number of advisory
and industry bodies, teaches at the
University of Stuttgart and Sorbonne at
Paris, and has authored several books
including his most recent book “Global
Software and IT” published by Wiley.
christof.ebert@vector.com www.vector.com/consulting

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Agenda
Motivation
Industry Benchmarks
Summary and Recommendations

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… Understanding Markets – Europe
 What do customers really expect?

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Need for Software Product Management
Software Product Management is the management of a software-
driven product (incl. solution or service) over its life cycle with the
objective of generating the biggest possible value to the business.
The product manager acts as an “embedded CEO”
 Takes accountability for the product’s success en to end
 Understands market needs and positions the product
 Defines business case, gets money to invest and delivers ROI
 Launches and oversees various projects
 Positioned in middle management
 Exhibits strong strategic and operational skills
 Reaches his objectives without direct line organization
The Product Manager is the champion
who wants the product's success and will reach it.

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Agenda
Motivation
Industry Benchmarks
Summary and Recommendations

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Situation – Europe
 Software product management is of increasing relevance to
actively lead a product throughout its life-cycle
 Different role patterns across companies
Product Life
Cycle
Marketing
LeaderSupport
“Embedded
CEO”
“Product
Marketing”
“Product
Owner”
“Product
Adminis-
trator”

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Benchmark – Companies
 Representative Companies had been selected for this benchmark
 B2B solution and product business on a global scale
 Critical systems in ICT, energy, medical, industry systems
 25% have each over 100,000 employees world-wide
 Rest has each over 1,000 employees
 Mapping of the companies to their major industries
IT; 42%
Services; 8%Embedded; 25%
Systems; 25%

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Key Results – Role (1/2)
 Vision
 58% of companies have vision that a product manager is end-to-end
responsible for success of the product.
 Reality
 Only 33% are actively implementing this vision.
 Today, the position of product management varies across companies and
often inside a company, from being part of R&D or marketing to being
the business manager with P&L responsibility for a product.
 The role of “product manager” increasingly evolves towards solutions,
i.e., demanding more needs focus, and creating individually tailorable
products with services
 Other roles such as project manager have much clearer definition and
roles.
 42% have actually P&L responsibility delegated to the product managers.
 Vast majority of a product manager's effort is for managing an existing
product, and not for new products and innovations.

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Product management introduction degree
Performance measurement
 All companies measure product managers based on annual targets, such
as sales or growth.
 Mostly objectives are shared within a product team.
 All who empower the product manager, measure P&L as KPI.
Key Results – Role (2/2)

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Key Results – Industry Specific Needs in Europe
 Culture impacts
 Europe is heterogeneous: UK is not representative
 Adopt to the local culture: When it Rome, behave like the Romans
 Consider organic boundaries: Different countries behave different
 Market research
 English communication works not generally
 Understand market-specific behaviors
 Visit local fairs
 Development practices
 Iterative, agile is growing
 Waterfall still dominant, especially in embedded systems and large consortia
 Relevant legal constraints
 Many flavors of local legislation
 IPR is protected locally and with EPO (European Patent Office)
 Privacy plays a high role, especially in Germany, Scandinavia

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On the Environment and Success Factors
Source: Product manager from industry/energy segment who felt that the organic decision-making
and processes hinder his company in getting faster
“Traditionally we have had no consistent definition of product
management. Product management was part of development; or
marketing. Sometimes it happened – and more often not.
“This has been changed recently to leverage product management.
“Recently some product managers influence budget and determine
roadmaps. This is a big step for us, coming from a patriarchic
organization culture.
“There are several obstacles related to our grown culture. Most critical is
that product managers stay in their own environment. Thus no fresh
ideas come in. Innovations happen too late. There is a lot of
perfectionism to achieve high technology requirements, which lead to
high effort and duration. We have overly long agreement processes to
get all stakeholders on board.
“External support helps to grow the competence while at the
same time challenging our product management team and their
product strategies.

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Agenda
Motivation
Industry Benchmarking
Summary and Recommendations

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Vector Highlights for Product Management in Europe
 Consider the European specific aspects of product management
 Culture impacts
 Market research
 Development practices
 Relevant legal constraints
 Vector proposals
1. Systematically prepare product management expansion
2. Respect the cultural variety across markets
3. Think market and segment, not country
4. Prepare for specific target markets and industries
5. Consider legal constraints and their variability
Vector Consulting Services has profound experiences with product
management, product strategy and necessary change management

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Quote from a Client
Source: BU VP from ICT, Systems industry who had successfully introduced a standardized role and
business process for product management. She faced a big business benefit from this change.
“Product Management has a pivotal role for us. They are the glue
that brings together Operations, Marketing and Engineering. Product
Managers must have a 360-degree view of their company's operational
activities while keeping a strategic view on product opportunities and
strategy.
“Given these responsibilities, product manager skills sets are diverse,
comprehensive and challenging. And the investment to development of
these skill sets is a priority.
“We have placed a high value on identifying and communicating the role
and then develop our product management teams.
“We have seen a clear return on investment in product
management, which is concretely documented in a growing and
profitable revenue stream. We have seen the benefits of product
management in terms of reduced delays and faster product acceptance
in the market.
“The benefits of investing in our product managers competence building
has far outweighed the cost.

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General Overview
Global Software and IT
Christof Ebert
Second extended Edition, Wiley, 2012
Pre-order discount: http://bit.ly/cSjZgD
Summary of the author’s first-hand
experience and expertise, this book
offers a proven framework for global
software engineering.
"This book stands out as the best
source of information on distributed
software development. Seldom do we
see a book with the concepts
completely backed by industry
experiences and views. Software
developers and managers benefit from
the broad case studies."
S M Balasubramaniyan, Vice President,
Wipro Technologies

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V1.0 2014-03-28
 Contact us – We would be happy to support you!
Phone +49-711-80670-0 www.vector.com/consulting
Fax +49-711-80670-444 christof.ebert@vector.com