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PRODUCT SOFTWARE DEVELOPMENT Method engineering focuses on Product Software and Information Systems development methods. Product software is defined as software with accompanying materials which is sold in a particular Market . Examples of product software are ERP software, Office Software and Software Development tools. This article is about portfolio management for new ''software'' products. PORTFOLIO MANAGEMENT How should a company invest its product development Resources effectively? And how should it prioritize its development projects and allocate resources among them? These are crucial issues in new product portfolio management. A company who is able to optimize its R&D investments will have success in the future. Portfolio management is a critical management challenge for three reasons: ''Firstly'', a successful new product effort is fundamental to business success. This translates into portfolio management: the ability to select projects today that will become new product winners tomorrow. ''Secondly'', new product development is the manifestation of the strategy of the enterprise. One of the most important ways for a company to operationalize its strategy is through the new products it develops. If new product initiatives are wrong, either the wrong projects or the wrong balance between projects, the company fails at implementing its strategy. ''Thirdly'', portfolio management is about allocation of the company’s resources. The goal of a company should be to create value for the Shareholders . Technology and Marketing resources simply are too limited to waste on the wrong projects. The consequences of poor portfolio management are clear: A company spills the limited resources and as a result does not give deserving projects a chance. Much research has been done to discover the reason of new product success: Research (Cooper et al., 2000) has led to many reasons, including Stage-Gate® methods and portfolio management tools. Studies on why new products succeed show that there are ten Critical Success Factors : PRODUCT LINING Portfolio management is linked with Product Lining . Product lining is the marketing strategy of offering several related products individually (Ardis, M., Daley, N., Hoffman, D.M., Siy, H. and Weiss, D., 2000). A line can comprise related (software) products of various functionalities, qualities or prices (Brownsword, L. and Clements, P., 1996). Line depth refers to the number of product variants in a line. Line consistency refers to how closely related the products that make up the line are. STAGE GATE® PROCESS How can a company build these success factors into a new-product plan? Companies are incorporating the ten success factors in the form of a Stage-Gate® {Link without Title} process (Figure 1). A Stage-Gate® process is a conceptual and operational road map for moving a new-product project from idea to launch. It is a widely employed product development process that divides the effort into distinct time-sequenced stages separated by management decision gates. Multifunctional teams must successfully complete a prescribed set of related cross-functional tasks in each stage prior to obtaining management approval to proceed to the next stage of product development. The stages are where the action occurs. The players on the project team undertake tasks to gather information needed to advance the project to the next gate or decision point. Stages are cross-functional: There is no R&D or marketing stage. Rather, each stage consists of a set of parallel activities undertaken by people from different functional areas in the company, working in a team and led by a project team leader. To manage risk via a Stage-gate® method, the activities in a certain stage must be designed to gather vital information - technical, market, financial, operations - in order to reduce the technical and business risks. The process is based on incremental commitments, making each stage more expensive than the preceding one. As uncertainties decrease, more expenditures are allowed to be allocated. The five stages are: In a company process the details of each stage reveal a complex set of activities. The table below provides a detailed list of activities in a stage. The Meta-process Model is shown in Figure 2 on the right. Meta-process modeling focuses on and supports the process of constructing Process Models; in this case the Stage-Gate process model. The process model depicted below illustrates the order of the activities from the activity table. Preceding each stage is a gate or a Go/Kill decision point, shown in the process model above. Gates are central to the success of a new-product process because:
Gates have a common format:
Several concepts, all of them deliverables, play a role in the Stage-Gate process. These concepts with explanation are depicted the table below. The concepts can be linked with the meta-process model, which results in the process data model depicted in Figure 3. DOMAIN AND APPLICATION ENGINEERING Recently several organizations have promoted the idea that systems should be developed using domain analysis to generate a domain-wide model of requirements, followed by a domain-wide architecture, followed by domain-applicable software components. This activity is called Domain Engineering . A complementary activity, application engineering, then takes place to produce the requirements document, design, and software components for a specific member of the family. Application engineering can be linked to product lining, when various similair software products are created from domain-applicable software components. These software products can form part of the portfolio, if found feasible in the Stage-Gate® process. REFERENCES
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