Two "Must-Have" Frameworks for Software Product Managers
Software product management is, without a doubt, one of the most skill-demanding and high stress disciplines in today's fast-paced era of digital transformation. From strategic management, product and roadmap strategy, pricing and offer design, product planning, product development, marketing, sales and distribution, and service and support - its no wonder the role of a Software Product Manager (SPM) demands an exhaustive list of cross-functional skills to succeed.
To successfully drive this end-to-end product delivery cycle, SPMs must master various "know how" skills that include the likes of (*take deep breath*) having a strategic and visionary approach, business and financial acumen, value-based marketing and product development mindset, influencing abilities across all levels of the organization, practical problem solving skills, (*breathe*), project and time management enforcer, mediator and therapist to many, as well as having technical and innovation prowess... to name a few.
Software Product Managers are like master Conductors, orchestrating team members and cross-functional teams through the highs, lows, and timing of a symphony to ultimately create a masterpiece for their audience.
Mini-CEO or Conductor?
To a large extent, an SPM is the company's main leader for driving software product development and can make or break a company's success. In this case, its no wonder this role is often described as that of a "mini-CEO". But it can be far from having the clout that is enjoyed by CEOs where one can say "jump" and all others quickly follow suit.
Having worked closely with the SPM community from a consulting and corporate (pricing) capacity, I've found the most successful SPMs act more as master Conductors, orchestrating team members, cross-functional teams, and individual players whilst also navigating through the highs, lows, and timing of their symphony. Alternatively, the least successful SPMs can often be trapped in the daily "fire-drills" and lack a sound discipline to co-ordinate and prioritize throughout the full end-to-end cycle of software product management. In these cases, SPMs are operating without their sheet music, mismanaging the bigger picture co-ordination of their orchestra for the main performance.
Becoming a Master Conductor in Software Product Management
Every conductor and their orchestra members have their sheet music. Likewise for SPMs, its important to have best-in-class frameworks in their toolkit as the basis for driving successful product management practices. Even for larger enterprise software companies with multiple software divisions, these frameworks can establish rigor and consistency around how SPM teams operate throughout the end-to-end activities of product management.
What are the consistent elements and criteria that go into an Executive review for business cases? What are the checklist items across each department that need to be considered at each stage of the product lifecycle? How can the organization ensure they are adequately pricing and monetizing their software using value-based (v. cost-plus) strategies? These are but a few of the questions that can be outlined within a company's SPM frameworks.
Two useful Software Product Management frameworks that should be part of the SPM toolkit include:
Framework#1: The Software Product Management (SPM) Framework
The International Software Product Management Association (www.ISPMA.org) is the leading global community around Software Product Management practices and is comprised largely of software product management members, software corporate members, marketing experts, software technical experts, academics, and consultants. The Software Product Management Framework is an often-referenced foundation for software organizations that seek to improve their company's Centre of Excellence (CoE) around product management. This framework also serves as a quick reference checklist and best-practice approach for SPMs throughout any stage of the lifecycle for their product offerings.
Additional information can be found on the ISPMA's website including details regarding a more in-depth curriculum and courseware relating to the SPM framework. If you're interested in improving your (or your company's) product management game, you may also want to consider their Software Product Management training and/or certification programs.
The Digital Pricing Framework
Imagine a scenario where 15,000 days effort is required to develop a new product release, innovation, or feature set; and as little as a few hours (0.4 days effort) is dedicated to determining the pricing and offer design strategy. Unfortunately, for many software firms, this is the reality. Guesswork around willingness-to-pay or pricing based on cost-plus becomes the norm resulting in sub-optimal, sometimes catastrophic, pricing strategies.
Those companies that do focus heavily on applying value-based pricing management practices deliver significantly better revenue, market share, and profitability compared to their competitive peers. Adobe (NASDAQ: ADBE), for example, is a company that increased their market value by 15x (as of Dec 2020) after migrating from legacy perpetual license models to well-structured cloud subscriptions starting in 2012.
Enter The Digital Pricing Framework.
Framework#2: The Digital Pricing Framework
This framework is used as a guiding tool in the SPM's toolkit for building, planning, and executing pricing & offer design strategies. Its a continuous cycle of improvement: From value-based OFFER DESIGN, to sales team and channel partner ENABLEMENT (sell the pricing strategy and linking this to the "value story"), to laser-focused in-market pricing EXECUTION (eg., deals) to drive to the desired pricing outcomes. Ultimately, the most successful pricing strategies are closely linked to the software value story with a strong understanding around product positioning across each market and customer segment.
The other consideration for this framework is the Pricing Ecosystem (PECO). Seasoned experts in developing software pricing structures are well aware of the implications of pricing across all departments of a software organization impacting everything from revenue recognition, legal, compliance, policies and guidelines, etc. This can be an exhaustive checklist, for both internal and external factors; the PECO helps to identify those key checklist items when developing a pricing strategy.
With all these considerations, its no wonder many software vendors have invested heavily in pricing expertise to support the SPM function.
Ultimately these two frameworks can be the sheet music for those who live in the world of software product management. In a role that continues to be more demanding in the digital transformation era, these tools can help bring more rigor and best practices that not only supports delivery of high-value software to one's clients, but also profitable growth for one's company.
About the Author
Scott Miller, CPA, CMA, is the founder of Miller Advisors (www.miller-advisors.com), a pricing, monetization, and offer design consulting firm with a specialty in B2B software. He is also a speaker and instructor on best pricing practices with the Professional Pricing Society (PPS) and International Software Product Management Association (ISPMA) bringing over 15 years of experience from a variety of consulting and global corporate pricing roles. Scott can be reached at email@example.com