Introduction
Enterprises across industry verticals are facing disruption from digital native businesses delivering
digital products and
services that better meet customer needs. Digital transformation has become imperative, and enterprises have
accelerated digitizing their business
value chain and products to remain competitive.
Figure 1: McKinsey & Company
[1]
The first phase of IT-enabled business transformation, during the 1960s and 1970s, individual automated
activities in the value chain, from order processing
to computer-aided design and enterprise resource planning. The second phase of IT-enabled business
transformation, during the 1990s, was driven
by internet-enabled coordination and integration across individual activities. Even as the business value
chain was transformed, creating new business models,
the product remained unaffected.
In the third wave of IT-enabled business transformation, during the 2000s,
IT became an integral part of the product itself. Products are embedded with sensors and
processors for connecting and exchanging data with
other devices and systems software. Digitizing products drives tremendous product functionality and
performance improvements and creates new revenue streams
for companies. As digital products become ubiquitous across different spheres of our lives, and the value of
embedded technology within physical products
increases, companies need to accelerate innovation to maintain revenue growth and profitability for which
enterprises are leveraging digital product engineering.
What is digital product engineering?
Digital product engineering is an integrated process that combines software, IT hardware, and embedded
technologies to design and develop digital products. Digital
product engineering practices apply not only to the technology industry but to other industries such as
automotive, pharmaceutical, life sciences, and more.
Digital product engineering solutions help you overcome challenges to transform your legacy products to the
demands of the digital world by using the latest
development trends such as Agile and DevOps methodologies.
What are the phases of digital product engineering?
There are five main phases of digital product engineering, though it may vary from company to company.
- Ideation
This is the first phase when a product idea is discussed and debated extensively in customer
requirements and likely features that will meet the requirements. Design
thinking is used to refine product ideas and create specifications for a minimum viable product (MVP).
According to research by McKinsey[2], 44%
of digital reinventors say their companies use design thinking at scale.
- Design
The design phase in digital engineering represents the evolution of a product from concept to design
that covers
digital
experience design, key features, and navigation. This is a crucial phase, considering that UI/UX
plays a vital role in adopting digital products.
- Prototyping / Minimum Viable Product (MVP)
Prototyping refers to using digital tools to create a replica of products that can be evaluated in test
environments to verify performance.
An MVP is created with basic features testing with early users whose feedback is used as a benchmark to
refine the design before product development begins.
- Product development
Once the product design is finalized after prototyping or testing the MVP, the product development
begins, which follows an agile development methodology
centered around an iterative process. Product releases occur in shorter cycles that enable companies to
update functionality to respond quickly to market requirements.
- Reengineering
After the product is released, significant upgrades are made to ensure it stays competitive and meets
new customer demands.
How does digital product engineering accelerate innovation?
Incumbent companies across industry verticals are under pressure to develop innovative products and services
to drive organic growth quickly with increasing disruption
across business segments by digital-native companies. The incumbents find themselves hampered by rigid
sequenced processes, siloed organization structures, and legacy
innovation practices that have not kept pace with the current market's demands. Digital product engineering
will help you mitigate these challenges, accelerate
innovation, and achieve significant digital transformation results to optimize cost.
- Shortened product innovation and development cycle
Speed to market is of great essence in the digital economy, characterized by a winner-takes-all
approach. The ability to innovate faster to tap into
new business opportunities while competing with data-driven digital disruptors is critical for success.
Digital product engineering helps you quickly launch good products with some rough edges, which
contrasts with the traditional method of
launching completely developed products. The new approach leverages agile methods, A/B testing to
constantly improve products and
frequently release new versions by incorporating customer feedback, thus staying ahead of the curve.
- Product development process overhaul
Traditional product development following a linear sequential model is reengineered to create a flexible
process that aligns with
the iterative development practices of the agile model. The reengineered process helps improve quality
and reduces delivery timelines and cost.
- Innovation to create new revenue streams
Digital
product engineering services not only help take products to market faster but also create new
revenue streams through digital
solutions while simultaneously solving customer problems, thereby creating a win-win scenario. Heavy
machinery company Caterpillar
has sensors fitted to its machines connected to the cloud. The sensors constantly send data to the
cloud, which are analyzed
to monitor the health of machines and if they require any change of parts. The monitoring services have
created a new,
small but growing revenue source.
Besides, the companies also get good quality, cost reduction, and
fast turnaround times.
How can you leverage a partnership to augment your internal capabilities?
Many companies want to expand their products and services by building and leveraging digital
business solutions, but a lack of in-house product innovation capabilities and technical expertise
is their biggest challenge. Product innovation in the
digital economy requires process reengineering and expertise in emerging technologies such as Artificial
Intelligence, IoT (Internet-of-Things), which may not be feasible for all
companies. Large companies have acquired companies that specialize in digital engineering to build their
capabilities. Besides the inorganic route, you have the option
to partner with a software product engineering services provider to augment your digital product innovation
capabilities. As a trusted product engineering company,
Nous Infosystems has used its digital product engineering expertise to help traditional companies and
independent software vendors (ISVs) with business innovation and product development.
For more information, get in touch
with us.
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