Digital product development is a strategy for turning ideas into products and services that add value to customers. It is a way of thinking and innovating that organizations can use to create new products and services, better engage customers and generate more revenue. Digital product development aligns with the mindset used for technology innovation – however, it’s not just about creating computer or software code as a product. It’s about making any idea into a digital product that people want to use- including tangible objects such as bikes, batteries or boxes.
Digital product development is a discipline focused on creating workable, user-friendly digital or other types of products to deliver business value. It entails the use of various methodologies, processes, tools and techniques which are best aligned to meet organizational goals and objectives.
The goal of product development is to bring new software and/or hardware products to the market in order to facilitate innovation and generate revenue for your organization. The process can be used across all industry sectors for any type of service or product you provide. Often the focus will be on getting new features developed, but it can also include redesigning existing ones such as mobile apps or website portals which drive lead generation.
According to Wikipedia: Product development is the process of transforming a idea for a product into a design and bringing it to market. This includes the design and development of new products or services, or modifications to existing ones. The need for new and modified products in an organization is generally driven by external environmental factors such as competition, customers needs/wants, regulatory requirements et al., while internal environmental factors such as financial performance, organizational restructuring, strategic plans and technological advances also drive product development initiatives. Additionally, strategic business decisions around mergers & acquisitions affect the level of effort required in your organization’s product development efforts by increasing or decreasing demand for your company’s offerings.
At its core product development is research-driven and utilizes many types of research to understand customer needs, market conditions and competitor offerings. Market research identifies the size of a given market, emerging trends within it as well as unmet needs that can be addressed by your company’s product development efforts. Customer satisfaction surveys also provide insight into existing problems/needs in order for your business to better position itself when developing new or enhancing existing products.
3M is an example of a company that takes full advantage of its access to customers in meeting their future needs through continuous innovation in its core businesses, including health care, industrial and consumer markets. With almost 70 percent of sales coming from products introduced in the past 10 years, 3M is leveraging its unique ability to understand changing market dynamics and develop relevant products backed by strong support services.
3M spends over $4 billion annually on research and development, which is about 10 percent of the company’s sales. The R&D process involves in-depth study into customer needs, competitive intelligence, technology trends and scientific breakthroughs to ensure that products are developed with 3M’s customers in mind — not just to meet today’s demands but set the future direction for growth.
R&D for new product ideas is done in 3M innovation centers located near academic institutions or in emerging markets where there may be larger segments of target customers. This centralization means more than half of these center groups’ employees are co-located with marketers who work directly with business unit management teams. It has been said that a corporation’s most valuable R&D asset is its customers. 3M is truly embracing this philosophy
3M’s product development cycle meets the market needs by bridging the gap between consumer-driven product ideas and new technologies to bring products to market. By integrating marketing expertise with technology, rigorous research and testing ensures that 3M’s new products deliver superior value at an effective price — whether it’s for established industries like automotive or engineered construction, emerging opportunities like solar power generation, electronic devices or specialized solutions in home improvement or sports and recreation.
The Digital product development process may include following phases:
1) Research & Analysis: This step helps define user profiles, understand their needs and desires based on demographics, usage patterns and location. It also ascertains the reasons why a customer would buy a certain product or service.
2) Ideation: Product ideas emerge from market research data and consumer feedback. The objective is to produce ideas that will change existing market dynamics or create new markets.
3) Idea Generation: This involves brainstorming product ideas. It aims to create many design concepts for later evaluation and selection process.
4) Concept Selection: A final concept is selected after evaluating the desirability, viability, feasibility of all the other proposed concepts.
5) Business Analysis & Financials: Here financial models are created which attempt to explain how much money a company could make on this product with different price points and distribution channels. The best possible business model is identified at this stage.
Hence Digital product development moves beyond the traditional methods and tries to create a win-win situation. A Digital Product is not just an idea or an image on somebody’s board it is more than that, it includes features which makes user life easier and comfortable.