There’s always a queue in software development. You can’t meet every need, but you can get a good return on investment if you do it right. We explore how in this blog post.

What drives your software development?

Sometimes software development is driven by efficiency, focusing on low-risk incremental improvements. Work is easy to plan, and results are quick. The downside to this is that the value created often decreases after developing “low effort, high value’’ features.

Software development ideas can also come from sales departments that hear customer needs first-hand. Such development can increase sales in the short term, but one-customer requests can hit profitability hard in the long run.

Technological revolution or a significant change in the business model creates a lot of needs for software development teams. These needs are not always visible to the users of the product so the customers may become impatient. 

Company strategy guides your software development, but implementing a strategy requires technical enablers and capabilities. Sales may not increase in the next quarter, but it’s essential in achieving a long-term competitive edge.

Changes in your customers' operating environment present a need for software development work queues, and shifts in the market provide endless opportunities. By identifying changes, it’s possible to strike a gold vein; if you can present a solution before the customer has time to propose an opinion on how to solve it, you’ve reached the heart of the product business!

Ideally, changes in your customers' environment will guide your software development, your products will beat the competition, and you’ll gain power over pricing. Enabling this requires splitting themes into smaller chunks called requirements, which get transformed into work items, and work items are the language your developers speak!

To determine whether you’re developing the right things, you must first understand where requirements come from.

6 sources of development needs—requirements

Development needs, or “requirements,” come from many directions and vary in nature. Customers or your company may direct the value of a requirement, which can materialize immediately or years later. Below, we consider typical sources of requirements.

1. Product strategy

A long-term roadmap visualizes the product strategy. A good product strategy describes the steps to move from the current to the target state characterized by your product vision. A product strategy is essential in dealing with significant change.

The requirements contained in the product strategy are often long-lasting in terms of impact, and sales figures may not be apparent for months or even years.

2. Understanding market requirements

Gathering market understanding is the product manager's job. At its best, it will help you get ahead of your competitors.

Understanding your market well involves:

  • Researching the competitiveness of your company/product by, for example, knowing your customer segments and analyzing your positioning against competitors.
  • Following the changes in the operating environment of your most important customer segments.

Requirements derived from market understanding aim to improve the competitiveness of your product and the changes in your customers' environment. Often, these requirements get targeted in the medium term with no quick wins. Managing market requirements is part of strategic product management.

3. Customer requirements

Customers are an essential source of product requirements, and requests come through several channels, e.g., sales, customer services, meetings, events, feedback channels, etc.

Requirements given by customers focus on small incremental changes in the product. Customers are masters at asking for small changes, e.g., in the user interface, but few can describe their needs over an extended period. Based on customer feedback/requirements, the product can be made more user-friendly.

Customers can make demands that aren’t important to others, which can be challenging for the product business as development should provide value to the masses to utilize the business model.

4. Technical requirements in product development

Technical debt causes a range of challenges, such as the slowing of product development, an increase in work to maintain the product, scalability (limitations in increasing the number of users), information security risks, and a decrease in usability.

Requirements related to technical debt often focus on work that’s not visible to customers, and replacing an outdated component with a new one won’t make it so. Eliminating technical debt can tie up many resources, but the value it generates is difficult to define.

5. Product requirements of internal stakeholders

Internal stakeholders look at products from their viewpoint and have many requirements, including production, customer service, and product management.

Production requirements are often related to issues such as delivery capability, which doesn’t add value to customers directly, but on the other hand, creating value for your company is easy to assess (investment/savings).

Requirements received through customer services are often related to bugs, requests, and improving usability.

Product management needs are often related to data collection. By collecting data on the use of the product, the understanding of customers improves. You can remove any functionality not used to make savings in maintenance costs. The product manager can also drive functionality that enables additional sales from the product.

6. Regulatory requirements

Regulations in the customer's environment, e.g., laws and standards, are considered in market requirements. Such requirements apply to all customers, e.g., in the EU, so understanding them is vital.

Regulations can, however, impact your activities, even data protection GDPR. Sometimes you want to stand out from the competition by adhering to a stricter safety standard. Changes to products or, at least, the processes around them are often necessary. The requirements of regulations are only sometimes visible to the customer, and the benefits may also be indirect.

The power of a company strategy for software development

A company strategy complemented with numerical goals will guide development. A good product strategy will define how the offering develops to meet goals.

You’ll know you’ve got it right when you’ve met business goals and strategic changes proceed according to plan. Below is a list of practical challenges to consider when choosing what’s suitable for the development backlog:

  • Product development resources must be divided into short and long-term projects.
  • Product development resources must be allocated to implement requirements from different sources.
  • Product development must provide value to various customers and internal stakeholders.
  • There are always more needs than can be met.
  • Prioritization is subjective when requirements are not commensurate.
  • There is no product strategy, or it is flawed.

The solution is not in the process or framework (Agile, SAFe). Also, a single method doesn’t make it easy to prioritize different requirements. Tools can help with visibility but not in the prioritization of requirements.

Developing a successful software product

The development of product management capabilities provides the tools for success. Product management offers systematic ways to raise your business to a new level of prosperity. 

The product strategy defines development for achieving long-term goals. The market opportunity helps to identify the gap for new products. The methods of market opportunity determine the need and business potential.

Product planning helps to develop value-creating and easy-to-use products and services. The means of product design focus on what’s important to the user and secure the return on the value of the product to the customer.

Life cycle management helps maximize the value obtained from a product. Each product needs a manager to proactively lead the business in alignment with the goals of each life cycle stage.

Published: July 28, 2023

Software developmentProduct managementproduct strategy