Product Management is a complex and essential practice traversing multiple cross-functional areas within the company. While it is a well known practice in various well established product companies, most Product Management aspects are still adhoc within a startup, largely decided by the founders and the leadership teams, some based on gut, others based on fact-check with very few data points. Startups are challenged to find the product-market fit early on and there is small room for errors. Hence, a thorough but low-touch Product Management toolkit and framework would be extremely essential for startups. For IoT companies, it becomes much more complex with both hardware and software, where product management essentials have been very different. Another aspect is the customization you have to do for customers - where do you draw the line? How would you build the product and handle the customization, so that it can be provided easily to other customers with minimal efforts? In this session, Hans-Bernd Kittlaus and Haragopal Mangipudi, the pioneers of International Software Product Management Association (ISPMA), joined us for an engaging discussion on the above. They alse shared the Low-Touch Product Management Toolkit/Framework that would be applicable to most of the startups in our IoTForum community. We were joined by 2 of our Founders from IoTForum - Deva and Ganesh, to ask Hara and Hans the hard questions, relevant cases etc.

1. Customer-Specific Tailorability of
Software and Software-Intensive Products
– The Good, the Bad and the Ugly
Hans-Bernd Kittlaus
July 2020

2. July 2020
1. Introduction
– Relevant terms
– Classification
2. The Business Perspective
3. The Technical Perspective
4. Summary
Customer-Specific Tailorability
Agenda
2

3. July 20203
B2B Software Products
• Customer: Wants standard product that fulfills all his
specific requirements
• Vendor: Adaptation of standard product
B2C Software Products
• Customer: Limited expectation beyond standard
if standard is sufficiently attractive; may want some
personalization
• Vendor: Clear focus on standard and scalability
1. Introduction
Standard vs. Customer-Specific

4. July 20204
• Configuration setting or changing parameters
• Composition adding or arranging components
• Customization adding or changing program or
descriptive code
1. Introduction
Tailorability
Critical
• Non-invasive (through standard interfaces)
• Invasive (in the standard code)

5. July 2020
Standard Product
No Tailorability
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1. Introduction
Tailorability: Effort and Outcome
Variability of Requirements
(from different customers)
Effort on Tailorability and Tailoring Size of Reachable Market

6. July 2020
Standard Product
with Tailorability
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1. Introduction
Tailorability: Effort and Outcome
Variability of Requirements
(from different customers)
Effort on Tailorability and Tailoring
No Standard Product
Size of Reachable Market
➔ Customer-Specific
Projects

7. July 2020
1. Introduction
Service Definition
The Webster Dictionary differentiates:
• Useful labor that does not produce a tangible commodity (as in “professional
services”)
• A provision for maintenance and repair (as in “software maintenance service”)
• The technical provision of a function through a software component that can be
accessed by another software component, often over a network and executed
on a remote server (as in “web services” or “Software-as-a-Service”)
Human
Human
Technical
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8. July 2020
1. Introduction
Service - Product - Continuum for Software
Customer-
Specific
Services
Multi-
Customer
Services
Pure
Product
Product-
Related
Services
Standard Product
Complete Offering
Service Offerings
Custom
Software
Development
Custom
Software
Maintenance
Consulting
Reusable
Software
Components
Computing
Center
Outsourcing
Software
Product
Maintenance
Product
Training
License
Software
Product
(as it is)
SaaS / PaaS
Examples
Categories
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Tailoring Tailorability

9. July 2020
1. Introduction
– Relevant terms
– Classification
2. The Business Perspective
3. The Technical Perspective
4. Summary
Customer-Specific Tailorability
Agenda
9

10. July 202010
2.1 Software-Related Business Models
Standard Product vs. Customer Project Business
Service Business Product Business
Focus
Financial
model
Price
calculation
KPI
Market
valuation
Customer,
Project
Market
Product
Small investment,
Low risk,
Continuous moderate profit
Significant upfront investment,
Higher risk,
Potentially high profit
Cost-based (cost + margin),
Existing software usually
included
Value-based,
Software product usually priced
separately from services
Utilization,
Average daily rate
Market share,
Profit
Moderate Much higher

11. July 202011
Conclusion of all the major B2B players who have both
product and service business:
Strict separation of service and product business
Smaller B2B companies:
Often mixed approach
2.1 Software-Related Business Models
Standard Product vs. Customer Project Business

12. July 202012
• Good approach from vendor perspective:
– Standard product
– Non-invasive customization as professional service paid separately
➔ Update of standard product:
if upwards compatible: no effort
if not upwards compatible: requires changes to
customization as paid professional service
➔ Customer expectation not fulfilled
2.2 The Customers’ and the Vendors’ View
Customization

13. July 202013
• Individual customer requirements are implemented in the standard
product (one or multiple customer-specific code bases)
• Usually with cost sharing (adds to maintenance fee)
➔ Customer expectations are fulfilled
• Vendor advantages:
– Customers pay for (part of) product development effort
– Higher sales success
– Learning phase to understand tailorability requirements
2.2 The Customers’ and the Vendors’ View
Frequent Vendor Approach in Startup Phase

14. July 202014
• Code quality and maintainability decreasing with growing number of
customers and time
➔ Becomes a problem for both vendor and customer
• Approach may work with 10 customers, but not with 1000
• No partner readiness
➔ No scalability
• Approach not feasible with SaaS in multi-tenancy mode unless one
common code base
➔ Only as managed service (single tenant) at higher operations cost
➔ No scalability
2.2 The Customers’ and the Vendors’ View
Longer Term Consequences

15. July 202015
Most vendors try to adopt real standard product approach later
➔ Difficult migration
2.2 The Customers’ and the Vendors’ View
Longer Term Consequences

16. July 2020
1. Introduction
– Relevant terms
– Classification
2. The Business Perspective
3. The Technical Perspective
4. Summary
Customer-Specific Tailorability
Agenda
16

17. July 202017
3 The Technical Perspective
Standard product
(as shipped)
Binary code
(standard)
Changeable code
(standard)
Parameterization (configuration)
API
API
Installed product
(with adaptations)
Changeable code
(standard)
Parameterization (configuration)
Bespoke module
(customer)
APIBinary code
(standard)
API
Binary code
(standard)
SPM Focus

18. July 2020
1. Introduction
– Relevant terms
– Classification
2. The Business Perspective
3. The Technical Perspective
4. Summary
Customer-Specific Tailorability
Agenda
18

19. July 202019
4. Summary
• Three categories of tailorability:
– Configuration setting or changing parameters
– Composition adding or arranging components
– Customization adding or changing program or descriptive code
• In-product customization initially looks tempting for both vendors
and customers
• Significant negative long-term consequences for both

20. July 202020
4. Summary
Recommendations for IoT Startups
• As a standard product company,
focus on standardization and scalability as early as possible
➔ Learn to say no
• This tailorability approach is applicable to software and also to
firmware
• For customer-specific hardware
– Take additional cost and complexity in manufacturing and after-
sales into account
– A product line approach can help, but only makes sense for large
volumes

21. July 2020
Thank you !
Hans-Bernd Kittlaus
Training – Consulting – Coaching
Chairman
hbk@innotivum.de
www.innotivum.com
www.linkedin.com/in/hansberndkittlaus/
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22. July 2020
Hans-Bernd Kittlaus
• InnoTivum CEO, ISPMA Chairman
• SPM Management Consultant, Trainer, Coach, Author
• Certifications ISPMA SPM, Scrum CSPO, PRINCE2 Practitioner
• References Infosys, Samsung, IBM, SimCorp, BearingPoint, Talend,
Bosch, AVL, Lufthansa Systems, CGI e.a.
• Organizations
hbk@innotivum.de, www.innotivum.com
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Chairman

23. July 2020
Hans-Bernd Kittlaus
Publications
hbk@innotivum.de, www.innotivum.com
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24. July 2020
Legal Statement
© Hans-Bernd Kittlaus, InnoTivum Consulting 2020
The material in this presentation is legally protected and only
intended for personal use of webinar participants. Any other use
requires explicit written consent of Hans-Bernd Kittlaus, InnoTivum
Consulting.
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