Are software-configurable products in your company’s future?

I recently purchased a new vehicle, and as one would expect in a 2021 flagship model, it is laden with technology. From the 12-inch screen in the dashboard, to fuel management software, the car is the epitome of the old “car guy” lament that modern vehicles are more computer- than combustion-driven.

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One intriguing aspect of the vehicle is that several features will be delivered via an over-the-air software update, the most notable being a “hands-free” driving feature that allows the car to steer, brake, and operate without the driver’s hands on the steering wheel on certain roads. The sensors and hardware are already built into the car, but the software is “coming soon” and will require an additional fee as it’s billed as a new, additional feature.

In the automotive space, Tesla pioneered this approach at scale, providing owners of its cars with everything from free maintenance updates, to additional paid features ranging from self-driving to performance upgrades. One interesting example is that with a few taps on a smartphone and a credit card, Tesla owners could pay to unlock additional vehicle performance and gain a half-second acceleration improvement. This feat would usually take several mechanical upgrades and hours of work under the hood in a traditional car.

Devices ranging from home security and video doorbells to industrial equipment have offered features and functionality that can be turned on and off for a fee, yet this was usually an afterthought or value add versus an intentional capability designed into the product and the supporting infrastructure. As technology leaders, we may be tasked with responsibilities ranging from supporting these types of products in some ancillary capacity to actively becoming involved in developing these next-generation products. Like all initiatives that touch technology, understanding the implications of this evolution and positioning IT to play an active role will be far more beneficial than getting a call months later when strategies and spending have already been allocated, and IT is positioned as an order taker rather than an orchestrator.

Start by defining the possibilities

Product functionality that is enabled by technology requires not only a compelling offering, but significant supporting infrastructure. Companies that spent decades producing “fire and forget” products that were supported by third-party sales and service networks are often in for a rude awakening when faced with the prospect of direct customer interactions and performing roles ranging from sales and support to billing and customer service.

Perhaps the best route to proactively engaging IT in software-driven product discussions is outlining the possibilities presented by next-generation, technology-enabled products. Rather than purely theoretical discussions, start with examples that might range from Tesla to Ring doorbells that show the new market offerings that can be created through software-defined product features. Common hardware might reduce manufacturing and hardware support costs, while allowing nearly infinite product configurations for the end-user based on software-based feature changes. Where might your company sell the equivalent to a self-driving feature or unlock additional horsepower, all for a one-off or ongoing fee?

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IT leaders should be used to these “art of the possible”-style discussions. The key to marking them successful is linking what’s possible to the company’s current product portfolio and customer base. Even if your speculative products are barely in the same ballpark as what’s kicking around in product managers’ heads, demonstrate that you understand both industry shifts and the linkage to the company’s immediate future establishing IT’s credibility in the product space. This will shift the perceptions of future discussions from IT asking for more money to IT presenting a strategy to enable a shared future vision.

Then explain the underlying platform

With this shared vision established, lay out a platform vision for the technology that could support configurable products. You likely have portions of this platform already in place with tools like customer information systems, billing and finance, and perhaps even product and asset management tools supporting existing products. Focus first on the key capabilities required to support software-defined products, and then link current and planned systems to those capabilities.

Before a single software package or implementation effort is mentioned, you should have a clear vision for the functions required to support these products, how they link together, and where key gaps in existing capabilities lie and how they might be prioritized and addressed. Think like a product manager who must meet a specific deadline rather than a technologist striving for the prefect, integrated system. Explain the trade-offs of cost, speed to market and robustness for the various strategies for addressing these capability gaps.

Now, you’re discussing different approaches to addressing a missing capability, rather than the age-old dispute around how much money IT wants for what seems like tech toys rather than tools to succeed in the marketplace. With some advanced preparation, understanding of your existing products and services, and a few ideas of how software and supporting platforms might allow your company to rapidly innovate its products while introducing new revenue streams, you’ll find yourself driving strategy discussions rather than being invited late to the party and forced to play order-taker.

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