Traditional physical products and machinery are steadily being replaced by connected products and assets that shift business models and augment customer relationships with digital experiences and data. But creation of these products is a major challenge for traditional product companies. The process of building connected products is complex, requiring new software development skill sets, accelerated product release cadences, and innovative software tools and proccesses that meet the needs of IoT product organizations. For traditional product companies to make the transition to a digital product development organization and successfully create connected products they will need to focus on the following five initiatives:
- Create an open partner ecosystem that amplifies product value.
- Organize for continuous product improvement through software updates.
- Adapt agile development and planning processes to physical product development.
- Embrace flexible requirements and contracting for iterative projects.
- Build an extended team of broad and deep t-shaped skillsets.
Adaptation and execution on these initiatives will be difficult requiring executive buy in, core shifts to company cultures, partnership with services firms, reskilling, and change management initiatives. For a deeper dive on this topic and actionable steps to take in the transformation to a digital product development organization, see the Forrester report The Internet Of Things Propels Product Development Into The Digital Era.