If digitization is a conversion of data and processes, digitalization is a transformation.
Nobody is denying it, most products today have a digital aspect to it. Companies use digital technologies to change the business model and provide new revenue and value-producing opportunities. According to a Boston Consulting Group study in 2022, 60% of companies plan to increase their investments in digital transformation in 2023 vs. 2022.
Digitalization is the process of moving to a digital business – transforming. This means we, as product managers, need to understand an even wider spectrum of business and product aspects than ever before.
Products are becoming more digital in two main ways:
Many non-digital products are now being digitized by incorporating digital technology such as sensors, internet connectivity, and other electronic components to enable new functionality and capabilities. A simple example of this could be the traditional mechanical watch becoming a smartwatch with a digital display and internet connectivity. However has not only happened to consumer goods, but all across industries, for example in healthcare and medical devices, where both telemedicine and internet of things (IoT) have shifted things significantly.
2. Digital tools used by Product Managers:
Product managers have long been using using digital tools to help design, develop, and test products more quickly and efficiently. Things like product lifecycle management (PLM) systems and customer relationship management (CRM) tools are a part of the standard toolbox. In a survey by Product Focus in 2022, tools like Jira, Confluence, Miro and Aha for product planning and communication were highlighted as being widely used. Additionally, digital marketing has become a crucial aspect of product management. With the help of analytics, companies can track the performance of their digital marketing campaigns and optimize their strategies accordingly.
In addition to the above two points, many new products are “born” digital – now being delivered as software-based products, such as mobile apps and cloud-based services. These types of products demand more frequent updates and new features and provide the ability to easily scale to meet customer demand.
To gauge the opinion of Danish product managers, we used our Nevico Product Management Survey 2022 (download the full report here) to ask if product managers are currently experiencing any changes in the product portfolio related to digital offerings. 58% of all respondents answered YES – and qualified with a few remarks, which speaks to the general trends being recognizable among Danish product managers:
“The core product will not become digitized, but adjacent products are becoming more and more cloud based.”
“..much more focus on services as a way to grow business.”
“The product is not digital, but the customer experience is developing digitally (product configuration, size, colour, ordering)”
With digital products comes new demands to our profession. We now need to have a strong understanding of data analytics, customer experience, and technology, and to be able to collaborate effectively across teams. We also need to be able to manage frequent updates and new features and be aware of, and comply with data security and privacy regulations.
Increased focus on data-driven decision making
With the integration of digital technology, products are able to collect and analyze data, which can be used to improve product performance, customer experience, and decision making. Product managers must have a strong understanding of data analytics and be able to use data to inform product development, pricing, and marketing decisions.
More frequent updates and new features
For software-based products, product managers are expected to manage more frequent updates and new features, and ensure that they meet the needs of the customers. This means roadmaps and release management are essential for success.
Greater emphasis on customer experience
Digital products are (relatively) flexible and can allow for greater customization and personalization, which increases the importance of understanding and responding to customer needs. Product managers must be able to gather and analyze customer feedback and use it to inform product development decisions.
Increased collaboration and coordination across teams
Digital products often involve multiple teams working together, such as development, design, marketing, and customer service teams. Product managers are expected to be able to collaborate effectively with these teams to ensure that products are delivered on time, within budget, and meet customer needs.
Greater emphasis on security and privacy
As digital products often involve the collection and storage of sensitive data, product managers must be aware of and comply with data security and privacy regulations. We also need to ensure that products are designed and implemented in a way that protects the privacy of customers.