Since January 2020, a disruptive transformation has been a hot topic. However, it has existed for the last three decades. The only difference is that enterprises need more time to manage the transition in the digital age since disruptions happen more frequently. For many leaders, disruption is a source of uncertainty and fear. It can create a feeling that there is nowhere to hide. For example, what do you do if your business has just been disrupted by new technology, but you don’t have the resources to do anything about it? This guide will discuss how to consider changes in your product structure so that you can safely navigate disruption without losing too much market share or falling into debt.
Why Does Changing Product Structure Matter?
Disruption can take many paths for your industry and business models. At the core, it means that the way you operate your business and likely how you operate the business of others in your industry will change. That is why it’s important to understand how customers want to purchase your products and if they want the same product offering in their hands once they have had time to make the transition.
Problems can arise when you don’t anticipate how your industry will change. It may seem like a good idea in the present, but once disruption takes place, you may have decided to use emotional pressure instead of logical thinking. If you are trying to anticipate the disruption, you must put your decision in the right perspective. The idea is for you to think about how your product structure challenges impact your business model and whether or not it would allow you to compete with the businesses trying to disrupt you.
When To Consider A Change To Product Structure?
To change your product structure, you must have a good idea of whether or not your current product structure can survive disruption. The Leaders are compelled to think about modifying their product organizational structures because of several internal and external disturbances. Potential internal change disturbances include the following:
- Modernizing architecture and putting best-in-class agile, continuous deployment techniques into practice
- Silos resulting from the functional organization over time need to be dismantled. There is a mismatch between engineering priority, product needs, and customer priority that needs to be addressed.
- To increase revenue prospects by enabling customers to fully utilize the product suite, there is a need to promote integration and coordination across businesses and decrease duplication of work due to the GM model.
An external disturbance could be attracting and retaining new customers with different buying habits and conditions. In the digital age, customers no longer want to avoid in-depth conversations with an account representative about what product or service to purchase. This may seem like a luxury for some business leaders, but it is necessary for many customers. Thus, you need to ensure that you can offer your product how your customers want to remain competitive. So here are some external disturbances that are as follows:
Cloud:
Some businesses recruit new personnel, rethink their product architecture, and change how they market due to the requirement to develop cloud-native and SaaS products. The organization must take a step back to evaluate how to operate and be successful in a cloud-first environment to produce cloud-native products and migrate on-premise products to the cloud. Customers’ switching costs are meager in a SaaS world, and consumer expectations of product capabilities are high. Organizations must have the proper organizational structure to ensure they can fulfill the demands of modern product development processes and expectations of frequent releases and upgrades driven by the cloud.
Innovations:
Innovations are the driving force behind disruptive innovation. For example, more is needed to offer a product with a great user experience. You should also create features and use cases that accommodate the new shift from technology to design. A good example is how businesses are starting to focus on “bundling” features for their customers.
Data:
As AI technology is pushed forward by cloud and big data, more is needed to be good at data. To be competitive, you need to use the most effective tools available to gain valuable insights from your collected data. The key difference between now and the past is that companies can gain intelligence from those insights using advanced AI algorithms. Businesses must put their products into the hands of these businesses, or their competitors will realize an edge by improving their products before yours.
Ecosystem & Platform:
Many businesses have realized this and are looking for ways to improve their competitive advantage. There’s a need to develop an ecosystem or platform around their products to offer the public better value and reduce the risk of losing customers. For example, there is no distinction between what is hosted on-premise or in the cloud. You now need to create a hybrid environment that seamlessly runs on-premise and in the cloud for customers and partners.
In summary, you should always keep an eye on how your product structure will help you compete in the business environment. Try to be a leader instead of a follower with the same old product organization that may not function as it once did. Understand what changes you want to make and how they will impact your business.
