17.03.2022

Customer-Centric Product Management – How to Link Customer Needs with Your Product Portfolio

MHP Management- und IT-Beratung GmbH is one of the leading consulting companies and a subsidiary of Porsche AG. MHP’s special consulting approach is the symbiosis of management and IT consulting. As a digitization expert, MHP optimizes and digitizes processes across the entire value chain. Together with Edizon as a specialist for customer-centric growth and innovation strategies, a complementary approach was developed to enable a holistic quantifiable solution from needs assessment to product portfolio decision-making.  

Variant management must take equal account of customer needs and internal company requirements 

Jobs-to-be-Done theory, one of the most powerful tools in innovation management, allows markets, customers, needs, segments and competitors to be viewed from a new angle. Supplemented by the Outcome-Driven Innovation® (ODI) process, an integrated innovation, market research and strategy process, it is possible to identify both underserved and overserved customer needs on a market-specific basis. 

For companies with technical complex products and a high number of variants, this offers a promising basis for making customer-centric strategic product decisions. The focus is on the targeted creation of customized variants.  

However, when making decisions regarding new products or variants, it is not enough to apply only market-specific decision criteria. Internal company requirements must also be considered. The goal is to keep complexity costs as low as possible, and to be able to control the diversity of variants within the company. 

In order to be able to satisfy customer needs and the company’s internal requirements in the best possible way in terms of the company’s success, a holistic view is required, which means that a data-supported linking of both “worlds” is necessary. 

The Customer-Centric Product Management Framework (CCPM) enables holistic variant management 

One way to meet this challenge is to apply the CCPM (Customer-Centric Product Management) framework. This approach aims to link the identified and quantified customer needs (outcomes) with the company’s own product portfolio. This enables a holistic approach to product decisions. 

The CCPM framework can be divided into three phases: 

Phase 1: JTBD & ODI Approach  

In this phase, quantified customer needs and customer segments are identified. Using the Outcome-Driven Innovation® (ODI) process, the market segment is defined, customer needs are identified via qualitative interviews, which are quantified accordingly, segmented and potential fields of action are identified. 

Phase 2: Creation of the product portfolio 

In the second phase, transparency is created about the current product portfolio of the company (or division). For this purpose, it is first decided whether the company-wide product portfolio or a specific excerpt from the portfolio is to be considered. 

The product portfolio must be built up in two areas of consideration: 

  • The first area of consideration is the market view (also called “configuration view”). It shows which variants are offered to the customer. 
  • The second area of consideration is the technology view. This view shows which components are used to technically map the respective variants offered. 

Phase 3: Linking customer needs to the product portfolio and evaluating solution concepts 

After customer needs have been identified and quantified and the markets segmented (= phase 1), and the current product portfolio has been mapped (= phase 2), the link is created in phase 3. 

First, solution concepts are generated on the basis of underserved needs (= outcomes) according to the ODI process. The solution concepts that can be realized after initial consideration are now linked to the outcomes. It should be mentioned here that this is an N:N relationship. A customer need can therefore be fulfilled by several solution concepts, whereby a solution concept can also serve several customer needs.  

The solution concepts are then linked to the existing product portfolio. This involves determining which components and features need to be added to the product portfolio in order to integrate the solution concepts into the product portfolio. 

In this way, the solution concept can be used to represent a link between these two worlds. The solution concepts considered must now be evaluated and validated for the selected product strategies by integrating the solution concepts into the product portfolio for analysis and deriving recommendations for action. This iterative process must be carried out jointly for the solution concepts with all stakeholders (also several times due to possible adaptation requirements).  

Once the evaluation has been completed, a new product portfolio can be planned and decided upon based on data. This is followed by the implementation of the new products, in which optimizations can now be carried out regarding module formation in consideration of the new product portfolio. 

How to reduce complexity in products and processes  

It is obvious that such a framework cannot be done on a sheet of paper or an Excel sheet enhanced with macros. Due to the high external variant diversity, as well as the internal number of components and component variants to fulfill this same variant diversity, a complexity is consequently created that is very difficult to process without system support.  

The SimpleVariance® tool from MHP (A Porsche Company) was developed for precisely this problem. SimpleVariance® makes it possible to view dependencies and links visually via variant trees and to run analyses depending on the use case. For the CCPM framework, the tool was extended accordingly to include the ODI module, whereby all relevant information from the Outcome-Driven Innovation® (ODI) process can be entered and processed in the tool. 

Would you like to learn more about the approach and implementation of a CCPM framework? Contact us and/or visit us at the “3rd JTBD Summit Europe” on March 30 and 31 in Vienna. Experience the interactive breakout session on “SimpleVariance – Define a JTBD Modular Product Architecture and Reduce Complexity in Products and Processes”.  

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