By Gaurav Rathi
To stay relevant in the competitive financial services industry, organizations need to continually innovate or they risk dropping out of favor in the marketplace. Thanks to the continuously increasing flow of data, teams are able to focus new product development (NPD) around the personalized desires of the consumer at entirely new levels. In today’s era of digital transformation, successful NPD requires attention to five pillars. They include strategy, product, engineering, experience, and data. While slight variations are permissible and necessary across different branches of fintech, leaders can use these pillars to operate efficiently and rapidly bring products to market on schedule and on budget.
A new methodology of NPD
While traditional project management techniques such as “command and control” and “waterfall” worked well in their own systems, in a digital age, the newer and more adaptable five-pillar method is far more efficient. Older systems were designed with a structure that encouraged teams to focus on NPD in a linear fashion. The new method considers the flow of real-time data and how it helps efficient teams decrease time to market. The five-pillar method also leverages real-time data to expedite and improve decision-making, saving hours, days, or even weeks in rolling out new products, product updates, and new features. The five-pillar approach consists of cross-functional teams each with distinct responsibilities:
- Pillar 1: Strategy. The first pillar refers to the plan of action that outlines the teams’ goals, objectives, and approach to achieving them. It involves identifying the target market, defining the product’s unique value proposition, assessing competitive factors, and establishing a roadmap for product development, launch, and growth.
- Pillar 2: Product. The second pillar of NPD refers to a tangible or intangible item that is designed, developed, and marketed to meet a specific customer need or solve a problem. It can be a physical good, a software application, or a service, and it is created through a process that involves ideation, design, prototyping, testing, and refinement.
- Pillar 3: Engineering. This pillar involves the application of scientific and mathematical principles to design and develop a product. It includes the use of specialized knowledge and skills in areas necessary to create products that meet performance, reliability, and safety standards.
- Pillar 4: Experience. The fourth pillar centers around the end-user’s interaction with the product and the resulting perception, emotions, and satisfaction. It involves understanding the user’s needs, preferences, and behaviors to design a product that delivers a positive and meaningful experience, from initial awareness to post-purchase support.
- Pillar 5: Data. The final pillar addresses the information collected and analyzed to inform product development decisions. It can include customer feedback, market research, performance metrics, user behavior data, and other relevant information that helps the team understand user needs, preferences, and pain points.
Each team is accountable for one crucial pillar in this NPD method. Operating together, they are able to dynamically collaborate and communicate to bring new products to market efficiently.
How leaders can bring about this transformation
Organizational leaders are responsible for implementing the transformation from static to dynamic NPD. The five pillars provide the vehicle, but to successfully execute this approach, buy-in and adoption from mid- and high-level leaders is essential. Here are the guiding principles to steer teams to success:
- Create a safe psychological workplace, where team members are encouraged to report vital information, good or bad. This environment fosters a culture of transparency, trust, and collaboration in which employees feel comfortable expressing their opinions, concerns, and ideas without fear of retribution or criticism.
- Provide tools for the ideal collaboration and communication between teams. Practice efficient and effective communication channels by establishing clear lines of responsibility and accountability, and promoting a collaborative culture that encourages open dialogue, knowledge sharing, and mutual support among team members.
- Provide easy-to-access policies and best practices on each of the five pillars of NPD. This guarantees that team members have a clear understanding of the processes, methods, and principles that guide the development of a new product including ideation, design, engineering, testing, and launch. It also ensures that team members can apply best practices consistently and effectively throughout the product development lifecycle.
- Train all relevant team members on the five pillars of NPD. Adequate training (and retraining) ensures that all team members have a common understanding of the principles, methodologies, and tools used and can apply them effectively in their respective roles and responsibilities. It promotes a shared language and approach to new product development and fosters cross-functional collaboration, innovation, and efficiency.
- Inspect the application of the five pillars to NPD routinely. To make certain that the NPD process is aligned with the organization’s strategic objectives, customer needs, and market trends, regularly review is essential. Evaluate the team’s adherence to principles and practices, identify areas for improvement, and take corrective actions as needed. Regular review minimizes risk, optimizes resource allocation, and maximizes the likelihood of product success.
- Update the process regularly with respect to new information gathered, as well as regulatory and legal considerations. Continuously monitor and analyze new information and data related to the product, customer needs, market trends, and regulatory and legal requirements. Then update principles, practices, and policies accordingly. This ensures the product development process remains current, relevant, and compliant with industry standards and that the team can adapt to changing circumstances and requirements.
The benefits of efficient implementation of the five pillars
Proponents of traditional NPD systems may be reluctant to change. The benefits of using the new five pillars of NPD may convince them to jettison the old systems and implement new processes. When using the new five-pillar approach, new products and product updates are brought to market in less time, giving efficient organizations a leg up on the competition. This also saves money, time, and other critical resources are saved by eliminating the need to re-do work. Additionally, using a dynamic yet systematic approach reduces the risk of failure and increases the likelihood of market success by aligning the product development process with the needs and expectations of the target customers. This process leverages the organization’s strengths and competitive advantages and promotes innovation, creativity, and continuous improvement. These all are essential for staying ahead in a rapidly evolving and highly competitive market.
Through its customer-centric approach, the new NPD five-pillar model enhances user experience. Products developed with this approach create maximum customer satisfaction because they were designed and refined in real time based on customer desires. Leadership and all NPD teams can review and adjust new products before they hit the market, based on new and important real-time data. By incorporating customer feedback and insights into the process along with a data-driven approach, teams can continuously improve the product’s features, performance, and usability in real time.
The financial services industry is evolving at a rapid pace. Financial institutions, fintechs, and other organizations that don’t operate their new product development with real-time data will be overwhelmed with consumer attrition and innovative competition. An organization’s success against its competitors depends upon the efficiency of its new product development initiatives. There may be pushback from experienced leaders and team members who are comfortable with the old ways; however, an effective and efficient NPD is key to succeeding in this era of digital transformation and consumer-centric products. This mindset needs to revolve around these five pillars of NPD and be fostered by leaders if it is to be truly adopted by the necessary stakeholders.
About the Author:
Gaurav Rathi is a strategic product leader with more than 16 years of experience in delivering world-class digital products in B2B SaaS/DaaS models for Fortune 100 companies. An expert with a demonstrated history of working with UX and engineering teams to build, digital transformation and continuously improve digital products across a broad range of industries including asset management, custody cash management, investment banking, capital markets, payments, and transaction banking. Gaurav holds a bachelor’s of technology degree in computer science from Uttar Pradesh Technical University, India. For more information, contact [email protected].
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