SKUs and Serial NumbersExcept in the very smallest of companies, products shipped to customers must be identified for a variety of purposes, including inventory tracking and sales reporting. Most companies rely on SKUs to manage these functions in the various corporate systems that help them perform. Software sold in high volumes may also be serialized for unique identification, tracking, and some limited copy protection. SKU ManagementThe changing nature of releases and variations, and their potentially long and descriptive names , puts a great deal of pressure on other corporate systems that must account for sales, shipments, upgrades, or other customer activities. The easiest way to manage this is to establish SKUs (stock keeping units). These are unique release identifiers that enable one release to be distinguished from all others within corporate tracking systems. As an identifier, a SKU is independent of the various textual descriptions of releases that I've described in previous sections. SKUs are used in a variety of circumstances. One example is orders for specific releases. Another is prices, which are not part of the release identifier or product name and must be obtained from a pricing database or system; the primary key to find the price is the SKU. Inventory levels for physical goods are also usually managed through SKUs. Inventory for electronic software distribution doesn't make sense, but since chances are good that you'll do some physical and electronic distribution, SKUs have a place in your inventory management system. Teams often struggle with when to assign a SKU to a release. SKUs introduce many additional tasks into the overall release process, so it is understandable that marketects avoid them unless absolutely necessary. The following guidelines have worked well for me.
Of course, these recommendations should be followed only if they fit with corporate policy. If your company mandates that all releases, no matter what, have SKUs, then by all means, create them. You can't mandate the format of a SKU, because it is usually under the control of corporate IT, fulfillment, accounting, and the like. You can, however, tell these groups how many SKUs you need and work with them on a format that will enable you to accomplish your objectives. Returning to our example, SuperDraw is one of four product lines at SuperSoft. Other parts of the company, such as accounting and order fulfillment, don't care about the product names or version identifiers. Accounting just wants to track sales results by product line and division, while order fulfillment just wants to make certain that the right deliverable is shipped to the customer. What they care about is the SKU, which is their way of tracking these products. For various reporting reasons, accounting has defined a SKU format NNNN-MMMM-#, where NNNN is a four-character division identifier, MMMM is a four-character product identifier, and # is a unique product number of arbitrary lengthand has defined the division identifiers. Together product management and accounting have defined the product identifiers; product management alone is responsible for assigning unique product numbers. Product management might define the SKUs as shown in Table 15-3. Table 15-3 contains three key logical components : the SKU, the external name, and the fully qualified release identifier. The last component should be extended as needed by product management to ensure that all aspects of the product are properly managed. For example, you may want to include the location of the build in your internal network (e.g., \\buildmaster\SuperDraw\4\5\1{build} if you're building every day). Table 15-3. Example: Assigning SKUs to Products
Backend systems often need an estimate of how many SKUs you might need. The number of SKUs associated with a product can be estimated by adding the following:
As you can see, SKUs can quickly grow to hundreds or thousands of identifiersplan accordingly . Serial Numbers, Registration, and ActivationA SKU is an identification code that allows a class of products to be tracked for inventory purposes. It can't identify an individual product sold to an individual customer. For that you need a serial number, a unique identifier that does distinguish individual products. Registration is how a customer, who has purchased the unique product, makes themselves known to the vendor who sold it, with the serial number acting as a key that binds the customer to the company. Software activation is a kind of forced registration in which various product features, and possibly even the entire product, are inaccessible until the customer completes an approved registration process. Software activation is closely related to license enforcement (see Chapter 4) as one of the goals of software activation is to ensure that only properly licensed software is allowed to function. In the physical world, serial numbers range from the lot numbers and associated codes printed on vitamin bottles to the identification tag affixed to my PDA. As a digital good, software cannot easily be identified with a unique serial number. Unlike physical goods, digital goods are often trivially copied , and embedding a serial number within the object code at production often represents an expensive change to internal processes. Moreover, unless you've adopted one of the license enforcement schemes described in Chapter 4 to prevent copying or modification of your software, serial numbers can be easily changed. Although serial numbers can be a bother, there are real benefits to using them. By associating a serial number with a product and asking the user to register it with your company, you can collect vital demographic statistics and tailor your marketing campaigns . Consider that once your customers have registered their serial number you can use it to notify them of product upgrades, bug fixes, and product and service offers. Registered customers may be willing to provide you with additional valuable information, including their preferences for new features or their willingness to participate in beta programs. Properly registered serial numbers can help reduce piracy. In the past, when serial numbers were printed on CD sleeves, the sheer size of programs and the difficulty in duplicating CDs were deterrents to piracy, but technological advancements have made such deterrents ineffective , and software developers are continually looking for new ones. Software activation is effective at deterring piracy while increasing the number of users that register their software. Activation processes vary according to need or by software activation vendor. Generally they work something like this.
Adopting a software activation process is a strategic decision. Most companies don't have the resources to create effective activation systems, but several vendors provide them. Offerings must be evaluated relative to existing and planned backend systems and workflows. Managing the backend systems is likely to be a much bigger job than choosing a software activation vendor. |