The Business Plan

The business plan distinguishes itself from all other development documents as it is the foundation for all the work associated with the product. It does not guide a specific release but an overall family or set of releases.

Product managers have to prepare a business plan that justifies the development of the system. Developers have the right to receive such a plan so that they know their efforts are not in vain. Note that the creation of the business plan usually precedes the creation of the first architecture. In this sense, then, you can expect a business plan associated with the first release but not necessarily every release.

A well-written business plan is rarely more than 15 to 20 pages and includes the kind of information shown in Table 2-1.

Table 2-1. Business Plan Sections

Topic / Section


Executive Overview

Brief (two-paragraph) overview of the plan. A good rule of thumb is that a harried senior executive should be able to read and understand the basic contents of the business plan within five minutes.

Strategic Fit

What is to be accomplished. Show the proposed new products within the current strategy of the company. For product line extensions (or new releases of an existing system) show how the strategy is further enhanced.

Market Analysis

Who will buy, why they will buy, how they will use this product, and the anticipated size of the market. Describe customers by segments (e.g., researchers, lawyers ). Specify target companies (Fortune 500, etc.), and the target market. Market segmentation and market analysis are so important that I will discuss them several times over the course of the book.

Financial Analysis

A simple summary of detailed financial information found later in the plan. It must address, in format and content, the criteria required by the company building the product.

Product Description

Brief description of the product, with an emphasis on target market benefits. If this is a new release, describe the most essential new functions. This is not an MRD, which details requirements, but more of an overview that demonstrates key criteria from the perspective of the marketplace .

Competitive Analysis and Product Differentiation

An overview of the competitive landscape. I find it helpful to categorize competitors and then perform a SWOT [*] analysis of both the category and the key competitors within it. The end result is a specific statement outlining how your product will compete .

Product Positioning

The relationship of this product to existing products and the target market. Positioning is especially important because it guides what will be conveyed to the target market through various promotional activities (discussed further later in this chapter).

Marketing Strategy

How this product will be promoted and sold. In the initial development of a business plan it is usually sufficient to state if the release is going to be a big, noisy event going to all customers or a low-key, managed event going to a specific subset (as in a patch or maintenance release).

Channel Strategy

How the product reaches customers. This section should detail such things as how the product will be sold (direct or indirect, via the Web, and so forth).

Support Model

How this product will be supported. How the customer will come up to speed on its use.

Impact Analysis

What impact this product will have on other products.

Business Model

The proposed business model, including pricing.

Revenue Forecast

A simple but believable forecast of revenue. Trust your instincts on this, and learn to cut projections in half. Most marketing plans are overly optimistic on revenue and growth.

Cost Analysis

An estimate of engineering, support, and marketing costs. Estimate both nonrecurring and recurring costs.

Critical Risks

Any risks that may prevent you from completing your objective. Include dependencies with other projects, critically needed but not as yet allocated resources, and so forth.

Product Extensions and Futures

Key extensions to this product. Show that it has a future. I recommend using a variety of roadmaps , discussed in Chapter 4 and again in Appendix A.

[*] A SWOT analysis details the perceived strengths of a given competitor, its perceived weaknesses, opportunities that your company/product can exploit, and threats that your competitors can make against you.

Beyond Software Architecture[c] Creating and Sustaining Winning Solutions
Beyond Software Architecture[c] Creating and Sustaining Winning Solutions
ISBN: 201775948
Year: 2005
Pages: 202 © 2008-2017.
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