The Roadmap Six-pack

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Product roadmaps represent the steps that you will take to implement your product strategy. They describe where you’re headed and what products will be introduced along the way. They are used to guide and synchronize your company’s efforts. To be effective, your product roadmaps must comply with the three golden rules of product-roadmap development.

  1. Your roadmap must be set in the context of your customers’ and competitors’ roadmaps.
  2. Your product roadmap must be expressed in terms of product capability requirements, not features.
  3. Your product roadmap must reconcile with engineering’s development strategy

To meet the requirements of these three rules, a suite of six roadmaps is required. Each roadmap creates a link in the chain that connects your external environment to your product plans. The six roadmaps, their contents, and when in the strategy development process they are developed are summarized in the table below.

Roadmap NameContentsWhen Developed
IndustryYour target market’s product roadmapPhase-1 Environment
Application RequirementsMinimum requirements operate on the customer’s workpiecePhase-1 Environment
CompetitorForecast of your competitors’ ability to serve your target marketPhase-2 Situation
Product RequirementsCapability requirements for each product on your roadmapPhase-3 Strategy
Product ArchitectureDevelopment strategy to implement the product requirements roadmapPhase-3 Strategy
Top-Level Product Easy-to-communicate summary of requirements and architecture roadmapPhase-3 Strategy

Industry Roadmap

The word “industry” in the industry roadmap refers to the industry that will buy your equipment. Think of it as your target customers’ product requirements roadmap. It includes technology changes and performance targets over time for your customers’ products.

Some industries publish a standard roadmap that can be used as a starting point for industry-roadmap development. The semiconductor industry’s International Technology Roadmap for Semiconductors (ITRS) and the International Technology Roadmap for Photovoltaics (IRPV) are examples. In cases where an industry roadmap exists, it is usually developed by a consensus of an industry consortium’s member companies. However, it would be a mistake to assume that this published industry roadmap is your customers’ roadmap. It is not. It’s a watered-down, pre-competitive version of what industry consortium members are doing and thinking. It’s like the external version of your own roadmap. The dates are padded, and a lot of the specifics are left out. While a published industry roadmap is a good place to start, it’s not enough for high-resolution, product-strategy development.

In small or emerging industries without a consensus roadmap, the equipment supplier often has to aggregate an industry roadmap. Since the industry participants can’t get past their competitors’ lobbies, it’s not surprising that the suppliers often have the best overall view of that industry. As an equipment supplier, you may need to survey industry participants about their plans and synthesize the results into a composite industry roadmap.

This is exactly what happened to me when I worked for an equipment supplier to the manufacturers of high-brightness, light-emitting diodes (HB-LEDs) in the industry’s early days. I needed to develop my product’s roadmap, but this young industry didn’t have a roadmap of its own to guide me. It took many months of customer interviews before I had a multi-year roadmap drafted that described the cost, brightness, efficiency, and reliability targets for HB-LEDs as well as the technologies that were expected to achieve them.  At the time, I viewed this accomplishment as simply a necessary first step to feed my roadmap six-pack. But when I presented my version of the HB-LED industry roadmap to the CEO and CFO of a major HB-LED manufacturer in Taiwan, it became clear that I had done much more.

Throughout my roadmap presentation, the CFO and CEO kept whispering to each other. It was distracting, and I was concerned that I was way off track.  However, when my presentation ended, the CEO confessed that he had never developed nor seen a roadmap for his industry. The one that I had created was the first one that he had ever laid eyes on. “This is very well-done.” he said, “May I have a copy of your presentation so I can share it with my board of directors?”  The industry roadmap I had created helped my customers think about their product roadmaps. It was an unexpected way to add value to my customer relationships.

Whether you participate in an industry that publishes a roadmap or not, you’re going to have to roll up your sleeves to develop a roadmap with enough resolution to guide your product strategy. You’ll need to

  • Engage with industry-leading companies and the people in those companies that own planning for the future,
  • Attend industry conferences looking for trends and emerging needs,
  • Talk to your customers’ customers to find out what they are demanding for future capability, and
  • Ask customers “why” when they ask you to participate in joint development ventures or experiments to gain an understanding of the request’s context in their long-term plans.

For example, say you were assembling an industry roadmap for photovoltaic solar-cell manufacturers.  Solar-cell manufacturers make their living by turning polysilicon feedstock into solar modules that produce electricity from sunlight. These modules are sold to homeowners, businesses, and electric utilities as an alternative energy source. The basics of the solar module manufacturing process are shown below.

The photovoltaic solar module manufacturing process
The photovoltaic solar module manufacturing process

To create the solar-cell manufacturers, industry roadmap, you’d organize your work in a table. Put key technical, economic, and performance attributes in the first column. Then add columns for each year of your roadmap.  And finally, populate it with the annual targets for each attribute listed in the first column. See the example below.

Example Industry roadmap
Example Industry roadmap

Just remember in this step, you are creating your customers’ roadmap and not yours. So, express this roadmap in terms of your customers’ business, not yours. Not sure if you’ve got it right? Ask yourself, “Does this look like a roadmap that my customers would present to their customers, investors, and partners?” If the answer is yes, you are likely on the right track.

The Application Requirements Roadmap

As part of your strategy development, you’ll choose a problem you intend to solve for your target customers. That problem is referred to as the equipment’s application. The application requirements roadmap describes the minimum equipment capability needed to address the application and support the industry roadmap. It is populated with process parameters that describe what is necessary to operate on the customers’ workpiece. It does not typically contain economic value drivers such as throughput or operating costs.

In form, the application requirements roadmap looks like the industry roadmap. To make one first, create a table with the most important application requirements in the first column. Then indicate how each of these will change over time in response to the industry roadmap. For example, your application requirements roadmap might look like the one below if you supply furnaces that turn polysilicon feedstock into crystalline ingots for solar-cell manufacturing.

Example applications requirements roadmap
Example applications requirements roadmap

The application requirements roadmap is developed in phase one (environment) of the strategy development process. It is used again in phase two (situation) to assess your situation versus the application requirements. Here’s how.

  1. Start with the application requirements roadmap.
  2. Insert a column between the first and second columns.
  3. Label the column with the name of your current product for this market.
  4. For each of the attributes listed in your roadmap, enter your current product’s current capability.
  5. Score your current product against the application requirements for each attribute for each year on your roadmap.

See ingot-growth furnace, Mr. Melty example below.

Example situation vs. application requirements roadmap
Example situation vs. application requirements roadmap

Note that you are assessing the do-nothing scenario. In other words, you are answering the question, “What is my current product’s ability to meet the application requirements over time if I do not make any improvements?”  In a market where application requirements change, you expect your current product’s ability to meet requirements to worsen as time progresses. Referring again to the example in the figure above, you can see that the ingot-growth furnace, Mr. Melty, won’t meet the application requirements for material type and impurities performance attributes starting in year three. If you intend to continue participating in this market, you will need to address these deficiencies in your product roadmap.

Competitor Roadmaps

In your competitors’ roadmaps, you’ll determine your current situation versus your competitors’ current and expected future capability. First, you need to determine which product performance factors to analyze. These factors fall into two categories: application and value-driver specifications.

Application specifications are sourced from your application requirements roadmap. From there, select the critical few that define the application and represent your target customers’ most important buying criteria. The objective is to analyze the competition on the most important application capabilities, not fully define the product as you would in your Market Requirements Document (MRD).

Value drivers are those performance metrics that determine how much financial value is created for the customer.  All capital equipment buyers derive financial value from their purchases from a common set of value drivers. The type of capital equipment doesn’t matter. Manufacturing equipment, bulldozers, and jet airplanes all have the same value drivers. These value drivers are shown in the table below.

Value DriverDescription
Revenue/unitRevenue that the buyer can achieve from each unit of the product or service that the equipment is used to produce
ThroughputThe rate at which the equipment processes the unit
YieldThe percentage of good units that the equipment produces out of the total processed
UptimePercentage of time that the equipment is available for use and not in a repair or maintenance state
Operating costsAll costs associated with running the equipment, such as utilities, maintenance, and consumable materials
Capital expenseEquipment purchase price (or period depreciation expense)

We can create a comprehensive value expression for capital equipment purchases from the universal, capital-equipment value drivers above. See the figure below.

Comprehensive value expression for capital equipment
Comprehensive value expression for capital equipment

This expression describes the revenue that your customer can earn with your equipment, divided by the cost of producing that revenue. Your competitor roadmaps should contain the value drivers that are most important to your target customers’ buying decisions. Namely, the value drivers that are both

  1. Critical to your customers’ profitability and
  2. Meaningfully different among equipment suppliers.

You need to figure out what your competitors can do now and develop enough insight to predict what they will likely do in the future on these application and value-driver factors. Before you scoff at this as being more trouble than it’s worth, consider that every contest requires that this work is done. Whether it’s war, sports, poker, politics, or chess, a huge factor in winning is the ability to predict your competitors’ moves. Winning the capital equipment game is no different. Therefore, before you can design your strategy to beat your competitors, you must develop a view of their strategy to beat you.  To do this, you must develop a complete view of your competition that includes past, present, and future assessments of their

  • Financials,
  • Organization and key contributors,
  • Target markets,
  • Major customers,
  • Suppliers and partners,
  • Intellectual property,
  • Product and portfolio roadmaps,
  • Research-and-development spending,
  • Product-development speed,
  • Vision for value and competitive advantage,
  • Competitive issues,
  • Product specifications and architecture,
  • Customers,
  • Pricing, and
  • Responses to your positioning and value proposition.

Then you must synthesize your analysis into a product roadmap forecast for each of your competitors containing the most important application and value-driver, buying-decision specifications. Then you need to compare your competitors’ roadmaps versus your current capability. As with the position versus application requirements assessment, you are assessing the do-nothing scenario. The do-nothing-scenario highlights the specifications on which your competitors are expected to gain an advantage if you do nothing and, therefore, must be addressed in your product strategy. See the example in the figure below where a competitor’s roadmap is compared to your current product, Mr. Melty.

Example competitor product requirements roadmap
Example competitor product requirements roadmap

Product Requirements Roadmap

The product requirements roadmap captures the essence of your product strategy. It captures the most important aspects of the application(s) you intend to target and how you intend to create a competitive advantage. Your product requirements roadmap is determined by coupling your application requirements roadmap, your competitor roadmaps, and your vision for unique value.  The result describes how you intend to meet application requirements and beat the competition to meet your product line’s market share and profit objectives.  See the figure below.

How to develop a product requirements roadmap
How to develop a product requirements roadmap

Your product performance roadmap is populated with the same application and value-driver specifications you chose for your competitor roadmaps.

The application specification targets are derived directly from your application requirements roadmap. These specifications represent the things your product must do to operate on your target customers’ workpiece. Here are important factors to consider when setting them.

  • In many industries, the application requirements change over time. Therefore, when setting application specification performance targets, set them to meet the application requirements over the entire time that the product will serve that application.
  • Consider the full scope of applications that your customers intend to address while owning your equipment. They may be buying your equipment to run multiple applications at once, or they may be buying to address changing application requirements over time.
  • In general, exceeding your target market’s application requirements does not result in a competitive advantage. Your objective is to have the capability to address your customers’ application(s), then create a competitive advantage on value-driver performance.

You must set your value-driver performance targets in the context of your targets for value-driver advantage, product price, gross margin, and product cost. The create-value algorithm in the figure below shows the relationship between these elements.

The create-value algorithm
The create-value algorithm

The top-three algorithm elements determine the customer value that you will bring to the market. The bottom two elements determine the product’s profitability. The solid lines indicate the logic that you’ll follow to develop your product strategy. The dashed lines pay homage to the iterations required to find a feasible product strategy that produces the target customer value and acceptable profitability. Some key observations about the create-value algorithm:

  • Management objectives determine value-advantage (market share) and gross-margin (profitability) targets; these are inputs to the algorithm.
  • Price is a function of value-driver performance and value advantage, not cost.
  • Price and gross-margin targets determine product-cost targets.

As you can see, all the create-value algorithm elements are linked. They must reconcile. You cannot change one without having it affect at least one other element in the algorithm. For example, suppose midway through a product-development program, you learn that the team won’t achieve a key value driver’s performance target.  For the algorithm to reconcile, one of three things must happen:

  1. Performance on one or more other value drivers must be increased to produce the original target value.
  2. The target value advantage must be lowered. This preserves unit profitability but reduces the expected market share.
  3. The price must be lowered. If the price is lowered, then either the gross margin or the product-cost target must be lowered.

Imagine that you are Max, the product manager for ingot-growth furnaces sold to the solar-cell industry. You’ve determined that

  • Material type and material impurity levels are the most important application requirements, and
  • Throughput (ingot-weight divided by cycle-time), yield, and uptime are the most important value drivers.

Your product requirements roadmap might look like the one shown in the figure below.

Example product requirements roadmap
Example product requirements roadmap

Referring again to our example in the figure above, let’s walk through constructing a product requirements roadmap.  The first column of the product requirements roadmap is populated with the same application and value-driver specifications you used in your competitor roadmaps. The next three columns are populated with the specification performance targets for each product on your roadmap. In this case, the targets are for the current product Mr. Melty and planned products N+1 and N+2.

The last two columns contain your benchmark competitor’s current performance and performance at the end of the roadmap period. Your benchmark competitor is defined as the “one to beat” in each of your target markets.  And finally, your product’s capability is scored versus the current and expected benchmark competitor’s performance.

Creating the performance requirements roadmap this way communicates your competitive strategy. Your vision for unique value shows up as the critical few value drivers you are targeting to be substantially better than the competition. In our example product requirements roadmap, it’s clear that your vision for unique value is to create a throughput and yield competitive advantage.

To create your own product requirements roadmap, follow these steps:

  1. Create a roadmap template like the one in the figure above.
  2. Select the same process and cost of ownership performance metrics you selected when creating your competitor roadmaps and list them in the first column.
  3. Select your benchmark competitor. (a.k.a. the “one to beat”)
  4. Enter your benchmark competitor’s current and expected future capability in the last two columns.
  5. After the first column, insert a column for each product on your roadmap, including a column for your current offering if applicable.
  6. At the top of each column, Indicate the expected release date for each of the products on your roadmap.
  7. Specify the requirement for each capability metric for each product on your roadmap.
  8. Score each of your products’ requirement targets to indicate where you have a disadvantaged, advantaged, or neutral position.

Architecture Roadmap

The product manager owns the product requirements roadmap. Product development owns the architecture roadmap. Together these two roadmaps describe what must be done and how you plan to do it. During strategy development, product management and product development must iterate on these roadmaps until they align on:

  • The number of products planned
  • Product introduction dates
  • Expectations that planned architecture changes will produce products that meet performance requirements

The architecture roadmap looks like the performance roadmap, but it contains subsystems and subsystem architecture descriptions instead of performance metrics and targets. See the example ingot-growth-furnace architecture roadmap in the figure below.

Example architecture roadmap
Example architecture roadmap

Referring again to our example above, the left-most column contains the name of each of the equipment’s major subsystems. Then, for each subsystem, a description is entered for each of the products on the roadmap.  Finally, the shading on the architecture roadmap indicates whether subsystems in each product are

  1. Reused existing designs,
  2. Modified versions of existing designs, or
  3. New designs.

Unlike the performance requirements roadmap, the shading on the architecture roadmap does not indicate anything about the competitiveness of the architecture selections. That is not the intent. The shading indicates only the rough scope of work required to implement each subsystem generation. The shading helps to communicate the design risk plus the time and money needed for development. For example, many new designs on the architecture roadmap typically indicate that more money and time is needed than one with mostly reused and modified existing designs.

Top-Level Product Roadmap

The top-level product roadmap summarizes your requirements and architecture roadmaps into a graphical, easy-to-communicate format. At a glance, you can see how you compare to the competition on product-release timing and key-attribute performance. See the figure below for an ingot growth furnace example.

Example top-level product roadmap
Example top-level product roadmap