Key Decisions in Strategic New Product Development for Small Software Product Businesses

Small companies in the software product business risk rework and market failure due to shortcomings in integrating a strategic perspective into management of product development. Because little guidance exists for helping such companies link business strategy with product development, we propose that improvement should begin with helping the key persons maintain the ‘big picture’ in their everyday bustle of multiple, sometimes even contradictory roles and responsibilities. We present a framework of key decisions to address in order to reconcile the perspectives of business strategy and product development, based on strategic management, new product development and software engineering literature. The framework was tested and refined as part of a study aiming to improve the NPD management practices in three companies. Our findings indicate that using the framework helped raise the companies’ awareness of the importance of long-term planning in product development and yielded relevant improvement suggestions regarding daily product development activities.