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Why all products need a software product engineering strategy (part 1)

Todd O’Mara
Nov 22, 2023

Software is critical to customer value and loyalty, new business models, and revenue generation. The time to pursue software product engineering is now.

In 2011, venture capitalist Marc Andreessen famously wrote that “software is eating the world.” Some 12 years later, Andreessen’s vision has become a reality. Some might say software is eating the universe.  Software has become the cornerstone of how we work, live, and play. Every major enterprise today relies heavily upon software, even those that traditionally have shied away from the tech sector. 

Examples of industry softwarization

Oilfield servicing companies spin out software divisions to monetize the digital platforms built to manage their oil rigs. Drink bottlers use their experience in the FMCG business to build software tools to help other businesses manage their processes and supply chains. 

But it’s not just about selling software out of necessity; it’s also a cost-optimization strategy that yields higher profit margins. For example, the drink bottler can shift their business model to offload physical and human infrastructure to an ecosystem of suppliers and focus on its core business.

The software-defined vehicle has transformed the automotive industry, giving manufacturers a range of new revenue streams and ways to differentiate their brand (e.g., Advanced Driver Assistance Systems (ADAS), advanced safety features, enhanced driver experience capabilities, and extended reality features to assist with navigation). 

Software is critical to customer value and loyalty, new business models, and revenue generation. According to research from McKinsey, nearly 70% of the top economic performers across a range of industries use their own software to differentiate themselves from their competitors.

Why change, and why now?

When is the right time to place bets on software product engineering? The answer is now. Here are two reasons to make the change.

Reason 1: Design better products, roadmaps, and experiences

Software product engineering enables you to create products and services that offer a memorable and differentiated experience. You’ll build software that is sustainable by design and easy to use. It has quality of experience (QoE) at the core, infused with customer feedback at every stage. A customer feedback loop ensures that you keep the customer at the center of everything you do, continuously improving your offering. Products are built right the first time, avoiding costly rework in the development process. 

Reason 2: Don’t just keep up, get ahead

Software product engineering enables you to develop and launch complex products with production-grade quality at startup speed. Your products will scale to handle enormous growth in users and data and ensure outstanding performance at sustainable costs. 

It will also help you to create a portfolio that’s strategically aligned, bottom-line driven, and brand coherent. Your portfolio can evolve rapidly to offer new features and experiences to meet fast-changing market demands, resource scarcity, and cultural shifts.

At Capgemini Engineering, we have the privilege of working with leading enterprises at the forefront of software product engineering. Here are two trends we’re noticing.

Trend 1: Increased pace  

Speed has become the new currency of the software product business. Enterprises in every industry face the challenge of accelerating software capabilities to: 

  • Secure their market position against disruptors, or 
  • Gain market share from their competitors by providing new features, experience, and value

This pace can be felt in different areas. Software products and services must keep pace with customer needs and preferences. Software is not a one-time solution to the market. It must evolve and keep pace with customer needs. In addition, software must adapt to changes and developments in the technology landscape, including cloud computing and artificial intelligence (AI). 

In a market where first-mover advantage is paramount, and winner-takes-all dynamics exist, time to market is critical. A delay in innovating new software products can result in missed market opportunities.

Trend 2: The digital economy 

The tech world revolves around a digital economy.

This digital economy sees the digitization of economic activities and the integration of digital technologies into various sectors. This economy relies on these digital technologies, like the internet, mobile devices, cloud computing, and data analytics, which drive faster communication, data processing, and global connectivity.

In the digital economy, data is digital gold and those who can best leverage it hold a significant advantage. For example, AI and machine learning technologies allow personalized recommendations, predictive analytics, and automation across a growing range of sectors, from finance and healthcare to marketing and entertainment. Utilizing this data offers a greater understanding of the performance of products (and how consumers engage with them). This can help businesses future-proof themselves through a greater connection to the needs of these customers – and an understanding of how those needs will evolve.

In Part2 of this blog post series, we’ll explore software product engineering’s challenges and how to succeed with it.

Want to learn more about how to succeed with software engineering? Download our white paper on Engineering Next-Generation Digital Products.

Software is critical to customer value and loyalty, new business models, and revenue. Learn about three challenges and steps to success with software product engineering.


Todd O’Mara

Vice President of Software, Capgemini Engineering
Todd is consistently captivated by Capgemini Engineering’s unwavering commitment to client value and deliver outcomes. He currently leads a brilliant team of solution architects, thought leaders and portfolio managers focused on driving the success of the Software Product Engineering business at a global scale. This collective is driven to orchestrate long-term client success driven by software.