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Product risk management

The following article is a sample from the full BVOP™ Ultimate Guide and is part of the preparation for the BVOP™'s modern Agile Product Management Certification Program.

Major product risk topics (items) are presented in the Business Value-Oriented Project Management section, chapter Product risk management

Representatives of the Business Value-Oriented Product Management (BVOPDM) office participate in the definition of project risk and play a major role in the prevention of possible product risks.

The BVOP recommends describing negative scenarios for potential undesired directions that the product may take after it is released to the intended audience. Defining action plans is also recommended.

Major scenarios may include:

  • Users do not accept and use the product at all.
  • User adoption is below the estimated minimum levels.
  • User adoption is higher than the estimated levels.
  • Product features do not satisfy the users’ and market’s demands.
  • Product support is slower than the velocity of the market and the users' demands.
  • Usability issues.

Other risk topics and scenarios may relate to:

Operational processes, price, quality, regulations, users' cultural and behavioral specifics, etc.

Users do not accept and use the product at all

Not accepting the product is the worst possible scenario. In this case, the organization may need to create strategies to withdraw the product from the market and eliminate certain procedures in order to reduce losses.

The BVOPDM office and key roles at the organization plan such strategies and prepare for such possible scenarios right from the very beginning of the product planning.

Estimated losses should be defined, and all key roles in the organization must be aware of them.

Users adoption is below the estimated minimum levels

User adoption can be considered as the general acceptance of the product by users and their willingness to use or pay for it.

If the users' adoption is below the estimated minimum, a potential action plan may include immediate product improvement, increasing sales activities, improving marketing strategies, or expanding the intended audience (target users).

Users adoption is higher than the estimated levels

If the quantity of the product does not meet the users' demand, this can lead to negative effects. The quantity of the product may be physical or non-physical.

If the product is physical, its quantity is usually considered to be the number of manufactured items.

Rapid production at a higher, non-optimized price can be the easiest and quickest action plan for this scenario. Rapid production should be applied as a temporary solution until production cost and velocity are balanced.

If the product is non-physical (for example, virtual), an example of insufficiently satisfied users' demand may be reaching its limits quickly or facing technical constraints.

Users may expect higher limits and fewer constraints in both physical and non-physical products.

Product features do not satisfy the users’ and market’s demands

Product features may be unsatisfactory, less attractive than expected, or users can expect more features, product capabilities, or higher overall emotional satisfaction.

In this case, innovative and attractive functionalities, which were pre-documented and not developed, may be planned for further development if required resources are available.

Product support is slower than the velocity of the market and the users' demands

Users can expect new functionalities, modules, and parts of the project to be developed faster than the organization's capabilities.

Usability issues

Usability issues can be associated with low levels of accessibility, poor affordance, or negative user experience.

Usability issues should be the lowest possible product risk, as they are usually fixed during product development and testing phases.

Every product may face usability problems in a real environment among users. Acceptable levels and negative usability related scenarios need to be defined.

Although this is a rather unlikely risk, critical points of usability issues need to be defined in the initial stages of product planning.

Defining and managing the product risks

Products typically encounter different types of risks and negative situations in a real environment.

Product risk may include unlimited topics, and the BVOPDM office creates simulations, scenarios, and realistic and feasible risk mitigation actions for situations that are most likely to occur.

Defining and managing the product risks may require the participation of all organizational teams or individuals that may give a realistic and valuable risk definition and plan mitigation actions.

Product risk management in Product Management
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