In 2010, Ross Petit proposed separating IT into what was utility vs value-add. Martin Fowler later replaced “value-add” with “strategic”.
The basic idea is that whether an IT system or project is strategic depends on whether the underlying business function is a competitive differentiator or not.
If the business function is not differentiating (aka utility), it makes more sense to buy than build; if the business function is differentiating (aka strategic), it makes more sense to build than buy.
So, let’s think about product development systems, that is, the processes, structures, roles, principles, and other mechanisms that shape how an organisation approaches product development.
Is this utility or strategic?
If there is no or limited opportunity for competitive differentiation in product quality, innovation speed, delivery speed, cost, etc., then it makes sense to simply copy your product development approach and compete via other means (e.g., business models, monopoly, regulatory capture, etc.).
On the other hand, if there is significant opportunity for competitive differentiation in product quality, innovation speed, delivery speed, cost, etc., then developing a unique product development system makes sense. This could include unique names, structures, roles, techniques, principles, etc.
Granted, just as when developing a custom strategic technology solution, you wouldn’t necessarily build everything from scratch, when developing your custom strategic product development system, you shouldn’t necessarily come up with everything from scratch.
