Any advice on how to determine the budget for a new product management project?
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Senior Vice President of Product Management in Softwarea year ago
While it's tough to give a prescriptive answer without knowing all the specifics, there are some high-level elements to consider when budgeting for a digital product. Start with costs for Research & Discovery which includes market research, user interviews, and competitive analysis. Then, factor in Design & Prototyping expenses for UI/UX design, wireframing, and interactive prototypes. Then you got the Development costs, both for front-end and back-end, and any third-party integrations or tools you might need and also you need to identify if you're going in house , third party, freelancers, etc. Lastly, set aside a budget for Testing & Quality Assurance and Post-launch Support & Maintenance because if you're going MVP, you can save by figuring out the areas that can be built later, especially after you validate the product hypothesis.Director of Product Management in Softwarea year ago
It really does matter as to what you are trying to do. If you are trying to flesh out the right solution to a problem by iterating on an MVP concept, you want to prepare yourself for several iterations, as well as the costs that will be incurred in getting this in front of real customers and getting some real feedback. If you feel confident that you have iterated enough and have a solution that customers will pay for (not just one that they say they like when you're sitting there looking directly at them) you have a few areas to consider:
Market Research - Even if you think you have your target customer and value prop defined, validating it and tuning it with additional market research can be very valuable.
UX/Design Costs - The UX Team should be able to help you with this
Development costs - Get some high level cost estimates from the dev team based on the most accurate requirements you have at the time. These requirements WILL change as you do design and as you build, so you want to build some room in the budget for this.
Third Party Licenses & Infrastructure - IT Ops should be able to help with this.
QA Testing - If this isn't included in your development estimates, talk to the QA team. Typically they have a metric that says - for ever X developers, we use Y QA resources.
Sales/Support Training - This often goes overlooked. Does your sales and support team need to be trained? Do you need new sales people or can your current sales people sell this? (More importantly sometimes - will they be motivated to sell this or do you need to include some bonus for selling your product.) Does the current support group have the ability and capacity to support your product?
Go To Market - What marketing assistance do you need pre-launch and post launch?
Ecosystem - Do you need to incentivize anyone to do anything to get this started? Should you be visiting partners and evangelizing your product's value to them? Do you need some added flexibility from a supplier that requires a few site visits to build a relationship?
All of these factors should be considered for maintenance as well. Even if your solution fits the problem perfectly, there will be changes that need to be designed, built and tested. You will need ongoing budget for sales, support and marketing, as well as keeping the ecosystem invested in your product.