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Lifecycle Management Advisory Board

Cannibalizing a Successful Product

The Challenge

A Silicon Valley software company with a suite of Business-to-Business accounting products, including one very popular program introduced 3½ years before, was confronted with a major dilemma. The company had developed a superior version of its flagship product that would result in significant time and cost savings to customers, and that would be offered at a premium price. However, since the new product required 3-hours of re-training for each user, company officials were concerned that this might be a serious impediment to its plans to ultimately cannibalize their leading product. With competitors making inroads in this arena, company executives needed to have a critical discussion with their customers and with their competitors' customers.

The Solution

In consultation with the company, 7 current key customers and 5 of its largest competitors' customers from across the U.S. were identified and invited to participate in a one-day Lifecycle Management Advisory Board meeting. All participants were IT executives who were responsible for IT purchasing.

After an opening presentation by the company, the trained moderator proceeded to engage the participants in a detailed discussion based on a series of carefully designed "starter" questions. The meeting would include a designed "Matrix Exercise" that would compare, contrast, and "score" all existing and forecasted products based on a specific set of attributes, weaknesses, client-service, and pricing. The questions were:

1. Based on currently running accounting software systems, what are some of the continuing unmet needs? Is there a Wish List?
2. How would you compare, contrast and score all existing systems, company service and price?
3. Among all accounting software systems, how much of a man-hour burden is training? What is an acceptable time investment for training on a new product?
4. What improvements would make our flagship product even more valuable?
5. Is there a performance "sweet spot" that would overwhelm all other factors in deciding to switch systems?
6. What would be the impact from gradually replacing the flagship product with the new system?
7. What is the average lifespan of accounting software systems within your organization?

Other technical questions pertaining to the company's confidential proprietary technology were asked, but are not reproduced here.

The Outcome

From participating in and witnessing the robust discussion among the Lifecycle Management Advisory Board, further crystallized by the written Report and Analysis of the meeting, the company was able to reach a level of confidence regarding the optimal timing and the best means to introduce its latest software, which would not leave them vulnerable in the marketplace.