A Digital Product Engineering Guide for Businesses

Insight categories: Technology

Companies looking to modernize, create efficiencies, and pave the path to a more sustainable future increasingly turn to digital product engineering for their solutions. The product engineering services market is expected to reach $1,277.15 billion in 2026, and those using digital technologies to their advantage have a definite edge. 

However, companies may struggle to find and keep the right tech talent in-house to fuel their digital engineering strategy – especially now. Navigating this and other common challenges is key to crafting and implementing a successful strategy.

In this article, we’ll explore digital product engineering, how it benefits different types of businesses, and what challenges stand between organizations and digital product engineering success. You’ll find helpful tips throughout the article based on our own wide-ranging experience.

What is Digital Product Engineering?

Digital product engineering uses innovative software products, digital technologies, and IT architecture to create products that deliver exceptional user experiences and solve real-world problems. 

It covers all aspects from concept to completion encompassing digital product design, development, and delivery. Digital product engineering involves research, analysis, product design, development, testing, ongoing maintenance, support, and product optimization throughout its lifecycle. The goal is to deliver robust digital products that meet customer requirements while providing an optimal user experience.

Recommended reading: If You Build Products, You Should Be Using Digital Twins

Phases of Digital Product Engineering

The phases of digital product engineering are key in developing a successful digital product, from gathering requirements and formulating a system architecture to coding and testing. These steps can be broadly grouped into five phases: 

  • Ideation
  • Design
  • Development
  • Testing
  • Deployment and ongoing maintenance

The team defines the product’s goals and objectives in the ideation phase. Based on user feedback and market research, they also determine what features to include. Then, during the designing phase, the team creates wireframes, mockups, and prototypes to visualize how the product will look and function.

digital product engineering

In development, software engineers code the product according to its specifications while accounting for scalability and performance considerations. Engineers perform rigorous quality assurance in the testing phase to ensure they fix all bugs before launch

After successfully passing tests, the digital product is ready for deployment.

These five phases of digital product engineering enable teams to build reliable products that meet customer needs while providing an optimal user experience.

How Digital Product Engineering Can Help Your Business Grow

From concept to launch, digital product engineering helps organizations create successful products that maximize efficiency and drive revenue growth.

Improved Time to Market

Reducing time to market is crucial for any business looking to stay competitive. Digital product engineering can help organizations reduce their time to market by streamlining their development process and driving efficiency throughout their product cycle.

Businesses can quickly develop, deploy, and test their products by leveraging the five phases of digital engineering. This helps teams identify issues early and launch products that meet customer needs.

Additionally, digital product engineering enables organizations to quickly adapt to changing customer demands and remain agile in a rapidly evolving market. 

Enhanced User Experience and Optimization

User experience is essential for any product’s success. Using user-centric design principles, digital engineers can create highly optimized products for users’ needs. This ensures that customers have a seamless experience with each interaction, no matter how complex or simple the task may be.

enhanced user experience and optimization

By leveraging technologies such as artificial intelligence and natural language processing, digital product engineers can also create intelligent products that learn from user behavior and optimize their performance over time.

Ultimately, digital product engineering allows businesses to develop products with enhanced user experiences and optimized capabilities, improving customer satisfaction and loyalty.

Recommended reading: AI’s Impact on Software Development: Where We Are & What Comes Next

Competitive Advantage with Innovative Products and AI Solutions

Digital product engineering is a powerful tool that can help companies create smarter, more innovative products using artificial intelligence, natural language processing, and machine learning technologies. This allows companies to provide customers with personalized experiences and services tailored to their needs. Digital product engineering also enables businesses to scale up their operations more quickly, helping them stay ahead of the competition through speed and agility.

What does this look like in practice? Let’s take this leading UK retail bank as an example. The company needed a new solution to solve the persistent lack of business and operational insight caused by its legacy software’s inability to handle the massive volume of data generated by real-time events and transactions. 

We designed and implemented an AIOps-based solution that uses AI to:

  • Provide real-time insight and automate alerting.
  • Detect and flag any anomalous behavior and indicators of failures in real time.
  • Ensure complete transparency into the hardware, network, storage, and application layers across the business.
  • Make it easy for decision-makers in operations, product, and business teams to search, analyze, visualize, and act on relevant insights.

In short, this example of digital product engineering enabled the bank to activate its important data and put it to work improving customer experience in every channel, in real time. 

Reduced Operational Costs and Improved Customer Demands

By utilizing technology such as AI and a digital product engineering strategy, businesses can develop products that can better predict customer demands and preferences while reducing operational costs. This reduces the time it takes to respond to customer inquiries and provides a more efficient way of managing operations.

Additionally, digital product engineering allows businesses to create customized applications for their customers, providing an improved user experience that meets their needs. This helps reduce operational costs while ensuring customers have the best possible experience.

Common Digital Product Engineering Challenges 

Digital product engineering is an exciting and rapidly evolving field that has enabled businesses to create innovative, efficient products. However, it can also present some challenges.

Talent shortage 

The talent shortage in digital product engineering is a growing concern for businesses looking to enter or evolve. Digital product engineering requires a diverse range of professionals with specializations in each area across the development cycle, making it increasingly difficult to source quality candidates with the right skill set.

Almost 95% of employers looking for tech talent have encountered a skills shortage over the past year, and some analysts expect we’ll see a global shortage of more than 85 million tech workers by 2030.

This can lead to delays in development and higher costs, as businesses may need to invest more in training staff to develop their skills. Many companies work with a digital product engineering partner to access top talent and scale their operations when needed.

Pressure on the R&D budget

One of the biggest challenges facing digital product engineering is the pressure on R&D budgets. The cost of research and development can be a significant expense for businesses, particularly in today’s competitive market.

Companies must balance their budget between investing in innovative products and services and maintaining existing products. Additionally, companies have to consider how much money they should invest in user experience (UX) design and other areas that are key to creating successful digital products.

This pressure can lead to fewer resources being available for product innovation, ultimately hindering a company’s ability to stay ahead of the competition.

To solve this, businesses should focus on creating an appropriate balance between these two priorities while also ensuring they are allocating enough resources toward UX design, user testing, and other activities related to digital product engineering.

Battling legacy systems and processes

Legacy systems and processes can be a major obstacle for digital product engineering teams. Many companies have legacy systems in place that are outdated and difficult to maintain. This can lead to delays and additional costs in product development as teams must work around the existing infrastructure.

In addition, legacy processes can limit opportunities for innovation as teams need to adhere to existing protocols or risk breaking the system. To overcome this challenge, businesses should consider investing in new technologies that are better suited for digital product engineering, and one efficient way to do this is to outsource.

Transformational change is hard. By involving a team of subject matter experts to evaluate internal processes and create a strategy for change management, businesses can get the support they need for their team and gain better insights into their product development process.

Competing priorities

Competing priorities can be challenging for companies implementing or already utilizing digital product engineering practices. With limited resources and tight timelines, balancing competing demands and effectively prioritizing tasks can be difficult.

To ensure the team can stay focused and productive, stakeholders must work together to identify clear objectives and manage expectations. This should include setting realistic goals and timelines, as well as providing regular feedback and support throughout the process.

Additionally, it is vital that all stakeholders understand what’s required in each digital product engineering phase to keep the project on track. By taking these steps, digital product engineering teams can better manage their workloads and deliver results more efficiently.

Digital Product Engineering FAQs

Here are a few of the questions our team is most commonly asked by business leaders regarding their digital engineering projects.

What are the most impactful business benefits of a digital product strategy?

A successful digital product strategy provides beneficial business outcomes by:

  • Enabling the business to grow a more diverse and differentiated product portfolio.
  • Delivering superior customer experiences with high-quality products that can evolve to meet their needs.
  • Providing a data-backed product roadmap to guide budget and resource allocation.
  • Fueling business growth with more profitable products and digital solutions.
  • Supporting organizational and digital maturity goals and business sustainability by evolving or replacing legacy products, updating technical architecture, and optimizing business processes and operations.

What are the main benefits of working with a digital engineering services partner?

A partner with deep experience in digital product engineering provides a skilled team, software product engineering support, an agile product development approach, and a proven process for developing innovative technology solutions. They can augment your in-house team and resources with specific types of engineering expertise, digital accelerators based on a proven framework and best practices, and other digital advisory and executive support services.

How can we get started with digital product engineering?

Getting started with digital product engineering can be daunting, but it is also an exciting opportunity to create innovative products and solutions. The first step is understanding and evaluating your internal process, technology, and critical change requirements.

get started with digital product engineering

Enlisting the support of an experienced partner to help with ideation, assessment, digital advisory and development can help. Our digital product engineering services help companies develop a plan tailored to their unique needs for user experience, technology, resources, budget, and timeframe. Identifying the right opportunities for your organization is essential and will fuel your path to sustainability for years to come.

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