Strengthening the link between business decisions and RE: Long-term product planning in software product companies Laura Lehtola, Marjo Kauppinen, Jarno Vähäniitty Software Business and Engineering Institute Helsinki University of Technology P.O. Box 9210, FIN-02015 TKK, Finland Laura.Lehtola@tkk.fi, Marjo.Kauppinen@tkk.fi, Jarno.Vahaniitty@tkk.fi Abstract Long-term product planning (i.e. roadmapping) is an approach that companies operating in the software prod- uct business have used to bridge the gap between business planning and product development. A strong link between strategy and product development is important, since companies developing software products need to select requirements for forthcoming releases based on the busi- ness decisions of the company. However, in practice, connecting requirements engineering decisions and busi- ness management is far from trivial. This paper reports lessons learned from four software product companies that recognize the need for more business-oriented long- term product planning. The study was conducted using the action research approach. We identified four prac- tices that seem to strengthen the link between business decisions and requirements engineering. These are: 1) explicating the planning levels and time horizons needed in product planning, 2) separating the planning of busi- ness goals relating to products from R&D resource allo- cation, 3) conducting open-ended planning by pre-defined rhythm and 4) emphasizing whole-product thinking. 1. Introduction For a software company, product development is an investment that should provide maximal added value [3]. Providing value for different customer and end-user seg- ments by means of the product is a lifeline for the sales of the product and, via that, to the business of the company. This means that a company needs the ability to implement the most valuable requirements to the software product in each product release. Especially in the software product business, the role of a successful selection of the feature enhancements (i.e. requirements) for the product releases is recognized as extremely important [19] [8]. However, market-driven requirements engineering seems to entail special challenges [11]. Selection and pri- oritization of requirements in particular has been recog- nized as a challenging activity [12] [5] [23]. Many of the challenges involved in the selection and prioritization of requirements are related to an inability of those involved to understand the business value of individual require- ments and the business consequences of the available op- portunities [14] [23]. The need to make business-based product development decisions means that a company needs the ability to con- nect business management and software development [21]. Only by integrating upstream (that is, long-term planning) and downstream (that is, software development) processes, value-based decisions concerning the future features of the products can be made [7] [13]. Unfortu- nately, in research on requirements engineering, the viewpoint has mostly been that of bespoke software de- velopment [11], while requirements engineering before projects (e.g. long-term product planning) has not had that much emphasis placed upon it. Long-term product planning (typically called road- mapping [10] [17]) is one way that companies have used to bridge the gap between business planning and product development. Roadmapping as a technique is widely used in manufacturing industry [18]. However, application of the approach in the software engineering field is rather new and less investigated. Also, the practical implications of long-term product planning in software product com- panies in terms of the state of practice or good practices are not widely known. In this paper, we investigated the current state of long- term product planning in four Finnish software product companies that operate in international markets. As a re- sult, we provide lessons learned from how the companies are linking business decisions to requirements engineering (RE) by long-term product planning. The research is an on-going part of a long-term action-research-type research relationship with the case companies. Section 2 presents related work. Section 3 presents the research design. Sec- tions 4 and 5 present the results, while Section 6 con- cludes the paper with a discussion and suggested direc- tions for further research.