What is Digital Product Engineering and How Can It Boost Your Business?

With the product engineering services market expected to reach more than $1.2 trillion in 2026, it’s clearly a sector on the rise as our lives are increasingly online. Businesses looking to gain—or maintain—a competitive advantage often find digital solutions and are a key part of their strategy.

A digital product enables your business’s expertise to be leveraged as a scalable, profitable  offering, which can diversify revenue streams, extend or better enable service offerings, even change the future of your business. However, building innovative products that are sustainable and can evolve over time takes more than just addressing the right problem; you also need to invest in the technology responsibly. Let’s look at key aspects of digital product engineering and the steps involved in a new product development project.

What is digital product engineering?

At its core, digital product is all about solving people’s problems while providing exceptional user experiences. Digital product engineering is about the act of producing the technical, data and integrative aspects of the mobile app or website that delivers that experience.

Product engineering teams at best should work alongside research, strategy, product design, and product management. Unlike many other digital product engineering teams, we at Highland advocate a singular, innovative end to end approach. This proven framework involves unifying specialists into a small, powerful team working together in a digitized ecosystem to great effect. By doing this you take on less risk, get to market faster, and have more assurance that the product will be successful at launch and beyond.

Why is digital engineering a critical process?

Engineering digital products the right way helps organizations to create successful products that increase revenue, gain happy customers, and drive your business forward — all while creating a long term asset that can grow with the business. These are the key benefits of a product supported by robust digital product engineering:

New revenue streams - a digital product can provide a business with an ongoing regular income in addition to other services offered. And using data to identify gaps in the market, you can identify your niche and develop products based on predicted customer demands and user needs.

Reach a wider audience - a digital product can massively increase your reach, allowing you to serve many more customers. It can really expand your potential market, particularly when you focus on a specific niche.

Gain competitive advantage - scalability is a real advantage of digital product engineering, helping you to stay ahead of the competition, grow sustainably and respond to market trends. Using real time data and customer insights to inform decision-making helps you to make product improvements as well as a strategic product roadmap for the future.

Quick time to market - a streamlined development process and efficient workflows reduce the time it takes to get a new product (or redeveloped one) to market. Digital product engineering speeds up a business’s responsiveness to changing customer demands and keeps it agile in an evolving market.

High customer satisfaction - using a customer-centric approach to product development means that you create something that meets customer needs, is really user-friendly and delivers quality customer experiences every time. Happy customers will be loyal, returning to your business and product again and again.

Support innovation - digital product engineering uses cutting edge new technologies like artificial intelligence (AI), machine learning and virtual reality (VR) to develop smarter, more innovative products. You can tailor products to customer needs and ensure a high quality solution is launched to market

Enable digital transformation - today’s businesses can’t afford to stand still. The modernization of legacy apps and ongoing digital product development are part of a future-proofing process. Automation can improve business processes, utilize resources better and reduce repetitive tasks. Technological advancements can really improve workflows, freeing up team members to focus on the business needs that will drive your organization forward.

Mitigate risks - good digital engineering can prevent threats like data leakage, security issues and vulnerability to cyber attacks

How does engineering show up in the stages of new product development?

Creating a new product that is well-engineered is critical for long term business success. But getting to the stage of having a sustainable, well-developed technological asset should be done responsibly. You need to be careful about building too much (or anything at all) too soon. Software product engineering isn’t a linear process, but follows a product development cycle. It’s a constant learning process: create something, observe its usage, and iterate.

A strong product engineering team will build in such a way that will establish a strong technical foundation, while enabling nimble iteration as you adjust your offering throughout its product lifecycle. This iterative approach to software development is the promise of Agile methodologies; as you learn more and gain confidence that your product is heading in the right direction, you can invest more and right-size the software engineering resources.

Think of it like a construction engineering project. You begin by researching the environment, and designing models to identify how the building will be supported, how the space would flow and function, how the systems would fit together, and so on. You clarify what you can before making major investments in built infrastructure; further down the line you invest in the materials and the construction team.

Initial Stage: Clarifying Opportunities

Here, you’re establishing the problem to solve, and testing ideas for your customers. This a pre-development phase where you’re validating if the market opportunity is right for a digital product. The investment in engineering is very low in this stage, with budget being allocated to research and early design. You may not build anything at all; engineering at this stage may be testing new technologies or de-risking technical hypotheses.

Once it’s apparent there’s a digital opportunity to pursue, it’s very helpful to build fast and scrappy prototypes — these could literally be on paper, or simple, clickable screens — to see how your product could work and how people respond to it. You don’t need to worry about how robust they are at this stage. They’re going to be seen by relatively small number of users, not an entire customer base; the goal is to see if your initial thinking about this product is correct and likely to get traction.

Middle Stage: Validating Product Concept

By now, you’ve had some initial feedback from customers and you’ve gained clarity on the problem to solve. You’re confident enough to move the project forward and start building something. However, you still want to approach your investment in engineering responsibly; it can be a good idea to keep engineering light, and “build to learn.”

Start creating functional prototypes. These can handle basic user states and light customer data. They should have just enough functionality to give prospective customers something to try and use. You’re not thinking about scalability yet, just connecting usable pieces of the customer experience to get meaningful, behavioral feedback. Real world responses, from real customers (not just internal stakeholders) enable you to adapt your product’s features, and build with greater clarity.

Focus on doing one or a few things well, rather than cramming the new product with a whole host of functionality; focus on the unique value of what you’re building and do that extremely well. There’s no need to over-engineer it. This functional prototype — or pilot product — is likely to uncover risks that’ll need to be addressed. You’ll learn what’s necessary to build something more robust and with scalability in mind.

Later Stage: Building a Scalable Digital Asset

Now engineering can really ramp up. This is a time where increased investment is required, and justified, as you know the opportunity if proven and significant, and the appropriate budget can be allocated to digital product engineering.

Stand up the full product team, align a product manager, establish quality assurance processes and define product development requirements. It’s time to focus on the product architecture, product support and what’s necessary for scale. All while iterating on priorities with discipline.

Your software product engineers will focus on mapping the technical aspects of the digital product. They’ll determine what’s needed to ensure the product can cope with growing usage demands when it launches and as uptake increases.

Again, remember that even this phase of engineering isn’t a linear process; it’s still about being adaptable and learning continuously. Keep testing, conducting behavioral research and using that feedback for quality assurance and optimization to make the product better. The feedback helps with prioritizing the backlog to ensure the most important things are worked.

Discover the digital product development process in detail

Alongside this engineering phase, other activities will be undertaken. Execute on your go-to-market strategy, and build demand on social media, or other channels. Finances need to be mapped out and a pricing plan devised. Then there’s the launch campaign, and performance metrics to be thought about. And the product’s ongoing support, promotion, and future development needs to planned for as well.

Case Study:  

Security Organization

Highland worked with a globally recognized security and governance organization that wanted to expand their reach and revenue by launching a digital product focused on enterprise security.

Our market research highlighted the best adoption strategy, existing product solutions, and existing business assets. Using qualitative user research methodologies, our team uncovered unmet user pain points and user needs. This market research identified an unexpected target audience of different customers.

With this target audience in mind, we designed an MVP that leveraged the organization's expertise in a unique digital product. The impact of this process was a $300M+ annual recurring revenue opportunity with a new part of the market.

Read the case study in full
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Boost efficiency, revenue and customer satisfaction with innovative digital products

Imagine leveraging your particular industry expertise into an accessible digital product. A strategic, technological leap with an innovative technology solution can give you a competitive edge and provide new revenue streams. Put simply, a well-engineered digital product can be critical for your long-term business success.

Highland’s seamless, unified, end-to-end approach, and wealth of expertise, gives your company the best chance at building and launching a well engineered digital product that will hit the mark.

We’ve developed successful partnerships with companies in sectors from education to healthcare, professional services to corporate incentives. And we can help you too!

Download “The Essential Guide to Launching a Digital Product for Experts & Expert Firms”

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