DEVELOP AND MANAG E PR OD U C T S AN D S E R V I C ES

DEF INIT ION S AN D K E Y M E AS U R E S

Version 7.0.4

THE FRAMEWORK FOR PROCESS IMPROVEMENT

Experience shows that benchmarking’s potential to drive dramatic
2.0 Develop and Manage Products and Services
improvement lies squarely in making out-of-the-box comparisons
and searching for insights not typically found within intra-industry
paradigms. To enable this type of beneficial benchmarking, the
APQC Process Classification FrameworkSM (PCF) serves as a high-
OPERATING PROCESSES
level, industry-neutral enterprise model that allows organizations
to see their activities from a cross-industry process viewpoint. 1.0 >>> 2.0 >>> 3.0 >>> 4.0 >>> 5.0 >>> 6.0
Develop Develop and Market Deliver Deliver Manage
Vision Manage Products and Sell Physical Products Services Customer
The PCF enables organizations to understand their inner workings and and Services Products and Service

from a horizontal process perspective, rather than a vertical Strategy Services

functional viewpoint. The PCF does not list all processes within a
specific organization, and every process listed in the framework is
MANAGEMENT AND SUPPORT SERVICES
not present in every organization.
7.0 Develop and Manage Human Capital
Originally created in 1992 by APQC and a group of members, the
framework has experienced more than twenty years of creative use 8.0 Manage Information Technology

by thousands of organizations worldwide. The PCF is supported by

9.0 Manage Financial Resources
APQC’s Open Standards Benchmarking research. It is continuously
enhanced as APQC’s Open Standards Benchmarking team further 10.0 Acquire, Construct, and Manage Assets
develops definitions, processes, and measures. Please visit
APQC’s web site periodically for updates. The PCF is available for 11.0 Manage Enterprise Risk, Compliance, Remediation, and Resiliency

organizations of all industries and sizes at no charge by visiting

12.0 Manage External Relationships
www.apqc.org/pcf.
13.0 Develop and Manage Business Capabilities

HISTORY
The Process Classification Framework was originally envisioned as
a taxonomy of business processes. The initial design involved more
than 80 organizations from the United States and worldwide. Since
its inception, the PCF has been updated several times to reflect
changes in the way organizations do business.

In response to feedback from users of the PCF, APQC regularly

engages practitioners, consultants, and academics to develop
definitions based on real-world experience with the processes.
That collaborative effort resulted in this document: a listing of
processes with definitions and selected key performance indicators
from APQC’s Open Standards Benchmarking repository. This
particular document was developed with assistance from IBM.
The definitions contained in this document are to be considered
in conjunction with the PCF. The content in this document will be
updated according to research performed by APQC and subsequent
updates to the PCF. This document was created using PCF version
7.0.4.

Version 7.0.4  •  August 2016

 2.0 Develop and Manage Products and Services Definitions and Key Measures TABLE OF CONTENTS

2.0 Develop and Manage Products ans Services_________ 3 2.3 Develop products and services___________________ 4
2.3.1 Design and prototype products and services__4
2.1 Govern and manage product/service development 2.3.2 Test market for new or revised products and
program_____________________________________3 services________________________________5
2.1.1 Manage product and service portfolio________ 3 2.3.3 Prepare for production/service delivery______5
2.1.2 Manage product and service life cycle________ 3
2.1.3 Manage patents, copyrights, and regulatory
requirements____________________________3
2.1.4 Manage product and service master data_____ 3
2.2 Generate and define new product/service ideas_____4
2.2.1 Perform discovery research________________ 4
2.2.2 Generate new product/service concepts______ 4
2.2.3 Define product/service development
requirements____________________________4

RIGHTS AND PERMISSIONS ABOUT APQC

©2016 APQC. ALL RIGHTS RESERVED. APQC is a member-based nonprofit and one of the world’s
leading proponents of knowledge management, benchmarking,
APQC encourages the wide distribution, discussion, and use of
and best practices business research. Working with more than
the PCF and PCF definition documents for classifying and defining
750 organizations worldwide in all industries, APQC provides
processes. APQC grants permission for use and adaptation of the
organizations with the information they need to work smarter,
PCF for internal use. For external use, APQC grants permission for
faster, and with confidence. Visit www.apqc.org or
publication, distribution, and use, provided that proper copyright
call +1-713-681-4020 and learn how to Make Best Practices Your
acknowledgment is made to APQC. No modifications to the look or
PracticesSM.
content should be made in external venues.

Please use the following text when reusing the PCF in

external print or electronic content.

The PCF was developed by APQC and member companies as

an open standard to facilitate improvement through process
management and benchmarking regardless of industry, size,
or geography. The PCF organizes operating and management
processes into a number of enterprise-level categories, including
categories, process groups, and over 1,000 processes and
associated activities. The PCF and its associated measures and
benchmarking surveys are available for download and completion
at no charge at www.apqc.org.

2 Permission granted to photocopy for personal use. ©2016 APQC. ALL RIGHTS RESERVED.
 2.0 Develop and Manage Products and Services (10003)

Detailing practices and procedures related to the concept of developing and managing products and services. These are reflected
in the process groups Govern and manage product/service development program [19696], Generate and define new product/service
ideas [19698], and Develop products and services [10062].

2.1 Govern and manage product/service development program (19696)

Supervising the complete product/service program from innovation until its commercial success. Meeting the customer demand and
expectations. Conduct further development and innovation pertaining to business goals.

2.1.1 Manage product and service portfolio (10061)

Managing a portfolio of product/service offerings to take advantage of shifts in the market expectations, all the while
coordinating with the overall business strategy. Revisit the product/service portfolio in light of market opportunities,
and overhaul it to capture value created by these opportunities. Identify gaps between current offerings and the market
expectations to direct the organization’s R&D activity. Create new solutions, and revise or retire existing ones so that the
revamped portfolio aligns with Develop a business strategy [10015].

Key Performance Indicators:

• Total cost to generate new product / service ideas per • Total R&D cost per business entity employee for the
$ 1,000 revenue current reporting period

2.1.2 Manage product and service life cycle (10067)

Examining the market to identify customer required solutions. Assess the relevant market(s) to determine the products/
services that are needed or wanted by customers. Carry out quantitative and qualitative analyses to capture and investigate
products/services. Employ creative techniques that allow for a closer appreciation of the customer, and design relevant
solutions.

Process Insight:
Introduction of the new product/service may be timed to coincide with key marketing opportunities. Products and services
should be retired when their marketplace or cost effectiveness begins to decline below a predetermined threshold. Once a
product or service has reached marketplace maturity, its performance indicators should be continuously refi ned.

Version 7.0.4  •  August 2016 3

 ( 2.1 Govern and manage product/service development program continued )

2.1.3 Manage patents, copyrights, and regulatory requirements (19985)

Determining the attributes necessary to protect and safeguard intellectual assets, maximize the value of IP assets through
streamlined process, and collaboration between departments. Focus on needs to safeguard, critical assets, and assets’ value.

2.1.4 Manage product and service master data (11740)

Controlling/authorizing to enable services’ and products’ data and other critical data of these functions through a well secured
storage and accessibility processes backed by siloed applications/IT systems.

Process Insight:
Internal stakeholders may need access to product and service master data. Consider creating a central repository that is
accessible by multiple groups across the enterprise.

2.2 Generate and define new product/service ideas (19698)

Identifying and describing new product or service thoughts based on organizational objectives/targets.

2.2.1 Perform discovery research (10065)

Coordinating R&D activity to identify new technologies to integrate into the revamped portfolio of products/services. Conduct
early-stage R&D activity to close gaps between existing solution offerings and changing market expectations. Triangulate
appropriate technologies that can support the development of a revised product/service portfolio.

Process Insight:
Consider the ramifi cations of being too “bleeding-edge” (as opposed to being on the leading or cutting edge) with new
products. Key stakeholders in the marketplace may not be ready to adopt the latest and greatest technologies, increasing
the risk that the product or service will not succeed or be adopted.

2.2.2 Generate new product/service concepts (19669)

Producing and defining ideologies for new product/service offerings.

4 Permission granted to photocopy for personal use. ©2016 APQC. ALL RIGHTS RESERVED.
 ( 2.2 Generate and define new product/service ideas continued )

2.2.3 Define product/service development requirements (19990)

Encompassing the identification and capture of new product/ service requirements or potential improvements to current
products/services. Collaborating with members of the supply chain to ensure the feasibility of what is being defined in the
requirements. For example, a product with manufacturing requirements that supply chain cannot currently fulfill requires a
corporate decision to either upgrade manufacturing capabilities or abandon the new product. Enterprise-level effects and
needs must be considered. Depending on the nature of the final product or service, these requirements are often defined as a
set of abilities, such as availability or reliability, that influence product development decisions.

2.3 Develop products and services (10062)

Developing new products/services from scratch, including all activities associated with the design, prototyping, evaluation, and
market testing of these planned offerings.

Key Performance Indicators:

• Average time-to-market in days for new product/ • Percentage of new product / service development
service development projects project launched :
• Average time-to profitability in months for : - on budget
- existing product / service improvement projects - on time
- new product / service development projects • Total cost per $1,000 revenue to :
• Number of FTEs who develop and manage product and - develop and manage product and services
services per $1 billion revenue - support product manufacturing or service delivery
• Percentage of existing product / service improvement - design and develop products / services
project launched : - test market products / services
- on budget
- on time

2.3.1 Design and prototype products and services (19993)

Sketching and standardizing product and service based on the market. Analyze the data market competitiveness and
innovation attained for the product and service development.

Version 7.0.4  •  August 2016 5

 ( 2.3 Develop product and services continued )

2.3.2 Test market for new or revised products and services (19996)

Expanding on the marketplace analysis that took place earlier in the product development lifecycle by testing the market
against offerings. The results from this in-depth analysis will help the organization finalize product/service characteristics and
technical requirements and also identify any needed changes in the manufacturing and delivery processes that support market
delivery. To prepare a detailed market study that accounts for any changes in the global environment, the organization may
want to conduct a series of interviews, workshops, and focus groups with potential and existing customers.

Process Insight:
To prepare a detailed market study that accounts for any changes in the global environment, consider conducting a series
of interviews, workshops, and focus groups with potential and existing customers.

2.3.3 Prepare for production/service delivery (19997)

Devising business plans and procedures for manufacturing/operations/production and delivery of services offered by the
organization. Further in general terms the total amount of output that the manufacturing department is responsible to produce
for each period.

Process Insight:
The prepare for production process is often a key target for Lean initiatives to ensure operational and cost efficiency

123 North Post Oak Lane, Third Floor

Houston, Texas 77024-7797
800-776-9676 phone • +1-713-681-4020 • +1-713-681-8578 fax
pcf_feedback@apqc.org • www.apqc.org

6 Permission granted to photocopy for personal use. ©2016 APQC. ALL RIGHTS RESERVED.