It's easy to confuse the disciplines of project manager and product manager. Simply put, the development of the product or service falls to the project manager, while the market success of software and system products depends on the skills and competence of the product manager. This article provides an overview of software product management and the role of a product manager, and describes concrete practices that can boost an organization's software product management and thus the success rate of products in terms of predictability, quality, and efficiency.
Imagine loggers in a forest. They work hard and cut tree after tree. It is a huge physical effort and their foreman drives them hard to stay on schedule. He wants to cut a certain number of trees per day and provides the workers with all they need to achieve this objective. Suddenly the client shouts, "you cut down the wrong trees!" Despite all the hard work of the foreman and his team, they did not manage to deliver the intended customer expectation. Sound familiar? Indeed, this is what I've observed with many software products. Organizations are pushed to the extreme to be ever more efficient and create products at a low cost, but when it hits the market and sales are lower than expected or customers demand several changes during the development process, margins are dramatically reduced from initial targets.
Successful product management means delivering the right products at the right time for the right markets. Naturally, the success of a product depends on many factors and stakeholders. However, it makes a big difference when a person is empowered to manage a product from inception to market and evolution – and the same person is held accountable for the results. This is the product manager.
At Vector Consulting Services, we have learned from experience with many clients in different industries that success comes from anticipating and meeting the customer's needs together with being on time and on budget. Technical product development – such as for automotive components, communication solutions, defense systems, or IT infrastructure – traditionally focuses on the project perspective and operationally executing a set of given constraints within the triangle of content, budget, and time. Often, it becomes clear too late that customer needs were different from what is built.
Project execution can be rather easily improved by means of CMMI®. Today, there are a lot of exciting results from optimizing projects in terms of cost and cycle time [1, 2]. However, the software product management responsibility and underlying processes remain vague. I often see product definition, road mapping, and marketing decoupled from the engineering project-related processes, which creates deficiencies and overheads such as heavy changes in requirements and missed market opportunities. It is like the loggers: The project runs well, but with the wrong results.
While an organization can embark on the general principles of product management , not much specific guidance is available for software product management. This article will provide a small introduction and tutorial on software product management.
What Is Software Product Management?
Product management is the discipline and business process governing a product from its inception to the market or customer delivery and service in order to generate the largest possible value to a business. A product is a deliverable that has a value and provides an experience to its users. It can be a combination of systems, solutions, materials, and services delivered. Product management provides leadership to activities such as portfolio management, strategy definition, product marketing, and product development.
Often, the roles of product manager, project manager, and marketing manager are unclear in their distinct responsibilities. To successfully define, engineer, produce, and deliver a product, these three roles need to be clarified [3, 4, 5]. Figure 1 provides an overview of an archetypical product life cycle and shows how different projects integrate towards an end-to-end view of the product. It highlights the differences between managing a project and managing a product. The project is a temporary endeavor undertaken to create a product. The project manager focuses on delivering one specific product or release while meeting time, budget, and quality requirements. The product manager looks to the overall market success and evolution of this product together with its subsequent releases, related services, etc.
Figure 1: Software Product Management Spans the Entire Product Life Cycle
To clearly assign responsibilities, there should be three distinct managerial roles:
- The product manager leads and manages one or several products from inception to phase-out in order to maximize business value. They work with marketing, sales, engineering, finance, quality, manufacturing, and installation to make the products a business success . They have business responsibility beyond the single project. They determine what to make and how to produce it, and are accountable for business success within an entire portfolio. They approve the roadmap and content and determine what and how to innovate, and are responsible for the entire value chain of a product following the life cycle, asking: What do we keep, what do we evolve, and what do we stop?
- The project manager determines how to best execute a project or contract. They ensure that the specific project is executed as defined and are accountable for business and customer success within a contract project. They manage the project plan and its execution and ask: How do we get all of this accomplished?
- The marketing manager determines how to sell a product or service in order to create a customer experience. They are accountable for market and customer success and have a profound understanding of customer needs, market trends, sales perspectives, and competitors. The marketing manager communicates the value proposition to sales and customers, drives the sales plan and execution, and asks: What markets will we address?
One might argue that in many organizations, one or several of these roles are laid out differently and might simply be coordinating based on directions received from management. While this has certainly been observed, such organizations often encounter interface and responsibility battles and have a lack of ownership as a result. These three roles are necessary and need to be empowered – and held accountable for results. This not only stimulates motivation, but also facilitates faster and more effective decision making in a company [2, 3].
Over the years, Vector Consulting Services has investigated root causes of such insufficient product management and its impacts on hundreds of technical products with different origins, development paces, and sizes [1, 4]. Figure 2 provides an example of how product management failures cause rework, scope creep, and delays. Insufficient product management typically lacks vision, has an unclear market and business understanding, and doesn't involve the right stakeholders (see the left side of Figure 2). This leads to initial symptoms such as a conflict of interest on priorities and contents and incomplete requirements. From here, it's a vicious circle with changes that necessitate rework, which in turn causes delays, which in turn causes scope creep – and so on. Poor product management causes insufficient project planning, continuous changes in the requirements and project scope, configuration problems, and defects. The obvious (yet late) symptoms are more delays and overall customer dissatisfaction due to not keeping commitments or not getting the product they expect (the right side of Figure 2). Being late with a product in its market has immediate and tremendous business impacts [6, 7, 8]. In the contract business, this often means penalties and, in practically all markets, it reduces customer loyalty and overall sales returns.
Figure 2: The Results of Insufficient Product Management
The tangible problems can't be fixed by pushing a button; instead, the upstream root causes need to be fixed. It would be fatalistic to just take it for granted that requirements changes will always cause delays or that business cases are always wrong. Rather, an empowered product manager acting like an embedded CEO (and held accountable for results) will try to fix internal problems and adjust to external constraints and needs – similar to a CEO who cannot simply excuse low performance with bad circumstances. Having worked with different companies in a variety of industries on software product management, we emphasize what we call the 4+1 best practices to optimize product management.