from product to project management

Why Organizations Transition From Project to Product Management

Most people working in IT have gained a large amount of experience with project management over the decades. It has become a very familiar way of ensuring that an IT project stays on track and eventually is completed according to the original brief and goals.

That’s the idea anyway. People who work in IT will also testify that project management does not always run smoothly, and IT projects still come in over budget, under-resourced, and not always delivering the value initially promised. Sometimes they are not even finished. Despite this, project management remains very popular, especially within enterprises.

However, a shift is emerging. For several years now, product management has grown more popular as a discipline. This trend has accelerated sharply recently, and product management is increasingly viewed as the most effective way to manage internal products, allowing for iterative improvements, delivering more value, and keeping them aligned to business outcomes.

The rise of product management

The rise in the use of product management very much reflects the fact that we live in a hugely product-centric world. Customers expect brilliance and innovation in their products – whether digital or physical, B2B or B2C – and are prepared to go elsewhere if those product expectations are not met. 

This has given way to a shift towards defined product propositions that are mapped closely to the evolving priorities of customers. There is a keen focus now on product-led growth where product development teams assume more of a strategic, high-profile role in their organizations. The success of this has led to the application of product manager strategies and approaches to internal IT project management.

Utilizing Agile

IT teams are now applying much more of a product management approach. This ties in with Agile methodologies, which also have a more iterative approach and have facilitated the use of product management. With Agile, a team works within set periods to deliver incremental solutions meant to improve products while keeping customers’ needs – whether external paying customers or internal business user ‘customers; at the forefront. 

For digital transformation – and for internal product management too – the key stakeholder that would be considered is the business going through the digital transformation, with the ‘customers’ being the different business departments, for example. In a competitive environment with steep competition, Agile enables businesses to continue to offer the right solutions and constantly iterate to provide improvements for their key stakeholders.

New to Agile? Read more here:

Many companies utilize Agile software development rather than thinking in a fully Agile way; they do not embrace Agile 100%. For example, it is common to follow a Waterfall approach until they are ready for development and will then move towards utilizing Scrum to complete development.

Product management enables IT teams to be more Agile, which results in greater efficiency, aligns all their activities with measurable business outcomes, and supports market-facing products, internal-facing products, and strategic objectives.

There are other key differences between a project management and a product management approach, including:

👉 Success based on value generation

With project management, success is defined by completing the project according to the time and resources allocated. With product management, success is solely determined by the value generated – far more in keeping with the demands of modern business.

👉 Focus on the entire product lifecycle

Project management has defined timelines that teams work on accomplishing. The result of this is that IT teams focus less on performance once the initiative is complete. However, with product management, there is a focus on the entire product lifecycle, which includes regular upkeep and improvement of the product over its entire life.

👉 More effective prioritization

With IT projects, the focus remains on delivering projects according to the defined scope and requirements. Product management employs constant hypothesis testing and roadmaps and focuses on the value provided by the various features. This means that the scope can and will change when needed, and as long as there is a clear and beneficial reason.

👉 More stable team structure

With a project management approach to IT, individuals work on many projects at once, and they are frequently reassigned mid-project. This is very common and can be disruptive to ultimate success. A product management approach utilizes cross-functional teams to manage one product at once with permanent teams. The benefit here is more focus on the product they are working on as well as stability.

👉 More aligned with business users

Any IT project success ultimately lies with business user adoption. If people aren’t using it, then the project has not worked. Project management defines the scope, builds it, and then delivers it months later without further interaction with business users, resulting in poor adaptation. 

Product management allows continuous interactions with business users allowing them to refine the product to their specific needs and helping shape better results. Frequent interactions with stakeholders supports success.

👉 Align IT investment to business outcomes

Perhaps the most significant benefit to a product management approach is the ability to align IT investment to business outcomes. IT teams have traditionally been viewed as a cost center, but now they are transformed and seen as delivering value back to the business.

Most enterprises have multiple IT projects ongoing at any time. These are often pivotal to the long-term success and growth of the organization, so should be approached with the appropriate focus. Product management is increasingly influential in achieving this, signaling a shift from project to product management.

Malte Scholz, CEO and founder, airfocus

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