Why IT Teams Benefit from a Product Management Viewpoint
Refocusing the Lens
Yet another call from an IT team asking if we can help them transition from a project-focused view to a product-focused view of their work. I’d love to meet the person who started going across the world letting their IT professionals in on the biggest secret to getting amazing business support products out the door. OK, well, besides transitioning to Agile for product management.
The big trend today is for IT departments to look at their work as a strategic driver of value for the company.
To do this, they are revisiting their focus from “Get the job done and it probably doesn’t have to look too good or be easy to use” into “if we thought like Product Managers, our internal customers would love using the products we create for them – and become much more productive.”
IT Solutions = Products
Think about the multitude of solutions produced by the IT team, and then rolled out in different forms across the organization. These are products. Just like a product, these solutions need to be supported, upgraded to new platforms, potentially localized, and finally replaced when business rules change. Without the structure and discipline of looking at the issue through a product management lens, the results can be an unruly concoction of patchwork technology that is often more expensive to maintain than the value they create. What the organization needs is a coherent technology strategy that aligns to the corporate strategy, and one that drives solutions which deliver:
- high adoption rates
- low support costs
- long lasting results
And when you need solutions to be led and managed strategically – you need Product Management.
The Link between IT and PM
Many IT folks are initially concerned because product management is supposed to drive a revenue stream – and IT products don’t have that strong tie to the bottom line. However, here are the common problems faced by IT teams linked to key concepts used by Product Managers on a daily basis. IT teams need to:
- Manage a large portfolio of solutions and technology
- Rationalize applications across internal markets: divisions, business units, and geographies
- Prioritize their work according to corporate strategies and overall value creation
- Have a deep understanding of the business needs of their users
- Promote and educate users on new solutions
- Define a realistic technology strategy that evolves to meet the needs of the business
Without the strategic focus of a product management perspective, individual requests are solved one at a time, without prioritizing for the greatest value to the organization and without a strategic lens.
Here is an example:
A sales team requests a mobile version of their CRM running as a native iPhone app. Without further investigation, the IT department begins a process of building a new platform, and solving for connection to the CRM, security, and private downloading. A new sales person joins who prefers an Android phone and the IT team ports to that platform, as well as support for Asian characters to support the overseas sales teams who recently saw the iPhone app at a sales meeting and want it as well. In this simple example, three distinct solutions are created through your organization’s IT team driven by either the political weight of the person making the request, the lack of support for IT to say no, or the desire of the IT team to work with new technology.
Driving Solutions to Create Value
Imagine instead focusing on the breadth of need across all groups that need support – and creating the right solution – once!
The cost of technology demands strategic management of the assets that are created, and a clear summary of the value that is being generated from these assets.
Here’s how a Product Management lens can help IT teams reach great returns on an IT budget:
Profit & Loss Ownership
As IT assets don’t (usually) come with a revenue stream, the profit aspect is achieved by quantifying the value that solutions are providing for the organization.
In the example above for the sales team, what is the incremental improvement the native application would provide – time saved? Increased accuracy of reporting or data security? How much is this worth? Multiply that by how many sales team members are expected to adopt the application and you have a projection of “profit,” or as we like to say, Value Creation.
Quantifying asset value creation is one of the most important, and often the most difficult, task for the IT Product Manager.
The market for IT PMs is most often the internal ecosystem of the organization itself, although with PM thinking, nothing stops products from being sold or used outside the company.
Does the proposed solution address the entire ecosystem of the company? Consider using an internal facing PESTEL analysis to reveal insights into your ecosystem. For example, you can consider the political aspects of a country and community, but have you also considered the internal politics of the organization? Or the company’s size, whether they are growing and how quickly? What about their social and technology trends, or legal/regulatory requirements? What are the company’s strengths, weaknesses, opportunities and threats? What are the upcoming strategies and how can technologies support those?
Competition for IT solutions exists both internally and externally. Many solution providers external to the organization could provide solutions. The goal for the IT PM is to be in the discussions with these providers, and hopefully have a role in guiding decisions for choosing them. In addition, there are many “home-grown” solutions that exist. These may prevent newer solutions being adopted. A thorough Porter’s Five Forces analysis will often reveal many opportunities and challenges.
IT PMs may choose to segment along organizational functional lines, such as sales, marketing, or manufacturing; or they may choose different geographical areas, or a combination of both. However, a talented IT PM will look beyond these to see their internal segments according to specific needs. A detailed segmentation map will reveal the nature of your internal market as defined by their needs, not functions.
Proper segmentation and positioning are essential to a well-defined solution. Once in place feature prioritization, launch, and messaging will be strong and high adoption rates become the norm. A powerful positioning statement also serves as the vision statement for the solution, aligning stakeholders around the solution and helping to control scope creep. Clear positioning gives IT a leg up in providing real added value to the organization.
Often mimicking a B>B>C value chain, the IT team must know the personas in their internal segments. IT should have a clear understanding how their internal customers create value with the end customers. This map of the decision and task chain across the company is the best way to rationalize products across different functional groups and geographies.
Requirements Gathering and Prioritization
Often people come to the IT team with specific functional requests which may or may not actually solve problems. PMs know this rat hole and can dig into requests to uncover true needs. Once real needs are identified, then they move forward with specific requirements. Tying directly into personas and problem statements creates prioritized product releases which are then tied to value.
Being able to build a defendable forecast for adoption is critical to building P&Ls and prioritizing work. IT PMs need to know how to build forecasts both from historical data and do so even in the absence of data.
There is always a price to pay for new functionality. Sometimes this comes in the form of budget allocations, but most often it is the price of learning something new and integrating existing business processes/tools along with the new offering. It is important for IT PMs to understand the kind of price they are asking their “customers” to pay so that they can make adoption as easy as possible.
Roadmaps communicate a time-based view of your solutions, giving context from a strategic or tactical point of view. They are essential for planning and communicating, both up and down the chain of command. IT PMs need to demonstrate how their strategic plans support the organization and how their initiatives will coordinate with others across the organization.
Building and Qualifying Solutions
The most familiar of IT PM tasks is to implement solutions and ensure that they are producing the value that they targeted.
Launch, Marketing and Promotion
The most over-looked aspect of IT PM is that internal solutions also need to be promoted to the target users. Internal solutions should also track adoption rates high enough to justify the investment provided by the company. “Customers” in their internal markets need to know the solution exists and understand why and how to implement it into their work. This demonstrates the true value-add of IT to the organization.
Managing Existing Solutions
IT groups often fail to build on solutions once they have produced them. They treat each task as a new project, dropping old development like last year’s ratty tennis shoes. Experienced IT PMs know how to build solutions that apply to broad portions of the internal ecosystem and maximize the value that those solutions create over their lifespan.
End of Life
IT PMs need to assess the business value of existing solutions and know when and how to retire those solutions with minimal cost and impact to the internal ecosystem.
Finally, the IT PM is a driver of innovation, bringing new technologies to solve real business problems.
Start the Transition Now
Organizations who wish to remain competitive can no longer afford to manage their IT teams simply as a technical support cost center. By incorporating Product Management techniques to drive solutions, IT teams create measurable value for their organization and become trusted partners who drive business innovation.
Want to learn more?
Learn about the Optimal Product Process, or sign up to take our Optimal Product Management and Product Marketing training course.
About the Author
Colleen O’Rourke is a Principal Consultant/Trainer at 280 Group.
Colleen has 20 years of experience in the technology business, working in engineering as well as program and product management in startups to Fortune 500 companies. Colleen’s diverse experience includes complex CAD software platforms, project management SAAS systems, and hardware products and consumables manufactured in the US. 280 Group is the world’s leading Product Management training and consulting firm. We help companies and individuals do GREAT Product Management and Product Marketing using the Optimal Product Process™.