Product Management versus Project Management

Gartner reports that 85% of executives have, or are planning, to move away from projects and to agile product management by 2025. By 2022, the digital and agile enterprise transformations necessary to get there will approach $2 USD trillion.

So, why are executives moving in this direction? With agile now entering its third decade, it’s not because it’s a fad. Does product management and working with products give us something that project management doesn’t?

Project frameworks continue to fail us

The Standish CHAOS 2020 report is imminent, with its research showing that projects continue to fail. Unfortunately, the larger the project, the more likely it is to fail.

Projects focus on deliverables over value

The project paradigm focuses internal business owners on outsourcing a costed solution. Reporting thereby focuses on the output and the cost over whether the solution will meet a known need, or will even be of value by the time it is made available to customers.

Project lead time has a cost of delay

Projects suffer from start-up and stand-down lag. As temporary constructs, after the business case is defined, solution documented and associated budget costed, then a team is stood up. Each stage has approval gates. Ultimately, this leads to delays value being received. It is assumed that these activities are needed to reduce risk. Unfortunately, there is a hidden cost of delay.

To minimise project lag, existing teams are often given projects. Unfortunately, the result is added context switching that results in slower project delivery.

What is a product?

Products are defined by how they are used by the end-user. A product could be comprised of many widgets, services and IT systems. Some parts might be digital and others physical. Ultimately though, while a widget or IT system might be of value, the product must have value on its own to the end user. 

Important to this definition is the distinction between the end-user (the customer) and internal teams. An API that another team consumes isn’t a product. The API alone adds no value to external customers. A quality assurance system that supports technicians to assess whether planes should fly or when maintenance is needed isn’t a product either. It contributes value (safety) to an existing product – the airplane ticket.

Where do products focus? Value!

The processes, activities and metrics around products reflect a focus on value over, but not to the exclusion of, the output.

Evidence Based Management (EBM) helps executives to focus on value, giving them a language to define why an organisation should invest in a specific outcome.

Conclusions

Most executives are moving their organisations to Agile product management frameworks, like Scrum, over delivery through projects. Projects still have an important place – temporary constructs to outsource the delivery of a solution. And while organisations are shifting and evolving to this model, projects will still rein. While projects can add important value to a product, though, the use of projects in isolation of the bigger picture that product management brings needs to stop in order to minimise delays, reduce the likelihood of failure, and help the enterprise return its focus to value.

 

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