How is Software Different?

As we have seen, Product management is a mature discipline for physical or “bricks & mortar” products in industries such as groceries, retail goods, planes, trains, automobiles.

For physical products, typically design and manufacturing takes place before the discipline of product management even gets involved. This is because product designs and manufacturing for physical products have long lead times. Even incremental changes to physical products can take a long time to implement. For example, changing the recipe of a breakfast cereal might involve sourcing new suppliers, reconfiguration of processing plants, extensive testing and certification. Thus, the evolution of physical product is a series of discrete increments.

The original conception of the Product Manager role places it in the marketing function. The development of ideas around product management throughout the 20th century has honed the focus to understanding customer needs and finding a way to satisfy those needs using what are termed “the four P’s”: the right product, in the right place, at the right price, using the right promotion. Or alternatively “the 4 C’s”: commodity, cost, communication, channel. Either way, their metrics are sales and profits.

This makes sense. New physical products have long development and production lead times, so Product Managers focus on things they can control like place, price, promotion, and leave the development of the underlying product to others.

By contrast, for contemporary technology products – and especially those involving software – discovery of product requirements occurs throughout the development process. Ideal solutions are arrived at through continual development both before and after first use by customers. In fact, in many cases product development never ends, and evolution of the product becomes a continuous process. This means the very nature of product management is different. Product management must be involved from the beginning of product development and that involvement must continue as the product changes over time.

The consequence is that, in the software world, separation of product management from product development is simply not feasible.

Product Managers can no longer simply rely on place, price, promotion to succeed. Aligning product development with other contributors to products relies on understanding the customer’s needs and the organisation’s intentions for the product, something product management is uniquely positioned to do.

In the modern world, product management is about owning the vision, design, and execution of a product. And whilst Product Managers may not be expert-level professionals in any one aspect, they are involved in conceiving, planning, designing, developing, verifying, validating, testing, launching, iterating, and retiring products.

Some product management frameworks, including some still in use by technology and software product companies – draw a stark distinction between “new product development/acquisition” and “commercialization & manufacturing operations”. In the “bricks and mortar” world, where product developments typically have long lead times, this makes sense – product managers spend most of their time commercialising already-developed products.

However, software (especially given the nearly universal adoption of agile methods) is fundamentally different in that product development happens continuously and never ends.

Here are some of the key differences between physical product management and technology product management.

Physical Product Management Technology Product Management
Product is “given” to the Product Manager Product Manager decides what to build
Product changes have long lead times Products have short lead times
Big design up front Continuous change and redesign
Manufacture/duplication costs time+money Manufacturing / duplication is instant & free
Difficult to add value after development Easy to continually add value

The bottom line is that technology products (especially those based on software) are different, and these differences mean that traditional product management does not work. A new approach is needed, aligned with agile methods.

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