Product management vs project management: You’ve most probably seen these two approaches thrown around interchangeably. Though they share similarities on a peripheral view, they both have inherently different core functions that influence their processes. So what’s the difference between these two management approaches and which one might your organisation need?
What is a Product vs Project?
Before we get into how their management approaches are different, we need to first understand the difference between a project and a product.
PMI defines a project as a temporary arrangement with a ‘defined beginning and end in time, and therefore defined scope and resources. A project is typically set up to create a product or service and the team is typically disbanded at the completion of the project.
The job of a project manager is to oversee predefined projects, thus having a smaller input into the definition and prioritization of goals and projects. A project manager can be seen as the person who executes product development.
A product can be understood as a system (a good, service, platform, application, etc.) that is designed and maintained to solve both customer and business problems to achieve more value. A product does not have a defined end date and is constantly being adapted to suit the market’s needs.
A product management team is more long-term and stable than project teams as they have continual activities that require longevity and cohesion. Product managers play a more strategic role in the prioritization of initiatives that ensure strategic market value and success. Product managers are in charge of getting market success.
What is Product Management vs Project Management?
You can maybe already guess how their management approaches might differ just from their definitions, but we’ll elaborate a bit more to give a clearer picture.
Product management is a strategic function of an organisation that aims to identify, build and maintain value-producing products of the organisation to achieve market success. The focus is largely customer-oriented with the aim of discovering current and potential market needs and demands to inform product development plans and strategies. An important note is that in product management, success is completely relative to the product and company goals rather than the product alone.
Though it covers a wide breadth of activities and objectives, the three core functions of project management include:
- Research, Feedback and Data Analysis: Tasked with gaining in-depth knowledge on the organisation’s pre-existing products, competitors, and market. They also have to ensure that proper feedback processes are in place to allow for future improvements to be made based on relevant and accurate information.
- Strategy Development: Based on their in-depth knowledge and customer focused approach, product managers are tasked with producing product vision and strategy to take advantage of gaps in the market and produce value for customers.
- Cross-functional communication: With its more strategic role, product management involves active communication with key stakeholders across the entire organisation. This continual cross-functional communication requires a clearly structured product roadmap that can be communicated clearly and effectively.
Product management is a newer form of management that has been making ways specifically in the Information and Communication Technology industry with the accompanying rise of iterative project management methodologies. It arose out of the changing nature of technology that is highly competitive, fast-paced and constantly adapting to new changes in the market.
Product management aims to find the sweet spot between the user experience, organisations, and technology – and it isn’t an easy process. To understand more , make sure to check out our full guide to product management.
PMI defines project management as the ‘application of knowledge, skills, tools, and techniques to project activity to meet the project requirements. The focus is largely on achieving the pre-defined and set out goals and objectives as well as making sure projects are completed on-time, on-budget and within scope. Here, project success is measured based on project-dependent metrics.
Some of the core functions of project management include:
- Achieving the project objective within constraints: Projects, no matter what size, are typically running under four key constraints: scope, time, budget and quality. Being able to achieve the set out goals within these varying constraints is the balancing act project management is made to address
- Project breakdown: Projects need to be effectively broken down into phases and/or tasks to help teams easily make and track progress. Effective project management involves the implementation of the best practices that suit the team’s chosen process and methodologies to enable easy resource allocation, scheduling and cost management.
- Monitoring project progress: Effectively monitoring and responding to the changing elements within the project duration is critical to project success.
- Optimising project processes: The key goal of project management is to find new ways teams can achieve results efficiently and effectively.
- Communication: Effective project management stems from effective communication with team members and stakeholders. This helps to properly manage expectations, demands and input that can affect the project’s success.
Project management does not have an intrinsically strategic influence focused mainly on getting the expected results of the proposed strategy. Projects can be seen as the on-the-ground activities that produce products. To know more about how project management works, make sure to check out our guide to project management.
Similarities between Product and Project Management
So what are the key similarities between the two management approaches that has people confused?
Though they have inherently different focuses and objectives, a lot of the day to day tasks of project and product management are very similar. Activities such as resource allocation, milestone tracking, planning and scheduling, task assignment and collaboration are pretty much identical, though simply on different scales.
Where project management resource allocation works to achieve project completion within the pre-allocated resources to the specific project. On the other hand, product management resource allocation focuses not on getting the most products completed, but rather on prioritizing the right products that achieve the most strategic value.
Using strategic ‘scientific’ approaches
Don’t go imagining Einstein in a lab. This simply means that both project and product management focuses on achieving tasks in an evidence-based manner. Instead of just going off solely intuition and feeling, both product and project management flourish from a structured, well-informed and proven process. Basically, everything comes down to data and working off data.
Though there is no one-size-fits-all ‘scientific’ approach for either project and product management, many organisations base their activities on a foundational project management methodology. To understand more about project management methodologies, their benefits and how to pick the right one for you, check out our guide here.
Central focus on optimization
As we all know, time is money! As much as creativity abounds in resource-rich situations, both project and product managers are expected to be constantly introducing resource and time saving processes, systems and practices to optimise an organisation’s portfolio. If project or product managers aren’t focused on optimization, they can miss out on creating potentially ground-breaking technology or have roll-on effects onto other projects in the long-term.
To understand more about both the similarities and differences between project and product managers, click here.
5 Key Differences of Product Management vs Project Management
We may have alluded to some of the differences above but here are the top 5 differences between product management and project management.
1. Outcome focus: Customer focus vs Inward focus
In product management, the focus is on the customer – what do they want, what do they need and how can we give it to them within our current constraints. In the very competitive communications and technology market, simply improving your system without consideration of the ever-changing needs of your customers and market won’t give you that competitive edge. The heart behind product management is always how to deliver the most value to customers and the business.
On the other hand, project management is largely inwards focused on looking for solutions and systems to optimise resources, processes and practice within the scope of the project. It looks at how the team can better work within itself and with their key stakeholders, though those stakeholders are often limited to those within the organisation itself.
So while product management focuses on the ‘why’ of a product based on customer insight, project management focuses on the day to day ‘how’ of developing a product.
2. Work structure: Build up value vs Break down effort
As mentioned before, product management is all about building value and often involves a long-term commitment to small incremental experiments to discovering ong-going solutions that lead towards the intended product vision. The focus is upwards and potential-oriented.
Contrarily, project management and the defined nature of projects means that their core work approach is to break down a big plan into smaller actionable pieces. The focus is limited to the timeframe of the project itself and the completion of the project itself.
Due to their inherently different structures, product managers and project managers often apply different project management methodologies to suit their product, project and team. Typically, a product management team runs on iterative methodologies like Agile while project management teams are more likely to follow traditional methodologies like Waterfall. Make sure to read all about the Agile vs Waterfall debate so you can pick the right one for your team.
3. Performance Measure: Follow the value vs Follow the plan
We might sound like a broken record by now but if you haven’t got it – Product management is all about delivering value so its performance is measured based on value as well. But how do you measure value? The three common measures include evaluating the product’s feasibility, desirability and customer value. If the product can be completed, addresses customers needs and serves the organisation’s strategy – you’ve found the success sweetspot for product management.
Success in project management means getting the project to the finish line on time, on budget, and on scope. Project performance is solely measured in project-dependent metrics and typically benchmarked based on the originally set out plan. It may focus on things such as whether the project was delivered on time and future time-saving processes that can be introduced, budget overruns, and the ability for the deliverables to achieve intended project objectives.
4. Orientation: Organisation vs Team
Now this doesn’t mean that project management doesn’t look at organisation strategy at all. Product management as a strategic function has to orient itself towards the organisation’s needs, objectives and goals in order to achieve its key goal of increased strategic market value. Its performance is measured based on the ability to achieve that strategic value, not on the product itself. As a result, product management will focus more on which strategic objectives a product serves, how to evaluate the most value-generating products and how to allocate more resources to said products.
Project management focuses on the people, processes and practices within the team itself as the goal is to get this set of people to get the project to the set finish line. As a result, the focus will be much for team-based and project-centered ways to cut down communication boundaries, improve approval processes and streamlining reporting activities. Again it’s all about working with the team to get the project on time, on budget and on scope.
5. Reporting: Multi-directional communication vs Up the ladder
Long-term and value-adding products can impact organizations across all levels and thus the progress, delivery and impediments towards products are radiated in all directions from key internal stakeholders to customers and many more. The main purpose for this multilateral reporting structure is to unveil risks that are often hidden as reports progress up a ladder. In a competitive and fast-paced industry, organisations cannot afford to miss out on even the slightest opportunities for improvement.
In project management, reporting on status, cost and risks is often sent up through the management ladder. This means that each leader at every stage needs to interpret the information and choose how they want to report it to their seniors. Though this may be much more practical, it is often time-consuming and is not well-suited for ICT projects.
Project and Product Management Software
With all these differences from work structures to performance measures and reporting practices, this must mean they require softwares that can accommodate the unique needs of both project and product management activities.
Remember, even though software is meant to be methodology-agnostic, they often cater more towards a specific methodology and sadly not all software are the same. But just what software features do you need to look out for? Well lucky for you, we’ve made a whole guide to project and product management software so you can pick the best one to suit your team’s needs.
Pmo365 is your go-to PPM service
Whether you run projects or products, Waterfall or Agile, we are your go-to PPM service. Our PPM service is made to cater to your specific needs and requirements. From our intuitive software, all-round support services, our simplified pricing packages and our extensive PPM experience, we’re confident we can bring your organisation’s management activities to the next level. Make sure to book a free trial and speak directly with our PPM experts.