In an earlier post, I discussed the differences between and relationships among Project, Program and Portfolio management – this continues to be a popular post.  Today I’d like to explore the differences between IT Product Management and IT Service Management as they pertain to IT and to business-IT maturity.  This thread is inspired in part by my colleague Roy Youngman’s post on Program Management and SOA and also addressed an issue that comes up from time-to-time in my client conversations.

Product management is best thought of as a marketing discipline.  Some people consider Proctor & Gamble as pioneers with this discipline.  Product Managers own the responsibility for managing the lifetime value (costs and revenues) of a given product or product line.  They try to gain a deep understanding of the market for their product, and of how customers use that product.  They make decisions on when to upgrade a product, what should be in the upgrade, and so on.  They work closely with engineers, product specialists and developers, but are the ultimate arbiters of how a product evolves over time.

In the world of the IT organization, it is important to distinguish between product and service.  In his excellent book, “The Invisible Touch: The Four Keys to Modern Marketing” author Harry Beckwith argues that:

  • Products are made; services are delivered.  Products are used; services are experienced.
  • Products possess physical characteristics we can evaluate before we buy; services do not even exist before we buy them.
  • Products are impersonal; services are personal.  A service relationship touches our essence and reveals the people involved: provider and customer.

With this distinction, I think it becomes clear that most IT organizations deliver services rather than products – often procuring products from the marketplace (e.g., hardware, software packages) then wrapping them in services (support, installation, configuration, etc.) that are delivered and experienced by customers/clients.  This distinction is not moot.  It explains why frameworks such as ITIL talk to service management at length, but are silent on product management.   Many of the concepts in ITIL are drawn from leading product management practice, but are oriented towards services.

This also highlights the importance of the experience that IT customers feel when they interact with IT services – for a thorough treatment of this topic, check my colleague Frank Capek’s blog Customer Innovations.   As Business-IT Maturity increases, the overall customer experience with IT services improves, and improving this customer experience is an important aspect of driving up maturity.

However, some IT organizations also deliver pure products to end customers, and in those cases they need to also understand product management.  In some cases, the IT products are embedded in, or have embedded in them the products or services of the business.  For example, a medical devices manufacturer might embed analysis tools in a line of diagnostic machines.  It is likely that the business will have a Product Management function, and IT must work closely with them.  In other cases, IT will own the Product Management role, and must become masters of leading product management practice.