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Software Product Management

Article in IEEE Software · May 2014

DOI: 10.1109/MS.2014.72

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Accepted and published paper. Cite as:
Ebert, C.: “Software Product Management”. IEEE Software, ISSN: 0740-7459, vol. 31, no. 3, pp.
21-24, May 2014.
[Link]
_____________________________________________________________________________

Software Product Management

Author:
Christof Ebert, Vector, Stuttgart, Germany

Version:
V2, 28. Feb. 2014

Contact information:
Dr. Christof Ebert
Vector Consulting Services GmbH
Ingersheimer Straße 24
D-70499 Stuttgart
Germany
Phone: +49-711-80670-1525
Fax: +49 711 80670-444
E-Mail: [Link]@[Link]

Abstract: The success of a product or solution depends on effective product management. This
article provides a brief overview on software product management and our experiences with
introducing, improving and deploying the role of a product manager in industry. We found that with
increasing institutionalization of a consistent and empowered product management role, the
success rate of projects in terms of schedule predictability, quality and project duration improves.
Based on empirical evidence we provide concrete practices that will boost software product
management in your company and thus the success rate of products in terms of predictability,
quality and efficiency.
Keywords: Software product management, economics, industry benchmark, product
management, product, service, product life-cycle management

Author CV
Dr. Christof Ebert is managing director at Vector Consulting Services. He
supports clients around the world to sustainably improve product strategy and
product development and to manage organizational changes. He serves on
advisory and industry bodies and lectures at the University of Stuttgart.
Further information about him can be found at Linked-In:
[Link]/in/christofebert . Contact him at [Link]@[Link] .
 2

Software Product Management

Christof Ebert, Vector Consulting Services, Stuttgart, Germany1

Abstract: The success of a product or solution depends on effective product management. This
article provides a brief overview on software product management and our experiences with
introducing, improving and deploying the role of a product manager in industry. We found that with
increasing institutionalization of a consistent and empowered product management role, the
success rate of projects in terms of schedule predictability, quality and project duration improves.
Based on empirical evidence we provide concrete practices that will boost software product
management in your company and thus the success rate of products in terms of predictability,
quality and efficiency.
Keywords: Software product management, economics, industry benchmark, product
management, product, service, product life-cycle management

The Need for Product Management

No matter what business you are in, you are also in the software business. From the rather tangible
IT systems in finance and industry to the many applications we are using on an almost daily basis
to ubiquitous computers in smart phones, automotive and consumer electronics, software provides
features and functions in daily use. Increasingly, the entire system functionality is implemented in
software. Where we used to split Hardware from Software, we see flexible boundaries entirely
driven by business cases to determine what we best package at which level in which component,
be it software or silicon.
Software business though a gigantic money generator is also rather fragile and unpredictable for
individual companies. Today’s heroes can easily disappear tomorrow, as we constantly observe.
Social networks that were prominent a year ago fade as soon as users realize that there is
something better. Entry barriers are small in the IT and App world, where a huge business can
arise within months from what used to be a garage and now is a dorm room.
When looking in the rear mirror we see many companies and endeavors which failed due to
overemphasizing technology and not sufficiently implementing a sound business strategy [1,2,3].
Take Netscape. For many of us it was the first experience of the Internet. In 1995 it had a market
share of 80% - more than enough to stay in the pole position forever, as companies such as
Google or Amazon show. But already in 1997 it slowed down, lost market share, and in 2003 went
into bankruptcy. What went wrong? One of the managers put it in simple words: “We had no
product management; it was just a collection of features” [2]. More recently and in another domain,
a previous Nokia senior manager claimed that the lack of product management is the primary
reason for their loss of market shares in the past years [2]. On the other hand, we all admire
companies such as Apple or Google for their excelling product management.
Often we focus too much on technology, and not enough on value. Features are lined up like a
washing list. Yet only half of the originally allocated requirements appear in the final product
release [1]. This is primarily the consequence of not having one clear corporate owner with
assigned accountability for its success. Sales and marketing are disconnected from strategy and
product development. Not only is software increasing in complexity, it is increasing in enterprise
risk. Poor product management causes insufficient project planning, continuous changes in the
requirements and project scope, configuration problems, and defects.

1
Some portions and pictures of the text have first been published in the book: Ebert, C.: Global Software and
IT. IEEE Wiley, 2012. Used with permission.
 3

Software Product Management

Successful product development means to deliver the right products at the right time for the right
markets. Naturally the success of a product depends on many factors and stakeholders. However,
we realize that it makes a big difference whether many cooks somewhat steer the soup, or whether
one person is empowered to lead all activities for the product from inception to market and
evolution – and hold accountable for the results. This is the product manager.
Product management is the discipline and business process which governs a product from its
inception to the market or customer delivery and service in order to generate biggest possible value
to the business. The successful product manager not only masters the life-cycle processes, he is
the owner. He must get as early as possible and way before project start a good systems
perspective to judge on value proposition and priorities. He has to balance projects, people and
politics. His primary tools are roadmaps, requirements, milestone reviews and the business case.
Often the roles of product manager, project manager and marketing manager are confused. Fig. 1
shows these three key roles and their responsibilities. One might argue that in a concrete
organization, one or several of these roles are laid out differently and might simply be coordinating
directions that they receive from their management. While this is certainly true as an observation,
we should note that such organizations often face interface and responsibility battles and have a
lack of ownership for results. These three roles are necessary and need to empowered – and hold
accountable for results. This not only stimulates motivation but also facilitates faster and more
effective decision-making in a company.
We continuously work with companies worldwide to improve their product management. A recent
benchmark [2] shows that 53% of the companies have the vision that the product manager is the
end-to-end responsible for the success of the product. In reality however, only 33% are actively
implementing this vision. This means that about half share the concept of a strong product
manager. For the other half, product managers are mostly subordinate to marketing and play an
administrative role, such as maintaining technical roadmaps.

Product Product Project

Management Marketing Management
• Asks what to make • Asks how to best sell it • Asks how to best
and how to make it execute a project or
• Ensures it will make contract
• Ensures it will make market and customer
business sense business sense • Ensures project is
executed as defined
• Understands how it fits • Understands the
customer needs as a market architecture • Agrees technical
solution and influencing factors details, mitigates risks
and resolves conflicts
• Defines roadmap (be- • Understands the
yond a single release). customer need • Business and
Determines what to customer responsibility
innovate or kill. • Communicates for a commercial
content, functionality project
• Responsible for all as a value proposition
aspects (value chain) • Selects processes to
of a product or solution • Drives the project plan best fit the business
following the life-cycle for sales and model
marketing
• Leads teams with • Leads various
various functions • Closely cooperates technical, supplier, and
during the life-cycle with sales to assure service teams to
adoption achieve a shared goal

Results champion, Market Implementation

embedded CEO champion champion

Fig. 1: Clarifying the roles

 4

Growing Your Product Management Competence

Most product managers in software and IT advance from a technical career and grow into this
discipline, lacking any form of formal education. There is no typical career path both into and inside
product management. In Europe and Asia product managers mostly evolve from the technical role,
such as technical project manager. However these product managers are not really pursuing a
product management role as we defined it in the introduction. As a senior manager with whom we
worked pointed out: “We had many so-called product managers which were just promoted from a
technical role without a clue on the business needs and skills they should have.” In consequence
they are not content with the role and rather often in our interviews blame “politics” for not
achieving their missions. These product managers do not master their role.
Only 27% of the companies practice a systematic competence management and training program
[2]. Training correlates high with product management success across the interviewed companies.
External certification is not much used, as opposed to project managers. The reason is that often
the product management role is very much tailored to the company specific needs and constraints.
Several senior managers with whom we talked perceive that “there is currently a flood of
certification programs which in the end only fill up CVs of people applying for other positions”.
Rather than formal certification, product management competences must be aligned with what
provides value to the business. The software product management framework fulfils this demand in
providing a framework and individual training modules. It was shaped by working with hundreds of
product managers world-wide in different industries [3,4].
Often we are asked by product managers, what they can do themselves to deliver better results.
Here is our top-ten list to personally grow as a product manager:
1. Behave like an “embedded CEO”
2. Drive your strategy and portfolio from market and customer value
3. Be enthusiastic on your own product
4. Have a profound understanding of your markets, customers and portfolio
5. Measure your contribution on sales (top-line) and profits (bottom-line)
6. Periodically check assumptions such as business cases
7. Take risks, and manage them
8. Foster teamwork based on lean processes
9. Insist on discipline and keeping commitments
10. Be professional in communication, appearance, behaviors …
These ten best practices are applicable for each individual product manager. Having looked to
hundreds of industry projects from domains such as small software applications and services,
embedded systems to large IT systems, we strongly suggest applying these practices to improve
personal performance – and thus business results. They depend on each other, so it is of not much
value to select only few and disregard the rest. Start using them and you will face better results –
and more recognition.

The Business Value

Does better software product management mean better business performance? We performed root
cause analyses of hundreds of products that underperformed and found similar causes
reappearing. Root causes included business cases that were never re-evaluated, unbalanced
portfolios that strangulate new products, insufficient management of new releases and service
efforts, and the lack of vision that caused requirements to continuously change.
 5

In working with hundreds of product managers we achieved efficiency and cost gains of up to 20%
per year [2]. Explanatory factors for this positive impact of product management include leadership
and teamwork, managing risks and uncertainty, mastering stakeholder needs, and accountability
towards agreed business objectives and accountability – managed by one empowered person
across the product life-cycle. In the words of a senior executive of one of the organizations with
whom we had been working on competence evolution over the past years: “Product management
has a pivotal role for us. They are the glue that brings together operations, marketing and
engineering. We have seen the benefits of product management in terms of reduced delays and
faster product acceptance in the market. The benefits of investing in our product managers training
has far outweighed the cost.”
From our survey [2] and in working with many companies worldwide, we found four success factors
that will help advancing product management:
1. Core team to have reliable commitments from all functions
2. Standardized product life-cycle to have clear interfaces, milestones and governance
3. Requirements that transport the customer value to ensure business focus
4. Portfolio management and roadmapping to facilitate transparency and dependency management
These four success factors had been most often named by the interviewees as what facilitates
success as product managers. We will briefly explain these four topics. In the following section we
will then show a case study where we have been introducing product management while
considering these four success factors. We do not claim that this set is comprehensive; however
underline the emphasis they received as top four from a longer list.
1) Often different stakeholders have unaligned agendas which make the project late and cause lots
of overheads and rework. The first success factor therefore is to formally create a core team with
the product, marketing, project and operations managers for each product (release) and make it
fully accountable for the success of a product. Decisions are taken and implemented by the
respective function, such as deciding requirements priorities, test strategy, increment planning,
backlog, etc. This core team is operational throughout the product life-cycle. The success factor is
to give this core team a clear mandate to “own” the project.
2) A standardized product life-cycle must be mandatory for all product releases, i.e., all engineering
projects. Too often, requirements changes are agreed in sales meetings without checking
feasibility. Technical decisions are made without considering business case and downstream
impacts. The product life-cycle should guide with clear criteria, i.e., determining what is good
enough or stable enough. This implies that it is sufficiently flexible to handle different types of
projects and constraints. To reduce formal overheads we recommend using online workflow
support to instrument such product life-cycle.
3) A product or solution must address a need and must have a strong business vision.
Requirements are a contract mechanism for the project internally and often for a client externally.
They must be documented in a structured and disciplined way, allowing both technical as well as
market and business judgment. Ask a tester to write a test case before processing the requirement.
Ask the marketer in the team to check whether he can sell the feature as described. After
evaluation they are approved by the core team.
4) For each product the product manager drafts a high level roadmap document with the product
strategy and the functional and technical features planned in releases for the coming years.
Managing and maintaining roadmaps and the own portfolio as a mix of resources, projects and
services must be the focus of each product manager. When it comes to his own portfolio, the
product manager has to show leadership and ensure dependable plans and decisions that are
effectively executed. Apply adequate risk management techniques to make your portfolio and
commitments dependable. If there is a change to committed milestones or contents within your
portfolio, they must be approved first by the core team and where necessary by respective
business unit management, and then documented and communicated with rationales.
With the success of companies such as Apple and Google based on their excelling product
management, software product management has recently gained wide-spread attention. It is a key
business role in the entire company – empowered to act as a business owner. It provides the basis
 6

for success or failure in a product development. Real progress is what creates a lasting user
experience, and this is defined from a product perspective – and not ad-hoc during project work in
a shouting contest.

References

1 Ebert, C.: Global Software and IT: A Guide to Distributed Development, Projects, and Outsourcing. Wiley, USA,
2011.
2 Ebert, C. and S. Brinkkemper: Software Product Management - An Industry Evaluation. Journal of Systems and
Software, 2014
3 Sixth International Workshop on Software Product Management (IWSPM). 19. Mrc. 2012. Details: [Link]
4 SPMBOK: Software Product Management Body of Knowledge. See at: [Link] Last accessed on
01. Feb. 2014.

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