Appendix X4

Product
X4.1 INT RO D UC T IO N
There has been a gradual transition in project management concepts over the last decade.
Views such as defining success as meeting scope, schedule, and budget objectives have transitioned
to measuring value and the outcomes (not the outputs) of the project. Product management is
aligned with this value view and adds a longer time frame perspective. These concepts are shown
in Table X4-1.

Table X4-1. Views of Project and Product Management

Attribute Project View Product View

Focus Outcomes Outcomes
Typical metrics Value Business value
Staffing model Temporary teams Stable teams
Delivery emphasis “Deliver value” accountability “Inception to retirement” accountability

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 This appendix provides information about product development that raises tailoring
considerations for teams to consider. It describes how products and services continue to develop
and evolve through their use and over their lifetime. For purposes of this appendix, products,
product management, and product life cycle are defined as:

Product. A product is an artifact that is produced, is quantifiable, and can be either an end
item in itself or a component item.

Product management. Product management is the integration of people, data, processes,

and business systems to create, maintain, and evolve a product or service throughout its life cycle.

Product life cycle. A product life cycle is a series of phases that represents the evolution
of a product, from concept through delivery, growth, maturity, and to retirement.

Given these definitions, products extend beyond a project life cycle. They operate more like
long-running programs that focus on maximizing benefits realization. For example:
▶ The Apple iPhone® product has been through multiple versions with future updates on
someone’s drawing board.
▶ Once they are finished, buildings and homes require ongoing maintenance to keep them
functioning correctly and, at specific points, they may be refurbished or expanded for
different uses.

Continuous development has impacts on many factors including, but not limited to, funding
models, staffing models, development, and sustainment practices.

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X4.2 GL O BAL M ARK E T S HI F T S
Three global trends are disrupting traditional business models and transforming products and
services (see Figure X4-1).

Customer Centricity

Software-Enhanced Value Product Management

Ongoing Provision and Payment

Figure X4-1. Global Business Trends Influencing the Management of Products

▶ Customer centricity. Customer centricity inverts the traditional model of organizations

developing products and pushing them out to customers. Today, organizations are changing
to better understand, serve, and maintain customer loyalty (see Figure X4-2). Today’s
technology can capture a range of customer data and requirements that organizations
analyze and use for potential product enhancements, cross-selling opportunities, new
product ideas, etc.

Appendix X4 219
 Organization Serving Organization Revolving
Products Out to Customer Around the Customer
Customer Customer
Engagement Experience

Customer Customer
Loyalty Value

Customer Customer
Life Cycle Relationship

Figure X4-2. The Changing Relationship Between an Organization and Its Customers

▶ Software-enhanced value. Software and the capabilities it can provide have become
key differentiators in a range of products and services today. Thirty years ago, software
ran predominantly on dedicated computers. Ten years ago, software was embedded
in control systems for vehicles and homes as a result of enhanced wireless and satellite
communication systems. Now, even the most mundane appliances run software that
adds new capabilities and captures usage data.
Most organizations conduct at least some portion of their transactional business
electronically through websites and applications. Due to the ongoing need to upgrade
and maintain these systems, these services are only truly finished with development
when the product or service is retired.
▶ Ongoing provision and payment. Changes to established economic models are
transforming many organizations. Single-transaction services are being replaced with
continuous provision and payment. Examples include:

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 ▹ Publishing. Self-publishing, direct distribution, and electronic books that allow ongoing
refinement and development after publication.
▹ Finance. The shift away from local branches and toward microlending with funding
in smaller batches is based on evaluation of value delivered.
▹ Start-ups. With the increase in the gig economy and custom markets, there are more
start-ups and small businesses today than ever. Work is more distributed, fragmented,
and fluid than with traditional models.
▹ Media. A move away from buying DVDs and CDs from centralized outlets; instead,
a rise in subscription services with ongoing funding and delivery of benefits.

X4.3 IMPAC T O N P RO J E CT DE L I V E RY P R A C T I C E S
As markets shift from a single project delivery model to an ongoing delivery model, some
organizations are looking for alternatives to temporary project structures that deliver a single product,
change, or service. Instead, they are looking for delivery constructs that have a strong customer focus,
recognize the rapid evolution of technology, and align with the ongoing service and revenue streams
of loyal customers.

These factors have led to an increased interest in and shift toward product management
life cycles for value delivery. Product management takes a longer life cycle view that encompasses
support, sustainment, and ongoing evolution with the same team. Stable teams are especially valuable
in complex and unique domains, such as systems with embedded software where knowledge transfer
is time-consuming and costly. The shifting focus to product management is prompting some project-
oriented organizations to adapt their delivery models.

X4.4 ORGAN IZ AT IO N AL C O NS I DE R AT I O N S
FOR P RO D UC T M AN A G E M E N T
Organizations that are shifting to long-running, product-based environments can utilize
several strategies to align and coordinate product management. Three strategies include, but are
not limited to, the following (see also Figure X4-3):

Appendix X4 221
 Establish Stable Teams

Product Environment Use Incremental Funding

Program Management

Figure X4-3. Supporting Strategies for Continuous Value Delivery

▶ Establish stable teams. Instead of disbanding the team when initial development is
complete, use that team to sustain and evolve the product with the designated product
owner or person within the team reflecting the customer perspective. This removes the
need for knowledge transfer and reduces the risk of future enhancements being delayed
due to a loss of tacit knowledge.
Long-standing teams also develop better market awareness, customer insights, and
customer empathy than short-term teams. This helps with maintaining customer focus
and customer loyalty and builds competitive advantage. When people know they will be
responsible for maintaining and enhancing a product, they are less likely to take shortcuts
to get something ready for release. As a result, quality, maintainability, and extensibility are
often improved with long-serving teams rather than with teams that develop then handover
products. These factors, in turn, contribute to creating value and sustaining value delivery.

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 Partners or contractors who develop initial products for deployment on a customer
site incorporate effective change management to ensure customers have the capabilities
to maintain the product once it is transitioned. Part of transition planning can include
discussions on building a team within the receiving organization that can support and
evolve the product over its life cycle.
▶ Use incremental guidance and funding. Instead of predefined project durations or
annual budgets, consider more frequent reviews (such as quarterly) and funding for the
next quarter. With more frequent evaluations and funding, the business is in closer control
of overall progress, direction, and decision making.
Similar to venture capital funding, regular reviews of delivered value allow direct funding
toward products that are providing expected value and reduce or curtail investment in
underperforming initiatives. Such funding models enable organizations to pursue new
market opportunities and capitalize on successful endeavors while limiting exposure
to the inevitable percentage of new initiatives that fail.
▶ Utilize program management structures. Practitioners operating with stable teams
that support customer-centric products can apply program management constructs for
managing long-running initiatives. Programs align well with adjusting to market changes
and focusing on customer benefits. They are also typically much longer running than
a single project.
The Standard for Program Management addresses ongoing priority changes as follows:
“The primary difference between projects and programs is based on the recognition within
programs that the strategies for delivering benefits may need to be optimized adaptively as
the outcomes of components are individually realized. The best mechanisms for delivering
a program’s benefits may initially be ambiguous or uncertain.”
This acceptance of up-front uncertainty, need for adaptation, focus on benefits, and
longer time frames may make programs a better fit than projects for many organizations
managing product delivery.

Appendix X4 223
 Many traditional product industries, such as infrastructure, aerospace, and automotive,
use program management guides and frameworks. These industries utilize programs
for directional alignment and integration of component activities, such as programs,
subprograms, and project activities. For example, an organization with a technology
platform can use program and product management to prioritize and oversee capabilities
that will maximize the platform’s return on investment over its lifetime. A stable, continuous
development team can work on customer-focused, value-adding features and functions.
Project teams then deliver equipment upgrades and interfaces with new or enhanced
systems. Operational teams can troubleshoot user interface issues and help customers
adapt to new features. When program structures already exist in organizations, shifting to
those structures for product management does not require reorienting everyone to a new
way of thinking or working.

Table X4-2. Unique Characteristics of Projects, Programs, and Products

Characteristic Project Program Product

Duration Short term, temporary Longer term Long term
Scope Projects have defined Programs produce aggregate Products are customer
objectives. Scope is progres- benefits delivered through focused and benefits driven.
sively elaborated throughout multiple components.
the life cycle.
Change Project teams expect changes Program teams explore Product teams explore
and implement processes to changes and adapt to optimize changes to optimize the
address the changes, as the delivery of benefits. delivery of benefits.
needed.
Success Success is measured by Success is measured by the Success is measured by the
product and project quality, realization of intended benefits ability to deliver intended
time lines, budget, customer and the efficiency and benefits and ongoing viability
satisfaction, and achievement effectiveness of delivering for continued funding.
of intended outcomes. those benefits.
Funding Funding is largely determined Funding is up front and Product teams engage in
up front based on ROI ongoing. Funding is updated continuous development via
projections and initial with results showing how funding, development blocks,
estimates. Funding is updated benefits are being delivered. and reviews of value delivery.
based on actual performance
and change requests.

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 Organizations taking an integrated view of project and product management can benefit
from examining program management frameworks as a stepping stone. Programs are much better
aligned with product thinking through their acceptance of up-front uncertainty, need for adaptation,
focus on benefits, and longer time frames.

X4.5 SU M M ARY
Global markets, increased diversification, and the addition of software to more products are
resulting in extended support, sustainment, and time frames for realization of value. Customer-centric
and digitally focused organizations are finding advantages in forming stable teams for the lifetime
support and growth of these new classes of products.

Product life cycles may appear at odds with traditional project delivery constructs such as
the temporary nature of projects. However, they have many overlaps with the evolution of project
thinking that includes focusing on customer value.

Organizations in such environments can find alignment and additional resources in creating
long-running stable teams, staged funding, and program management constructs.

X4.6 SU GGE S T E D RE S O UR C E S
Kelly, A. 2018. Continuous Digital: An Agile Alternative to Projects for Digital Business. Columbus, OH:
Allan Kelly Associates.

Leybourn, E. and Hastie, S. 2019. #noprojects: A Culture of Continuous Value. Toronto, Ontario,
Canada: C4Media.

Kersten, M. 2018. Project to Product: How to Survive and Thrive in the Age of Digital Disruption with the
Flow Framework. Portland, OR: IT Revolution Press.

Project Management Institute. 2017. The Standard for Program Management – Fourth Edition.
Newtown Square, PA: Author.

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