Product versus project management

If you are not too involved in product or project management, the difference between the two can be unclear. We would like to show you the differences and what characterizes each product and project management so that you know what to implement and consider when.

What is product management?

Product management comprises a multitude of tasks and is performed by a team to cover all skills and fields of knowledge. The objective of product management is to maximize business results (for most companies sales and profitability) by managing a single product or product portfolio. This includes optimizing the financial performance of the product portfolio, launching new products, deciding on which products to discontinue, improving existing products. Thereby, the whole process is centered around the customer insight in order to fulfill the customer’s needs and to stay ahead of competition. To get a bit more precise, product management tasks include market research, customer insight generation, product development, profitability calculation, product testing, marketing and more.

The product manager has the responsibility to deliver the defined business results. To do so, they is managing the product lifecycle from introduction to decline whilst monitoring it through all stages. As the product manager does not have all necessary skills and resources, they leads a team that helps to execute all tasks necessary and support in decision-making. Part of this team can be all involved internal departments (e.g. R&D, sales, finance, logistics etc.) and also external partners (e.g. agencies).

What is project management?

Project

According to the PM2 Alliance, “a project is a temporary organizational structure set up to create a unique product or service (output) within certain constraints such as time, cost and quality.” (you can download the PM2 framework here). Thereby, a project is not a routine operation and thus needs a team of people who usually do not work together to gather the required skill set. The team can be cross-functional, across locations or involving external parties.

Project management

Project management is the process of steering a project through its lifecycle to complete it as per the project requirements. The project lifecycle usually involves capturing the problem or insight, then planning the solution to the problem, initiating the project and executing, monitoring and closing of said plan. When managing the project lifecycle, resources, budget and time frame need to be considered.

After having defined product and project management, you can see that they share some similarities:

• Both require a cross-functional team.
• Both have a clearly defined deliverable.
• Both product and project have a lifecycle they go through.

But they also show differences:

• Objectives: project management delivers a completed outcome (e.g. product or service), whereas product management maximizes business results.
• Time horizon: defined for a project while product management is ongoing.
• Given constraints for a project from the start whereas product management’s constraints are defined by the ongoing product performance and business result.
• In product management the customer is center of attention while in project management the stakeholders define the project.

Overall, project management is used to produce defined outcomes or a solution to a problem within a defined time and budget. Once delivered, the project is completed. Product management is a much broader approach with a focus on the customer and to permanently deliver business results. Project management can be used e.g. to manage a part of a product’s lifecycle, a new product development for example.

We hope we were able to guide you a bit more in project management. Try OpenProject 14 days for free to see how it can support to manage your project lifecycle.