Archive for September, 2008

Can you outsource product management?

Monday, September 29th, 2008

Does that make sense? Alyssa Dyer took on this question in an article I came across while cleaning up. I saved it because I agreed. It depends. It can be a good thing in the right circumstances and with the right division of labor.

NOT TO OUTSOURCE
When you need a partisan. Some things you don’t want handled by an outsider — for instance, representing your company at conferences or in sales situations.

BETTER OUTSOURCED
When you need a mercenary. There are tasks that an outsider may do better. Alyssa cites gathering requirements and prioritizing them. I would sharpen that to include the front-end market research like voice of the customer (VOC) activities.

The key is that you need to hire someone experienced. They will likely be more skilled at asking the necessary “why” questions and they are less likely to hold the biases about your customers that pervade your organization and industry.

WHO TO OUTSOURCE TO
She cautions against hiring a telemarketing company because they are typically about asking “what” questions. I would expand this to include many of the traditional market research companies that might hold focus groups and ask “what” people want, “what” they prefer. Gerald Zaltman tears the market research community a new one in the first part of his book about “how customers think” for exactly this reason. Also, because those kind of methods influence the answers you get. They are right for refining your solution but wrong when defining the product and requirements.

Experience also helps you know when you’ve gotten enough information. I recommend Abbie Griffin’s paper listed on our Resources page for more about when your sample is enough.

WE WILL DO
Obviously it’s an interesting topic to me since clients outsource key product development and product management services to Breakthrough NPD. The things we excel at and do that are on her list include:
# Customer research
# Gathering requirements
# Prioritizing requirements
# Competitive analysis
# Positioning and message validation
# Website review and alignment
# In-depth quality checks with customers
# Setting up and running a customer feedback council

In fact, anything that is best served by a neutral 3rd party, like calling customers or reporting up to management, is a good candidate for using an external party. Outsiders have less to lose by giving management the facts especially when they aren’t pretty.

WE MIGHT DO
We do some product management functions that are good for outsourcing if we have the right experience but are likely to engage a partner or provide a referral instead. For example,
o Sales tool development and review
o Evaluating and conducting a release debriefing (lessons learned)

NOT FOR US
And there are the product management functions she lists that we generally don’t do but we might be able to make a referral.
— Win/loss reporting (it is good to keep sales dept. bias out)
— Pricing
— Planning and managing product launches

WHEN TO OUTSOURCE
So when is this good for your organization? Bringing in help to take on some of these product management functions makes sense at these times:

1. As a stopgap until you can fill the job internally or with a new hire. (Keeping the product moving, cutting down schedule risk, keeping work from piling up).

2. Helping deal with the backlog of PM tasks that built up while searching for your new PM.

3. Bringing in experience to raise the level of your internal PMs.

4.Breaking outside the box created by internal biases. (To make big innovation steps.)

IN A TIGHT ECONOMY
With the economy tightening I think a lot of companies will cut back on new development. Outsiders can help with specific tasks or projects to help you survive with a smaller staff during a lean period. They can also help you manage risks. That’s more important when you have less margin of safety. Furthermore, smart companies know that the lean time is a good time to prepare new products because by the time they are ready the economy will have turned around and you’ll have something new to capitalize on the upswing while your competitors get left behind.

References:
“Is it possible to outsource your product management?” Alyssa Dwyer, Mass High Tech, Feb. 9-15, 2007, p12.

The Voice of the Customer, Abbie Griffin and John Hauser
(scroll to the end of list)

How Customers Think, Gerald Zaltman