Product VS project: differences in approaches

Online Factory5 is a Russian developer of analytical solutions for business based on smart data processing algorithms. We in the company have experience of bringing together two different teams, and we would like to share it. On the one hand, we are developing our product, which is actively distributed through the partner network. And there is a team that deals with this – the grocery one. On the other hand, we are doing commercial development. And for this, there is also a team – a project team.

And here and there developers, testers, devops, analysts, managers. They exchange knowledge, imbue each other with ideas. The product team can transfer the project to the project team for testing technological and product hypotheses, and the project team can add the project result as a technology into the product. Both things happen quite legally, but people from one team to another never move. Since there is a big difference between them. It lies in work processes, structure, goal-setting, and even the profile of new candidates. It can be difficult to explain to those who are not immersed, but we will try to disassemble everything.

Product and project – the main differences

Let’s start with the basics of product and design development. Below is a comparison table that will help you identify important components of the approaches, for example, time intervals, sets of operations, team, and more.

Let’s look at some examples:

Factory5 big data analytics platformcreated to improve business performance through analytics and data management is a product. And the creation of an algorithm for optimizing a production program, operating on this platform, for a specific client is a project.

Solution for monitoring operation and predicting the technical condition of equipment Is a product, and it is a project to implement a tool for calculating the residual resource of a gas turbine unit for a specific client.

We went through the basics, and now let’s try to dive into it in more detail. Let’s consider how the process is built and the team works, who is responsible for what.

Control object

In the project business, the objects of management are clients’ projects that are going on in a certain rhythm. Sooner or later, each of them ends, and the result of the project goes to support, or is transferred to the next project for development.

The task of the manager is to ensure the maximum, ideally, of course, one hundred percent utilization of resources. Project team members are unevenly involved and not always 100% of their time. An employee can participate in several projects at once – this is an opportunity to use resources efficiently. There are many nuances and risks here, this must be approached correctly. We are sure this topic is worthy of a separate article.

Product creation is an infinite process… The object of management is the metrics of the success and quality of the product. The team also works rhythmically, but these rhythms add up to cycles of continuous product improvement. Schematically, the classic product management process looks like this:

For ourselves, we have defined a rigid rule: between design and product development, you need to build a reinforced concrete wall, otherwise urgent projects are guaranteed to shift all product tasks without a set deadline “for later”. Not a single project has ever gone according to plan, or rather went according to plan, but only in a different way.

At some point, the project manager, whose deadlines are on fire, will definitely approach the product development manager with the words: “Save me, I need people” or, even more difficult: “I have a contract for many millions, let’s do it.”

Efficiency – what we focus on

KPI of the project:

  • meet the deadline

  • do not exceed the planned cost,

  • fulfill the customer’s requirements.

Product KPI:

  • marginality, through monetization and promotion,

  • value proposition,

  • prospects for further development and replication.

Requirements – how to manage them

The project team is awaiting instructions from the customer, yes it happens that the project team can offer some solutions, but the final decision is always up to the customer. In any project at the start, we get the goal and requirements for the final result, and often the customer also dictates the methods and tools for implementation.

BUT The main task of the product team is to discover the problem and user needs through market monitoring, research, interviews with users, and so on. This is the main difference between a product and a project. Every day, the team generates hypotheses for the development of its product and tests them in terms of the impact of changes in the product or methods of its promotion on its scaling to the market. For this, many different methods are used: competitive analysis, market analytics, customer development, etc.

As an example, a team hypothesizes that customers in a product need a certain type of diagram. Next, the team forms a list of clients of interest to us, material for presentation – diagrams, layouts, descriptions – plans the structure of the interview, determines the indicators that will confirm or refute their hypothesis and negotiates meetings with clients. Based on the interviews and analysis of how much additional revenue we can attract, a decision is made to implement this functionality in the product.

Structure of work – how we work

The implementation of the project is divided into small tasks and they are most often performed sequentially.… In general, when we talk about projects for a client, this is a list of specific tasks, terms and methods of implementation, about which we agree in advance with the customer. We can do something in parallel and even use the sprint methodology, but work is usually completed according to a schedule with tight deadlines and costs.

The main principle of product work is testing product hypotheses, iterative development and constant revision of priorities.… The product backlog is as long as the moon and back, and the manager’s task is not only to generate and test ideas, but also to constantly evaluate which of the backlog tasks are of higher priority at the moment. And then form a strategy for the release of the new functionality.

Before the task gets into the backlog, we try by hook or by crook to check it before development begins. Both just research and ux-testing are used, and sometimes you have to assemble a prototype from design mockups. Only after receiving feedback from a sufficient number of customers, the hypothesis is validated and taken into development.

Thus, at the same time in the product there may be several hypotheses in development at different stages. The task is also transferred to the development, which has been additionally processed. First, we highlight MVP, which is a minimum viable product that is tested on a number of clients. If shown schematically, then working with the product looks like this:

At the moment, many projects use the MVP concept as part of the implementation of each functionality. And it helps to avoid unnecessary development costs for unnecessary or ineffective features, thereby reducing project costs and increasing customer satisfaction.

Responsibility – who is responsible for what

In the project, the client takes responsibility for choosing a goal… The task of contractors in this case is to be professional, fast and systematic in achieving this goal. It is possible that the project team and the client can become partners who agree on common goals and ways to achieve them, but the final choice is always up to the customer.

In creating a product, the team is responsible for the constant selection and verification of the goal.… Among the conflicting requirements and expectations of numerous consumers, it is important to identify those that will allow the product to scale as much as possible. Clients in this case do not share responsibility for the result with you. The product team is responsible for ROI and scalability, development priorities, service, promotion, and the choice between quick money and long-term development.

Features of work in the product and project

Let’s compare how the work in the product and the project differs for the team. Let us take as characteristics the time intervals for work, the format of work – constant, parallel, variable – the time to achieve the result, and more.

Project is not equal to product

It is believed that the result of a project is a product. It is not true.

If this happens, it is very rare how to meet a real unicorn in Gorky Park. And that’s why:

  1. The project is focused on one client and his specific requirements.

  2. A project very rarely takes into account the reliability and safety requirements required to go to market.

  3. Software does not become a product until it acquires the artifacts necessary to bring it to market:

    • promotion plans,

    • documentation,

    • sales materials,

    • customized support service, etc.

To package software into a product, even if you are lucky and the result of the project is a universal functionality, in any case you need investments and restructuring of all company processes for the continuous development of the product. After the project, most likely, there may be a technology that still needs customers and added value.

Let’s summarize

In project work, you will find fast results, drive from tough deadlines, multitasking, adherence to client requirements and limitations in liability.

In product development, time is devoted to the generation of ideas, here there is involvement in something big and significant, a lot of work in the uncertainty and conditions of a changing market and responsibility for their decisions.

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