IT Service Management vs. IT Product Management


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In an earlier post, I discussed the differences between and relationships among Project, Program and Portfolio management – this continues to be a popular post.  Today I’d like to explore the differences between IT Product Management and IT Service Management as they pertain to IT and to business-IT maturity.  This thread is inspired in part by my colleague Roy Youngman’s post on Program Management and SOA and also addressed an issue that comes up from time-to-time in my client conversations.

Product management is best thought of as a marketing discipline.  Some people consider Proctor & Gamble as pioneers with this discipline.  Product Managers own the responsibility for managing the lifetime value (costs and revenues) of a given product or product line.  They try to gain a deep understanding of the market for their product, and of how customers use that product.  They make decisions on when to upgrade a product, what should be in the upgrade, and so on.  They work closely with engineers, product specialists and developers, but are the ultimate arbiters of how a product evolves over time.

In the world of the IT organization, it is important to distinguish between product and service.  In his excellent book, “The Invisible Touch: The Four Keys to Modern Marketing” author Harry Beckwith argues that:

  • Products are made; services are delivered.  Products are used; services are experienced.
  • Products possess physical characteristics we can evaluate before we buy; services do not even exist before we buy them.
  • Products are impersonal; services are personal.  A service relationship touches our essence and reveals the people involved: provider and customer.

With this distinction, I think it becomes clear that most IT organizations deliver services rather than products – often procuring products from the marketplace (e.g., hardware, software packages) then wrapping them in services (support, installation, configuration, etc.) that are delivered and experienced by customers/clients.  This distinction is not moot.  It explains why frameworks such as ITIL talk to service management at length, but are silent on product management.   Many of the concepts in ITIL are drawn from leading product management practice, but are oriented towards services.

This also highlights the importance of the experience that IT customers feel when they interact with IT services – for a thorough treatment of this topic, check my colleague Frank Capek’s blog Customer Innovations.   As Business-IT Maturity increases, the overall customer experience with IT services improves, and improving this customer experience is an important aspect of driving up maturity.

However, some IT organizations also deliver pure products to end customers, and in those cases they need to also understand product management.  In some cases, the IT products are embedded in, or have embedded in them the products or services of the business.  For example, a medical devices manufacturer might embed analysis tools in a line of diagnostic machines.  It is likely that the business will have a Product Management function, and IT must work closely with them.  In other cases, IT will own the Product Management role, and must become masters of leading product management practice.

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6 thoughts on “IT Service Management vs. IT Product Management

  1. IT and Network Service Providers have been performing the task of delivering value added IT and Network services to the enterprise for years. They have done by aligning themselves around the following organization model.

    1. Service Strategy (Product Management) team
    2. Service Design Team
    3. Service Transition (Implementation) Team
    4. Service Operation Team

    Without knowing it they were operating in what is now know as the ITIL V3 Service Lifecycle. I’ve recently written an article (http://www.itsmsolutions.com/newsletters/DITYvol4iss01.htm) classifying the five domains of the ITIL V3 Service Lifecycle as the five new silos of IT.
    5. Service Improvement Team. In the article I state how IT Product Management is one of the key roles supported under the Service Strategy domain.

    IT organizations are becoming Managed Service Providers and should think about organizing themselves around a model that has worked so succesfully for others in the past.

    Reply
  2. Rich, this is helpful – thanks. However, I must push back on one important point. You say, “IT organizations are becoming Managed Service Providers.” I agree, but if that is all they aspire to or achieve, they will be stuck in what I call “Level 2″ hell (see my earlier posts on our 3-Level Business-IT Maturity Model). As a maturity model, Level 2 is a critical stepping stone to Level 3, but it typically fails to stimulate, identify and deliver against the real business value opportnities. I will pick this up in tomorrows post.

    Reply
  3. Pingback: ITIL: Necessary, but not sufficient! « IT Organization Circa 2017

  4. Once again I think you are spot on…but like any construction project IT must have a solid foundation to operate from before they can move forward with initiatives that will drive the enterprise to the next level.

    Reply
  5. We’re in complete agreement! Please look in on my post tomorrow – I’m taking this thread further, and appreciate your input!

    Reply

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