Ask A Good Product Manager

Your product management questions answered

How can I manage a licensed product?

Posted on April 2, 2008 · 1 Comment

Question: How can I manage a product which my company licenses and does not build?

I’m a new Product Manager for a company, my product is a packaged software application and/or Services, but the application which I manage is being licensed from another company. Basically my company is acting as a broker; but my company has sold the application to another company, so the other company pays us and we pay the application owners.

The company that develops the product will not have direct access to the client, the client talks to me and I talk to them. If there’s any changes that needs to be done on the application, I will be informed by the client and then I will talk to the company that built the application. My concern is that, the developer do not work for my company, thus I will not have direct access to them.

The SLA from the company is such that I will be able to get 100% support when I have issues like enhancement, but I still do not have direct access to the development team of the product (application). How can I manage a product when I have little influence over development of the product?

Answer from Paul Young of Product Beautiful: Wow, as if Product Management inside one company wasn’t hard enough, you are required to cross the boundaries of multiple companies. In some ways, you are in a no-win situation – you have the traditional roles of a Product Manager but you are facing a responsibility without authority problem that is exacerbated by the lack of any real leverage. Your problems are real; what we need to focus on is how to transform your situation into a success.

If I understand your current state, it looks something like this:

Current State

First, let’s clarify: what you are doing in your current role is not Product Management. On the right hand side of the graphic, in your capacity between your company and the client, you are serving in the capacity of a consultant or project manager, documenting enhancement requests and working with a single client. Product Managers talk to the market, meaning that you talk not just to your current clients, but many clients and potential clients.

On the left side of the diagram, you are serving in a business development, technical relationship management, and sales role by acting as an information conduit for what is important to your client and integrating the application company’s tool into your overall solution. The difference between this and Product Management is that a product manager works directly with a development team to implement the features that matter to the market. In your situation, the application company may or may not choose to implement your requests.

Transforming the Situation

From a strategic perspective, is your company tied to the one client, one supplier model? If so, what value do you add? In today’s market, distributors can no longer just stock warehouses or provide front line support, they must innovate. Consider how broadly your solution applies and diversify.

Future state

On the supplier side, having just one supplier for the sole product you sell is a recipe for disaster. In a past life, I worked for a managed service provider that provided outsourced network management for the clients of a multinational telecommunications company. The Telco decided to bring the service back in-house and stop outsourcing it through us — overnight over 60% of our revenue disappeared and we had to replace it. Having other suppliers is something it’s better to have and not need, than to need and not have.

Finally, can you combine the applications you are getting from your suppliers with other code or development you create in-house in a value added way? Some of the most powerful companies in the world are so called “middleware” companies that provide the glue between enterprise level applications. Today, you have lots of great business models for how to provide that glue, everything from throwing headcount at the problem, to software as a service (SaaS).

If your strategic situation can’t change, there are changes you can make to your tactics to increase your chances for market success. First, get very clear about your role and expectations with your boss, your client, and your supplier. Let the client know that, as the middleman, their feature requests are one level removed from your sphere of influence. You will evangelize on their behalf, but are bound by the priorities of your supplier, so critical features may go unfulfilled.

Let the supplier know that their business through you is important and get commitments from them to integrate you into their Product Management process. If your business is important to them, and your client is representative of their market, they shouldn’t have any problem including you on their customer advocacy board or conferring with you on priorities or tradeoffs that they know are important to your client. Hold your client up as a model persona for the market as a whole and push for them to perform usability and beta testing against your client. I just realized that I’m giving sales a playbook for how to game the Product Management system so I will stop there.

Even if you have a “100% SLA” with the supplier, those are just words on paper. What if your client requests a feature so unreasonable that they can’t fulfill it in their business model? Your relationship with the supplier is key. They need to know your face and expect to hear from you frequently. If you throw your requirements over the fence and expect a product to pop out 6 months later, you’ll be unpleasantly surprised.

Best of luck with your situation. In the meantime I suggest reading some of the great resources that Jeff has linked from this blog, as well as training through Pragmatic Marketing or one of the other recognized PM training groups. You can also find my blog at productbeautiful.com.

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