Unfortunately, the field of product management does not focus enough on the product management of internal products. These internal products (aka admin portal or internal tools) are used by almost all software-as-a-service (SaaS) companies to support their customer-facing (external) products.
The focus of this blog post is to provide an ultimate guide for current and aspiring internal product managers. It is based on my experience of managing internal products at Checkout51, LookbookHQ, and other product management projects.
What is internal product management?
Let’s start with the definition of internal product management;
“The outcome of internal product management is you solve problems of users internal to your organization (partners, employees, customer service etc) OR enable your organization to satisfy the needs of your customers.” – KPB Media
For example, you are likely familiar with buying products on Amazon — their external customer-facing product. However, when you have an issue with your order and contact customer-service, they interact with an internal tool (aka admin portal) to assist you. Here is a breakdown of Amazon’s products — internal and external.
|Amazon’s Product||Sample Products||Users|
|Internal Products||Product Inventory Management, Delivery Logistics, Fraudulent Products etc.||Suppliers, Delivery Partners, & Customer Service Agents|
|External Products||Amazon.com, PrimeVideo.com, Audible.com etc.||Amazon’s Customers|
What is the different between internal and external product management?
There are fundamental differences between internal and external product management. Here is how the primary user and goal of each are different;
|Type of Product Management||Primary User||Goal|
|Internal||Employees||Support internal employees in delivering the product or service.|
|External||Customers||Improve the product for customers or users|
Internal product management focuses on:
- Customer is the “Internal User” – These are usually the internal users (employees, customer service etc). For example, the customer service might need a tool to quickly process returns for the customer.
- Cost and Time Reduction – To goal of the product is make the job/task of these internal users easy by reducing the time (and cost) it takes to finish that task.
Whereas “external” product management focuses on the customer and increasing revenue. For example, amazon.com and a buyer/customer. For additional differences and similarities in internal and external product management, read this article.
Obstacles and Challenges for Internal Product Managers
Internal product managers come up against unique obstacles when demonstrating value internally and for their career growth. Specifically;
- Demonstrating business value – Since internal product managers do not generate new revenue, they are sometimes have a harder time demonstrating value. This value is needed to ask for more headcount for resources (developers, QA, etc).
- Lack of “Marketing” of the Internal Product – Unlike the customer-facing product, internal products do not have a dedicated marketing team and don’t end up being celebrated like the external product. Thus, the internal product mangers must take the role of “marketing” and ensure they make the company and executive realize the wins.
So how do you, as an internal product manager, overcome these obstacles?
3 Career Growth Tips for Internal Product Managers
Here is how internal product managers can ensure their work is being noticed inside the company and they are setup for success – for recognition and career growth.
1. Clearly demonstrate your value (in metrics) to the stakeholders
As an internal product manager, you should be regularly measuring and reporting on these items;
|Item||Description||Example of the Item|
|Cost savings||Quantify the cost savings of your work||Sending e-transfers to our suppliers instead of physical cheques, has reduced the cost of monthly billing by 25%|
|Time savings||Quantify the time savings of your work||Using O.C.R technology to recognize text on receipts has reduced our team’s processing time by 70%|
|Enabling internal capability||Did you help enable a new internal capability?||Adding customer profiles to our internal tool enables our customer service team to know customer details|
|Enhancing customer experience||Did you enhance the customer experience?||Improving the tool that approves hotel bookings has resulted in customer getting delighted sooner about their booking|
Special mention goes for “Enhancing customer experience” item. Remember to tie back your work to this item as much as possible. It is of no value to save time, cost, or build something if it is not helping the business better serve its customers. Good internal product managers will remember that and integrate that into their work.
2. Become the evangelist of your internal product
Companies tend to celebrate only external (user-facing) products. Take initiative and change that to also focus on the internal product.
Here are some ideas to get internal stakeholders excited about the internal product;
- Benchmark your internal tools against the competition – Are we behind, what can we do to win?
- Do monthly or quarterly reviews – what changed, what was the impact and what is coming next?
- Communicate the roadmap to others – just like external product, communicate and share the internal product roadmap so stakeholders can continue to be informed about the upcoming improvements of internal tools.
This point builds on the previous point of evangelizing your internal product. Stories are remembered and so are case studies. Work with the internal stakeholders – e.g finance or customer service – to create case studies that can be shared with the executive team.
Some examples and tips include;
- Conduct interview and get testimonials from users of internal tool (employees etc.)
- Do “before vs. after” of a feature or capability
Managing stakeholders as an internal product manager
Unlike regular product management, internal product managers can have more stakeholders and, thus, more complex relationships to manage. Here is what typical stakeholders look like for each type of product;
|Product Type||Primary Stakeholder(s)|
|Internal Product||Different employee teams (Customer Service, Finance, Operations, and Sales)|
We can see (from the table above) that internal product manager will have more stakeholders to manage. For example, when prioritizing, do I make something for the sales team or the operations team?
In handling these situations, here is what Michael Montecuollo (Director of Principle Consulting, Door3) suggests;
“Every product that I’ve ever worked on is an exercise in prioritization. And the key to success is understanding what those priorities are and striking a balance between them in order to come up with something that serves all the different groups equally well. – Source: This is Product Management”
In the end, you may not be able to help all the stakeholders equally. However, if you listen to their needs and focus on the overall wins for the company (regardless of the win for individual teams), they will be able to wait until their work is prioritized.
Project types for Internal Product Managers
What kind of projects do internal product managers work on? This depends on how many secondary stakeholders the internal product manager manages. Here is a diagram that visualizes the complexity of projects along the spectrum of a single to multiple stakeholders;
In summary, internal product manager’s projects can include the following scope;
- Single department (i.e sales) is the beneficiary of your work. The tools are essential — they can’t do their work without it.
- Multiple departments (i.e sales, customer service etc) are the beneficiary of your work. For some the internal tool is essential, for others, it is not essential.
As I go through my product career, I will continue to update this post. Do you have some insights or learnings? Please do share in the comments and I will include it in this post (crediting you for it).
5 comments On Ultimate Guide for Internal Product Management (with examples)
Hi- I was just wondering if you developed this thinking further? Happy New Year!
sbdurcan, good timing. I am planning to post more of my learnings about internal product manage in February 2018. Please subscribe or send me an email so I can let you know when I am done that. It will be nice to get your feedback.
Hi Jawwad… Have you posted anything furthe on this topic? Would be great to network with you and delevop this thinking further to share with others. Thanks
James, thanks for posting and keeping me accountable. I do have drafts ready for a few more blog posts on internal product management. I do plan to post them here according to my priority list. If you want to work together to speed that up, please connect with me on social media (links up top) to chat.
Isn’t “internal product management” and “internal customers” terms that are thrown around so that infrastructure teams can demand higher salaries within their org?