New England Product Group Blog

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Product Management as a Value Center

Image Credit ColiN00B / Pixabay 

I’ve witnessed many debates within organizations about whether product management should be considered a cost-center or a revenue-generating center. In my opinion, this is the wrong way to frame the discussion.

Instead, we should focus on the value product management brings to an organization.

Product management is a critical function within any company that creates and sells products or services. Effective product management is the key to creating products that customers love, that meet market needs, and that drive revenue growth. Product management is not just about creating products. It is about creating value for customers and the organization as a whole.

When product management is done well, it is a revenue-generating center. By identifying market needs, defining product requirements, and guiding the development of products that meet those needs, product management drives revenue growth. When products are successful, they generate revenue for the organization, and product management is directly responsible for that success.

However, when product management is done poorly, it can be a cost center. When products fail to meet market needs or are poorly executed, they can result in wasted resources, lost time, and lost revenue. In these cases, product management is not generating revenue. Instead, it is costing the organization money.

So, the real question is not whether product management is a cost-center or a revenue-generating center, but rather how can we ensure that product management adds value to the organization? To accomplish this we must invest in product management, provide the necessary resources and support, and hold product management accountable for delivering results.

Product management should be viewed as a strategic function critical to the success of the organization. Product managers should have a seat at the table when it comes to decision-making, they should be empowered to make decisions that will drive revenue growth and create value for customers, and they should be accountable for the outcomes.

Originally published in Bootcamp on Medium.