Moving from an IT to a Product Organization

Many established companies that began as retailers, airlines, or financial firms now sell directly to customers online, yet they often manage that customer-facing software the way they manage internal IT systems. The result is poor online experiences and no organizational capacity to fix them. Cagan argues that product software differs fundamentally from IT software: users choose whether to adopt it, scale runs into the millions, and outages hit revenue and the CEO immediately. He lays out ten organizational changes needed to build a real product competency, from separating customer-facing and internal software to hiring product managers, UX designers, and online marketers and treating metrics as central. He also warns that IT-focused consultancies often perpetuate the confusion.

01Key takeaways

• Draw a clear line between customer-facing product software and internal IT software, with different staff, processes, and resources.
• Hire product managers to represent target users and lead discovery, and keep product management separate from project management.
• Invest in UX and interaction designers, since software that needs no training course is hard to build.
• Build operations, QA, and online marketing capabilities suited to millions of users and always-on revenue-critical systems.
• Instrument the site, define key business metrics, review them daily, and push relentlessly to improve them.
• Be skeptical of agencies and consultants whose experience is IT or enterprise software when building product software.

02Key sections

Why IT organizations struggle with customer-facing software

Companies that moved online often treat their public websites like internal systems, producing weak customer experiences. Cagan notes this is especially common outside Silicon Valley.

How product software differs from IT software

Customers choose whether to use the software, can leave in a click, and number in the millions, while internal users must comply and tolerate problems. This raises the bar for quality, design, and operations.

Ten organizational changes needed

The changes include separating product from IT work, adding product managers, UX designers, engineers, QA, site operations, and online marketing, and rethinking development processes. Teams should also define key metrics and drive them relentlessly.

Beware of consultants who don't understand the difference

Many professional services firms are experienced with custom IT software but not product software, and their approach can keep the problem going. Leaders should be cautious when hiring them for product work.

03From the post

“A partnership dedicated to teaching best practices to product teams and product leaders”

Summary and takeaways written by PM Atlas; quotes are short excerpts. © the original author.