I was speaking with a product manager last week who was describing the challenges of managing a cross organizational team while getting ready for the launch of a major enhancement to an existing product line. When she described the team I asked her why finance was absent. She indicated that product management would engage finance and accounting at the end of the process, three weeks prior to the go live date. In my mind this was a mistake - albeit a common one - and I told her why.
What is finance focused on? Pricing, billing, investment, legal and revenue recognition to name a few. Without all of these issues identifed, agreed to and in place, a new product or service cannot launch. In almost every case finance is part of the team that approves any new product initiatives. The company looks at them as the conscience of the organization. They are not only actively engaged at the outset but they need to be part of the team that helps manage the full product lifecycle including launch.
In addition, finance can be a product manager’s best friend in terms of tracking investment pre-launch and revenue post-launch. They don’t just contribute to the cft, they actually are the lynch pin in delivering product readiness and ultimately measuring success or failure. Not only that, you really don’t want to upset the area of the organization that signs paychecks and approves expenses.
It is interesting however that in many cases a lot of pms are intimidated more by finance than their customers. Work with the CFO. Find a member of the finance and accounting team that you’re comfortable with. You would be suprised as to how you can lower the risk of launch delay or failure if you have the money men and women actively engaged.
April 26th, 2008 at 7:38 am
Mike:
This is very true. I’ve had more than one product launch derailed or seriously delayed due to finance issues that should have been factored in earlier. However, I’ve also noticed that among my clients over the years it can be a matter of culture too. Some companies (notably those that have simpler billing and finance relationships with their customers) have a finance dept. that simply implements what the development and marketing teams push out the door. While I agree with you that they should be factored in sooner than three weeks, in some cases their involvement is a non-issue (i.e., merely executional) and the company has gotten used to this and evolved a launch system that factors it in.
Still, I agree that involving them early is better for all the reasons you mention and I encourage my clients to do so.
Dana
April 28th, 2008 at 4:52 am
I agree with Mike’s point. I learned that some of my most valuable launch resources were Finance and Legal. Those groups would identify problem areas that weren’t obvious and prevent little issues from becoming big ones.
April 28th, 2008 at 5:30 am
As with any member of a launch team, Finance is an important component of that team and need to be active through the entire product lifecycle. We’re all in agreement on that point.
The one issue that is missed by most pms is that teaming with finance does not only give your launch greater chance of success but having finance as an ally through periods of difficult negotiation is tremendously important.