Table of contents:-
- What is a Product Management Audit?
- Who needs the Audit?
- Who Should Conduct a Product Management Audit?
- What is the Objective of a Product Management Audit?
- The Process of Product Management Audit
What is a Product Management Audit?
A product management audit’s purpose is to figure out the status of the company’s product strategy and product management.
The audit is a numerical analysis to churn out the elements that hinder the product strategy and make way for improvement.
All the separate dimensions of the company’s product strategies and management processes are objectively reviewed and rated so that any areas of vulnerability and weakness can be brought to notice and rectified.
An audit can be performed by the company itself or it can also be outsourced providing unbiasedness to the process.
Who needs the Audit?
Mainly startups can benefit from an audit.
The product manager should make use of it, but even the top executives, board, and investors in the startup may want it.
It plays a critical role in giving a clear picture of the product in the market to the entrepreneurs and thus saves them from clinging to unjustified targets over a certain phase.
In return for an audit a business receives authentic feedback.
Who Should Conduct a Product Management Audit?
Though a company can undertake the audit internally, a common practice is to outsource the audit using unbiased and autonomous specialists.
Outsourcing is usually expensive, but it comes with its own share of merits as well.
It erases the scope of politics, conflict of interests, or any other inherent pressure subjected to the business.
This enhances the expert auditors to incorporate their best practices and come up with a free, fair, and optimum assessment if they get the necessary support and authority.
What is the Objective of a Product Management Audit?
The objective of an audit involves gaining a fundamental idea of how the organization or business is performing in the market. What are the various fields where it is lagging behind its competitors?
You can’t proceed forward unless you’re aware of the fault lines.
An audit is basically a measure of the company’s performance in three major areas:
• Understanding the intended market of the product or service.
• Catering to the market needs.
• Generation of product requirements.
The audit statistically studies and judges the company on these factors and assigns a score for the company’s performance in them.
The organisation cannot afford to take these aspects lightly as the ultimate goal of any business is to make money by addressing the target market needs.
A company might assume or accept that it has a broad understanding and grasp over its customers. This is where an audit comes into play.
Audits help prevent making false assumptions regarding the market by making use of statistical and numerical methods of data processing to give an honest status of the market and the company’s position in the market and the customer base.
An audit can highlight various discrepancies such as disproportionate time allocation over tasks, which shall be prioritised above or below any other particular task which is alloted a particular time.
Moreover, it is able to figure out irregularities within department operations. These irregularities may well be so small that they can easily be neglected and overlooked.
Even such irregularities can have potential to give large and long-lasting impact to the business in the long run.
On top of this, it is a process of detection of hindrances in the business. Only after detection can the organization take the necessary steps for elimination of those hindrances.
When an audit has concluded, the organization gains: feedback, knowledge about the areas where they need to focus, what to prioritise and how, whether the resources are being utilised optimally, and/or whether they’re on par with overall market strategies.
The Process of Product Management Audit
Though we are concerned about the product management department, the audit shall also include any other department of the company that plays a role in product strategy.
So a key aspect of product management audit is that it basically involves other parties as well apart from the product management team because the items being audited impacts many other departments as well.
The process is as follows:
• Kickoff meeting: Beginning with a kickoff meeting or an agreement where all the stakeholders are brought in to comply with the auditing team and an agreement laid to provide them the authority, access, and freedom, which will be required for the conduction.
The auditing team uses this phase to get knowledge about the company’s top executives’ estimations or assumptions regarding the targets, the market, the staff, and overall resources. It is significant to acknowledge that the motive of the audit team is to inspect performance and promote improvement, not to criticize.
• Documentation review: The audit team analyses the documents and tools involved in the product management. The objective is to make a report on what is being used and how it is being used and what might be lacking.
• Interviews: Auditors interview the crucial staff members of various departments to assess the effectiveness of procedures and practices.
They conduct one-to-one interview sessions to extract genuine information and feedback.
These sessions provide an insight into the working environment and methods involved.
The information fetched directly from pivotal staff members can be of critical importance to the prioritization of improvement areas.
• Aggregation and Compilation of results: The results and findings from interviews, document analysis, and reviews are then aggregated and compiled by the auditor to form a final report.
It has numerical scoring or statistical representation of all the data and findings of the audit, which includes every single element of product management, representing growth and slow down at various fronts.
This report is then presented to the senior executives.
• Conclusion: The auditor concludes by giving insights around the weaknesses, vulnerabilities that were found, and the measures to be taken.
• Workshops: Now the role of the company’s leadership comes into the picture.
Post-audit, the company can consider the conduction of certain workshops. The purpose of this is to let the stakeholders review the findings of the audit.
Action plans are made to work on the deficient elements in the present strategy. They can also plan to schedule the next audit session to assess the project.
Q: What is the purpose of a Product Management Audit?
A: The basic purpose of a product management audit is to determine what is the current state of performance and standing of a product in the market and to use the facts from the audit to improve the product strategy and management.
It focuses on the three major categories – market understanding, addressal of customer needs, and creation of requirements for the product in the market.
Q: When should a company conduct a Product Management Audit?
A: Audit provides a status report and detects errors in the management for the company so it’s beneficial to conduct an audit at regular intervals.
It’s most needed when a company is performing poorly at product management, as it may not be able to figure out the reasons for the failure.