Everything a Product Owner Needs to Know Before Starting a Software Development Project

Who is the product owner?

The product owner role is so demanding that it can be compared to being an entrepreneur and CEO, owning all responsibility for the product’s success. Sometimes, a product owner in software development is confused with project managers or business analysts who focus on more technical aspects of the development process and make sure everything is delivered on time and within budget. 

The software product owner has more of a business perspective on the product and a wider view that includes the product vision, roadmap, budget, business plan, and monetization strategy. Ideally, the product owner is responsible for the profitability of the finished product.

Product owners exist within Scrum teams that work according to an Agile approach. Let’s talk about Scrum and Agile in detail before discussing the product owner roles and responsibilities. 

Scrum and Agile product development methodologies

Agile software development is a set of principles that allows a team to accelerate the development process and satisfy users’ needs with every feature that’s implemented in the product. Business value is the core of Agile development; even at the earliest stages of development, the product should bring some business value. 

Scrum is a framework that incorporates the Agile mindset and divides the whole development process into sprints — short-term development activities dedicated to a certain goal.

Where’s the product owner’s role in this process? Making decisions on further development after each iteration is the responsibility of the product owner. Every sprint ends with a retrospective that the agile software product owner uses to decide on the further development strategy. 

Scrum requires lots of ongoing planning, as each sprint is influenced by: 

• New business goals
• Market response
• Customer satisfaction
• New and emerging technologies and trends
• Changing market conditions
• Competitor analysis

The product owner should focus on what happens in the market and inside their product and make decisions on further development. This is only one of the responsibilities of the product owner in the software development process. Let’s talk about their other duties.

The product owner’s rights and responsibilities in the development process

Let me give you a short product owner role description. The software development product owner is the main decision-maker in the Scrum development process, and their decisions affect every sprint. The main goal of all of the product owner’s decisions is to make a high-quality product that will work for the target audience and solve their issues.

How does the product owner actually ensure product quality? What is the main role of the product owner?

Product owner responsibilities:

• Create and manage the product backlog
• Prioritize the development backlog according to current business needs, value, and return on investment (ROI)
• Manage the functionality included in a single sprint according to user stories
• Communicate the business goals and product vision before and after every sprint to keep the team on the same page
• Engage with customers and define their needs to translate them into functionality or the user experience design
• Lead planning meetings, retrospectives, and reviews with the development team
• Track development progress during every sprint
• Review the backlog and make decisions on the functionality that will be developed in the next sprint
• Make any necessary changes to the project based on business goals and market conditions
• Communicate with all other stakeholders on the status of product development
• Control the time and budget invested in the product at each stage of the development process

When you work with a development team as a product owner, you need to consider both the technical and business aspects of the project. While developers strive for technical perfection, you need to make sure that investment in certain functionality or technologies is worth it in terms of future revenue, customer satisfaction, and so on.

The product owner is the main decision-maker in the Scrum development process, and their decisions affect every sprint

As the digital product owner, you also represent all stakeholders in the development process, while the project manager usually represents the development team. 

As the main decision-maker, you have the right to: 

• Accept and reject the development team’s work
• Expect the team to keep deadlines
• Determine priorities
• Make drastic changes to sprints or change the direction of the project

Now let’s talk about what a product owner should consider when orchestrating the development process. 

What to pay attention to during development as the product owner

As a person with lots of responsibilities, the product owner should keep many things in mind, from technical risks to market realities. There are some tools and techniques to keep yourself and the whole team on the right track.

Develop a product vision

Your product vision is the core of the project, though it can change over time due to market demand, customer feedback, and new trends. However, at each stage of development you should refer to your product vision and answer the following questions:

• What kind of problem does your product solve?
• How exactly does it solve the problem?
• Who are your customers?
• How is your product different from others?
• Does your product have any alternatives that aren’t your direct competitors?

A good product vision will allow you to prioritize your development procedures and keep your team on the same page. When developing a product vision, make sure to consult with business and technical specialists, as their input can help you shape your vision.

Study the roadmap

The product roadmap is usually developed by the product manager. As the product owner, you should study the roadmap and pay particular attention to: 

Roadmap items including features, functionality, and goals. Make sure functionality doesn’t prevail over goals; if it does, you’ll lose development flexibility.

Timeline. Lengthy roadmaps make the development process less agile and less flexible, so you should make sure the roadmap is divided into short sprints.

Responsibilities. Look at the collaboration patterns on the roadmap and pay attention to the relations between processes and team members responsible for them, as this will affect communication and reporting.

Look for any bottlenecks in the roadmap that may slow the development process.

Extract meaningful metrics

The final result of the project is one of the digital product owner responsibilities. Put simply, your product should be used by customers and bring revenue, as these are probably the two most important metrics there are. 

However, to achieve these results, you need to track other metrics that will allow you to find weaknesses in your product and improve the customer journey. There are lots of KPIs, and your goal as the product owner is to track the most important.

Here’s an example of important metrics for an online store: 

• Conversion rate
• Customer lifetime value
• Return rate
• Growth rate
• Cancellation score
• Cart abandonment rate
• Customer acquisition cost
• Active daily/weekly/monthly users

Keep your business model in mind

Strangely, many companies don’t have detailed business plans for their products, and this lack of clarity affects the development process. Keeping the business model in mind and reflecting it in development is one of the most important software product owner roles and responsibilities. You should know your product’s business model and determine how you can improve the product accordingly to make more profit. 

To make sure your product corresponds to the business model, it’s a good idea to create a business model canvas with stakeholders and build your project around it. 

Create a value proposition

Though marketing isn’t the responsibility of the product owner, you should still think about what exactly you will sell when the software is released. To do this, you should keep in mind the business model and the target audience. Understanding what problems the software solves and making sure these problems actually exist is crucial for the product’s success.

Building a product without a clear understanding of its value proposition is risky, and may lead to unsatisfied customers, low demand, and ineffective marketing campaigns.

Communicate with users

One of the principles of Agile development is testing the waters as soon as possible. This means you need to extract features for the MVP and release your product as soon as possible. Why is this important? Mostly because you need feedback. 

As the product owner, you need to pay close attention to what users say about your product and how they use it. The sooner you get that information, the more resources you’ll be able to invest in the right things. 

Don’t confuse user representatives with real users when you gather feedback

So, how can you get feedback? Right at the release, you can gather a focus group and ask participants about their experiences using the product. After your product gets more users, make sure to gather feedback. You can use email questionnaires or look at reviews on app markets if you release an app. 

Don’t confuse user representatives with real users. Some product owners end up asking stakeholders for feedback, but while this feedback is also valuable, real users’ opinions should matter more. 

Communicate with customer service

When you ask your users for feedback directly, they may not give you what you need. Sometimes their answer is “everything’s okay,” and users may not be ready to give detailed feedback. 

However, when a user comes to your customer service team, they have a real problem at hand. Maybe they didn’t find a particular feature, and you should make it more visible. Or perhaps they have a problem with solving the issue your product is supposed to solve, or perhaps something is implemented inconveniently in the app. 

Your customer service staff gets insights every day because they meet the most unhappy customers that have something to say and give you an opportunity to fix and improve your product.

Talk to your development team

Your developers know all the ins and outs of the project, and they can best answer your questions about technical debt, warn about potential issues, and help you make your software scalable and maintainable. 

If you outsource software development, it’s vital that you communicate with your team even more than if they were in-house. A good outsourcer will provide you with regular reports and consult you on the latest trends and industry best practices to make the app development process fast and effective. 

Prioritize your backlog

A backlog, like an attic in which you store more and more things to deal with later, quickly fills up. Some tasks are more urgent than they may seem; others become unnecessary by the time you finally reach them. 

Your responsibility as the product owner is to regularly review the backlog and manage the old items there. Don’t hesitate to kill tasks that are no longer relevant and keep your backlog up to date.

When to outsource development without a product owner

The product owner’s role comes with a lot of responsibilities and is loaded with tasks. Many software development vendors oppose the idea that you need a product owner for every project, as there are too many issues a single person should solve. 

In most outsourced projects, the development team is fully responsible for delivery of the product. Accordingly, an outsourcing team should have some degree of autonomy when it comes to deciding which bugs to fix or which features to develop next. 

In some cases, it can be risky to give that amount of responsibility to a single person because such an individual has to be unbiased and make decisions based on developers’ advice, user feedback, stakeholder interests, and business needs.

Relying on a team that has a variety of opinions and experiences can be beneficial for a business and lead to the best decisions. Some projects can be successful without a dedicated product owner, though there’s always a need for a client’s representative on the development team. 

There are two main factors that determine whether you need a product owner on your project. 

Outsourcing price model

In outsourcing, there are two common price models: fixed price and time and materials. If you work according to a fixed price model, your project probably doesn’t need a product owner. 

Fixed-price projects are usually small and have a clear scope and requirements, so you don’t need a separate specialist to make decisions based on lots of factors. The project flow is predictable and doesn’t require any interference. 

The time and materials model suggests more agility in the development process, though the vendor is still fully responsible for it. However, all business decisions lie on the client’s shoulders, and many clients prefer to assign a product owner or product manager to coordinate a time and materials project from the business perspective.

Type of project

Software development projects can drastically vary in complexity. While some are basic and don’t need a product owner, complex software projects that must navigate ever-changing market conditions and that take a long time to develop require a more flexible approach. 

If your project has a clear scope, fixed requirements, and a predictable deadline, you don’t need a product owner. A professional development team that has experience in developing different types of products and knows the current software development trends will do great without a product owner. Assigning a good project manager and a client representative for communication will be enough.

Some software development companies, including Mobindustry, also offer business consulting services. This allows you to make sure your product will solve business goals and helps you avoid investing in features that don’t actually bring any profit. 

When is it necessary to involve a product owner in an outsourced project?

If you’re building a complex product in unpredictable conditions, a product owner is absolutely necessary. Large-scale projects with high-end technologies like machine learning, artificial intelligence, enterprise IoT, and big data are expensive to build, and the risks of failure are high. 

Often, such products require lots of developers, quality assurance specialists, and other professionals that need to be coordinated. In a large scope of work, it’s easy to lose track of current business needs, focusing more on execution than outcomes.

A product owner in this case is the main mediator that has a clear understanding of the business priorities and knows which functionality solves concrete problems. 

If you outsource your development process, you need someone who will at  least partially play the role of product owner to control the development process and convey your business goals to the development team. 

Final thoughts

The product owner’s role is vital for large products and enterprise solutions that involve complex technologies and must navigate ever-changing market conditions. The most important responsibility of the product owner is making sure that the product corresponds to the business goals and meets user requirements.

A product owner isn’t essential in all software development projects. However, the work goes much better if there’s a dedicated representative from the client’s side who communicates with the development team and makes sure that all stakeholders are on the same page.

If you have any questions about the perfect outsourcing team structure, don’t hesitate to contact us. Mobindustry works with clients of various sizes and according to different collaboration models, so we’ll be able to help you choose the right team structure for your project.