Product Management for Internal Tools: the Secret Weapon to Great Business Operations
- Product managers for internal tools have been around for over a decade, but companies are hiring for these roles more now than ever
- Internal product managers are responsible for managing and developing the internal or admin tools an organization needs to function
- Great operations at hyper-growth companies is powered by great internal tools
The rapid rise of no-code/low-code has created a new, functional space in business operations. And it’s changing the way people think about the role of product management. Most companies and hiring managers refer to it as product management for internal tools.
Like “traditional” product management in B2B and B2C businesses, internal tool product management is typically led by a dedicated internal product manager (or, by one of many derivatives of that name).
The “internal products” referred to in the job title are the business operations processes, systems, and tools that internal teams use to support their customer-facing external products and services. Your organization might call them admin or internal tools covering everything from data management and CRM automations, to fully-integrated business applications and revenue dashboards.
Where did this function come from? Why is every hot business on the market hiring for internal product management? And what role can no-code/low-code solutions play in the success of internal tools?
What are internal tools?
Internal tools are, at their most basic function, tools or applications that employees at a company use to do their work every day. These are sometimes referred to as admin tools because they manage administrative tasks and responsibilities, freeing up precious time for operational employees to do strategic or customer-focused work.
For most organizations, these internal tools are software programs that:
- Automate or orchestrate recurring operational tasks and workflows
- Store information employees might need to access about company SOPs and policies
- Display customer information, or business performance metrics
- Connect disparate business units or systems in a glue-like fashion (e.g. integrating work streams and data flow between Marketing, Operations, and Finance)
Internal tools can be purchased or built as part of a larger digital transformation process a company undergoes. Many of the ones that are purchased are internal tools that a product manager would oversee. We shared some of the most popular operations tools (many of which are internal tools by definition) for fast growing businesses on our blog in 2021.
You probably already use internal tools at your company. Perhaps you use Google or Microsoft for storing and sharing documents, Notion or Atlassian as a company wiki and for project management, or a custom-built admin panel to help you make important business decisions.
These are fairly straightforward examples of internal tools that have been built to solve a similar internal “customer” problem — providing more transparency for employees, contractors and service providers into how a company functions.
What is product management for internal tools?
As companies grow, the complexity of these internal tools and systems can increase exponentially.
Typically as a result of growth – be it headcount, customers, or order intake – companies eventually outgrow their systems and tools. Once an internal system, process, or tool fails to scale up with the business growth, or actively inhibits this growth, the problem becomes unavoidable. Companies may assign one person or a task force to handle the internal tooling situation at this stage.
This is typically when a company will look to hire a product manager for internal tools. Kent Mcdonald, in his post on internal product management from 2017, says:
“The output of internal product management is products that your organization does not offer for sale to others, but rather uses to support its various business activities.”
Ultimately it’s up to this person – or group – to make sure internal tools are purposefully built for the company at its current stage, while also taking into account what the future organization will need to function at top speed as it grows.
All of the principles for great product management still apply to internal tools:
- Start by identifying the customer’s problems and needs
- Create a (technical) solution that solves this and adds value
- Managing the technical and business requirements and development process
- Test solutions for usability and product/market fit
- Product launch and marketing (yes, there is internal marketing)
- Testing, reporting, and continuous improvement
Who is responsible for internal product management?
Though internal product management is still in its infancy, companies have been looking for product managers for internal tools as far back as the mid-to-late 2000s.
These product managers usually sit somewhere between IT and the growing Product Ops function, sometimes with their own group of dedicated developers and designers. Common job titles for similar roles are product or business analyst, project manager, or product owner.
Just like with product managers who are responsible for customer-facing products, product managers for internal tools need to identify customer problems, and build scalable solutions that are loved by users, and good for the business bottom line (even if they don’t make money directly).
The only difference is that this product manager’s customers are the employees, contractors, and service providers of the business. Jawwad Siddiqui adds that product managers for internal tools will also generally be tasked with building products that save time and money for companies by increasing efficiency.
Product managers for internal tools might feel like the sidelined product managers within a company, because they don’t work on revenue generating, customer-facing products. Tia Peterson explains in her Medium article that internal product managers may feel stuck between creating and following a robust product strategy that will prevent future problems, and playing the role of an internal help desk or business analyst (this is only one of many great takeaways from her article about life as an internal product manager).
This can lead to internal product managers feeling like they’re stuck in a box, unable to move forward on what will create exponential value for the organization.
However, with creativity in handling troubleshooting and bug fixes, marketing new solutions and successful updates, internal product managers can build products with serious long-term value for their organizations. In that sense, being an internal product manager can be just as rewarding as being a product manager for customer-facing products.
What are the characteristics of a good internal product manager?
Jane Austin, senior lecturer at Harvard Business School and director, advisor and executive coach to startups says there are three things great product managers need: core competencies, emotional intelligence (EQ), and company fit.
Core competencies include the rituals and daily tasks product managers are required to do, such as user interviews, assigning resources, and reporting on metrics. Emotional intelligence covers self awareness and self management, social awareness and managing relationships with others. Company fit involves an aligned understanding of what a product manager is responsible for, and how they work with the c-suite and within the working culture of an organization.
These are a great starting point, but there are a few other characteristics that make a good internal product manager.
You can really get to know your users
An internal product manager’s users will be the people they work alongside daily. That’s a big advantage, because getting meaningful feedback from users can be much faster and easier than for product managers working on external-facing products.
A person you’ve built a working relationship with is more likely to want to participate in a user interview or usability session and provide honest feedback without any further incentive.
It’s important that internal product managers listen attentively to the pain points that are brought up during user interviews, and why they are behind specific product feature requests.
Internal product managers also need to be masters of managing expectations, and helping employees understand that even if they talk about something in an interview, it may not appear in the end product
You can find the real root of the problem
Understanding the motivation behind a user’s behavior is equal parts art and science. It involves actively listening to users, empathizing with the problems they face, and looking at data, rather than jumping on the suggested solutions they may bring up. Understanding why users do what they do will ultimately lead you to the problem you’re trying to solve.
Using frameworks such as Jobs to be Done can help structure the conversations your team has while analyzing the results of your qualitative and quantitative research, and making important product decisions. They can also help your team focus, and act as a reminder for what you’re building internal tools for.
You build product into your company culture
Looking to the future, Ayman Jawhar, product management professor at INSEAD, says that companies need to stop looking at product as a role, and embrace it as part of the culture of their organizations.
He adds that product managers are the places where value creation happens within a company, and as teams continue to work in cross-functional setups, they’ll also be where culture and values are brought to life. Because internal product managers work on tools and products for internal stakeholders, their impact on a company’s culture can be much larger than other product managers.
How to succeed in internal product management
Creating internal tools that employees love (and actually use) is the secret to hyper-performing business operations. We truly believe that great operations are the result of great internal product management.
Be an excellent product manager
Internal product managers are still product managers, and should be treated as such. That means they’ll follow general product management best practices, and have a distinct set of OKRs or KPIs to measure success (even if those look different from product managers building customer-facing products).
Silicon Valley product management thinking still dominates the market, with leaders like Marty Kagan, Julie Zhuo and companies like Reforge offering cohort-based programs on product management and growth.
Internal product managers should start by building a product that addresses a customer problem in a way that’s better than their current solution — even if that starting point is a massive spreadsheet.
Get a holistic overview of business needs and objectives
Success looks different for each business. It is generally defined by the business model, industry, investors, and leaders at the company. For product managers working on internal tools, it’s important they are crystal clear on what success means for the business in order to build the right tools for fast growing businesses.
The success of growth-stage organizations will be defined by an organization’s ability to operate at a higher volume. Internal tools need to contribute to better and more scalable core operations. Business success metrics are one way to measure the wants and needs of a company, but all businesses are successful because of the people who work there.
Having structured conversations with your customers that include questions designed to uncover the challenges they face and why, is another way to grasp what their needs and wants are. If you’re not sure how to structure these conversations, user researchers or UX designers can provide a lot of guidance.
Invest in low-code and no-code tools
Low-code and no-code tools can help internal product managers build great internal and admin tools without having to start from scratch. Using rules-based automation for business operations functions, internal product managers can save time and money when developing their internal tools, and get started in a matter of days rather than weeks.
There are hundreds of low-code and no-code tools created for everything from project management, to remote onboarding. Finding the tool for the job that needs to be done is a more effective approach for internal product managers, and will lead to more successful outcomes. But being a great internal product manager goes back to understanding the problem at hand, and knowing what tool can more effectively solve that problem.
Next Matter is a modular, all-in-one platform that can be customized to fit the exact requirements of your business’s operations. You can build and launch operations tools, workflows and integrations fast, while orchestrating everything from one, unified platform. It’s designed to scale as fast as hyper-growth organizations do.
If you’re an Internal product Manager looking to integrate no-code and low-code software into your existing internal tools, or are just curious about what process automation can do for your business, get in touch with our Customer Success team for a 15 minute coffee chat today.
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