Product Manager vs. Offering Manager: What’s the Difference?
Updated:
May 21, 2024
|
5
min read

Product Manager vs. Offering Manager: What’s the Difference?

Stepping into the world of product management and offering management can be a labyrinth of confusion, but rest assured, you’re not alone in this. The terms are often used interchangeably, and a simple search for “offering manager” will highlight various product management and marketing roles, adding to the complexity.

This mix-up is a classic example of “term overloading,” where the same term describes different things. It often leads to confusion about what product management truly entails.

So, what exactly is product management, and how is it different from offering management? This distinction is crucial to effectively navigating the tech industry. Let’s break it down for you.

You’ll learn:

Smart Tip

Focus on continuous learning and collaboration to excel in your product or offering management career. Master the intricacies of XaaS models and annual recurring revenue (ARR) to stay ahead in today’s subscription economy. Cultivate cross-functional relationships to ensure you leverage your team’s full potential and align product development with market needs.

Understanding Product Management

What is product management all about? In essence, it’s traditionally focused on integrating features and use cases into core technology to meet the needs of specific user personas. As a product manager or product line manager, you typically focus on innovating within a particular technology or domain. You’re usually judged on your ability to launch innovative products on time and within budget.

Many modern product managers, however, take on a broader role, crafting end-to-end, compelling customer experiences designed to boost adoption. Today’s tech landscape, including cloud, data, the Internet of Things (IoT), and AI, offers insights into customer behavior that were once beyond reach. Your role as a product manager is to harness these insights to build lasting customer relationships, providing them with actionable data and automation that add significant value.

You’ll likely work closely with customer success teams and leverage IT and analytics teams to monitor and measure adoption. However, achieving goals like customer satisfaction and market growth in your target segment requires more than your expertise. It demands a deep understanding of business processes to create clear value propositions that address critical metrics at a price customers are willing to pay.

Collaboration is vital in product and offering management. By working together as the product manager, you and your offering manager can bridge the gap between product development and market demands, ensuring your products thrive in the marketplace. Your role is integral to this process.

Related: Building a Successful Product Management–Customer Success Relationship

Understanding Offering Management

When you think about offering management, especially in the XaaS (anything-as-a-service) world, it’s about overseeing the entire life cycle of an offering portfolio. As an offering manager, you’re responsible for validating your market needs, defining the value proposition, and ensuring the portfolio aligns with what your market segment requires. Your role is crucial in establishing the market fit and determining the best monetization strategy.

Managing the Offering Portfolio Life Cycle

Your offering portfolio might include technology, services, and data analytics assembled to meet your customers’ needs. As the offering manager, you focus on growing and improving profitability. This includes developing a pricing model and strategy to differentiate your business and create a solid economic moat. Some even call this role a “mini-CEO” because of the broad scope of responsibilities.

Your job as an offering manager is to optimize customer value and vendor value capture by ensuring:

  • The offering is sellable through all appropriate channels, like direct sales, e-commerce, and partner ecosystems.
  • Your support team can effectively service the offering.
  • The solution is designed for easy renewability.
  • The offerings are designed for scalable and cost-effective operationalization.

Focusing on these areas ensures your portfolio is well-positioned for success in a competitive marketplace.

Where to Find Offering Managers

As your company expands and its portfolio becomes more diverse, offering managers play an increasingly important role, distinct from technology product managers. Companies like IBM and Autodesk separate the responsibilities for life cycle success from those for technological success.

Meanwhile, supply chain vendor Blue Yonder is heavily investing in offering managers, understanding that comprehensive and outcome-focused offerings are critical to their success. This distinction highlights the growing importance of offering managers in shaping business strategy and ensuring your offerings align perfectly with market needs.

Related: The State of Offering Management 2024

Investing in XaaS Product and Offering Management

As a product manager or an offering manager, you share some fundamental similarities with your counterparts:

  • Influence Without Authority: You likely don’t have direct reports, so you rely on your influence to unite teams.
  • Cross-Disciplinary Collaboration: Your role requires you to work across teams and disciplines, tapping into your company’s entire arsenal of talent and intellectual property to reach your goals.
  • Close Partnership: Your success in customer satisfaction and market penetration hinges on your collaboration, ensuring both roles align for optimal outcomes.
  • XaaS Model Expertise: To navigate the intricacies of today’s market, you need a deep understanding of the XaaS business model.

Foundational XaaS Knowledge

Ongoing changes in hardware, software, and managed services industries persist, shifting the focus to evolving product and service portfolios, new business models, and innovative customer offerings. As companies transition to XaaS models, your top priorities must also evolve, focusing on:

  • Margin challenges of as-a-service models
  • Crafting new value propositions
  • Developing customer engagement models
  • Addressing new cost sources
  • Navigating disruptions in partner ecosystems
  • Equipping product and offering managers with a solid foundation in the XaaS business model
XaaS Value Creation and Growth

Regarding XaaS business models, only 9% of product and offering managers rate themselves highly on understanding the Annual Recurring Revenue (ARR) formula. This gap indicates that many in these roles may need to understand the XaaS model more to build effective solutions.

Traditional product and offering managers often assume they understand subscriptions and adoption well. Still, they may need to take advantage of critical opportunities to enhance customer value, capture revenue efficiently, and engage customers cost-effectively.

The XaaS business model reshapes how you design and package solutions, articulate value propositions, and engage with customers. The most reliable indicator of a customer’s likelihood to renew is how well they realize the value proposition. This requires a strategic approach to designing for renewability.

For XaaS businesses to achieve high growth and profitability, they must adopt actionable plans that align with the customer and engagement requirements of a scalable and profitable XaaS solution design.

Related: Brainstorming Compelling XaaS Offers

Navigating the World of Product and Offering Management

Understanding the distinctions between product manager versus offering manager is crucial for navigating the tech landscape. While these roles share similarities, they each hold unique responsibilities that are pivotal to your business’s success. As you refine your approach to product development and offering strategy, focusing on collaboration between these roles can lead to better market alignment and customer satisfaction.

The shift to XaaS models introduces new challenges, requiring product and offering managers to understand annual recurring revenue (ARR) and the intricacies of the subscription economy. Bridging the knowledge gap in these areas is crucial to achieving scalable growth and profitability.

Your Key Takeaways

  • Distinct Roles, Collaborative Goals: Product and offering managers have unique responsibilities, but working together is critical to aligning product development with market demands for optimal customer satisfaction.
  • XaaS Model Mastery: Understanding the nuances of the XaaS model and ARR is essential for driving scalable growth and profitability in today’s subscription economy.
  • Deepen Your Knowledge: For more insights on product and offering management, visit the TSIA Portal to equip yourself with the knowledge to navigate the evolving tech landscape and position your business for long-term success.

Smart Tip: Embrace Data-Driven Decision Making

Making smart, informed decisions is more crucial than ever. Leveraging TSIA’s in-depth insights and data-driven frameworks can help you navigate industry shifts confidently. Remember, in a world driven by artificial intelligence and digital transformation, the key to sustained success lies in making strategic decisions informed by reliable data, ensuring your role as a leader in your industry.

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Ready to delve deeper?

Explore the wealth of insights available on the TSIA Portal, where you can find more resources to enhance your understanding of XaaS product and offering management. Equip yourself with the knowledge to navigate this complex landscape and ensure your business is positioned for long-term success.

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