Option One: The Customer Plays the Product Owner Role
One way to apply the product owner role is to ask the customer to play the role. This option is particularly useful for the development of bespoke (custom) software. For instance, if a web application is developed for a company’s marketing group – either by an in-house team or by an external software provider – a member of the marketing group should take on the product owner role. This approach is illustrated by the following picture1:
Advantages: The customer steers and controls the development of the software directly. This allows the customer to own the product, speeds up decision-making, and increases the likelihood of creating a product that serves the customer needs.
Challenges: The customer must be available, qualified, and empowered to create a successful product. The customer and the team must value transparency and develop a healthy, trustful relationship. The latter tends to be particularly challenging when the customer and the team have different interests, for instance, getting the essential features shipped as soon as possible vs. maximising revenue, or if they have had difficulties to collaborate in the past (“IT never delivers”).
Option Two: A Customer Proxy Fills the Product Owner Role
Alternatively, we can decide to separate the customer and the product owner role. This option is applicable when software is developed for several customers, for instance, when a commercial software product is created or when different departments of the same company use software developed in-house. In both scenarios, the product owner acts as a customer proxy who listens to the ideas and requirements of the customers and users but decides when which features are released. The following picture illustrates this option:
For commercial software, a product managers typically takes on the product owner role. For software developed in-house, a project manager or business analyst may play the role. Note that picture above illustrates the main communication paths. Team members talk to customers and users directly of course, for instance, in the sprint review meeting when discussing improvements to the product. (But ultimately the product owner decides which improvements are implemented.)
Advantages: Separating the customer and the product owner role helps create a product that addresses all the needs selected. It also provides the opportunity to employ professional full-time product owners with the right skills: Product managers, project managers, and business analysts can focus on playing the role effectively.
Challenges: Empowerment of the product owner can be difficult to achieve: Product owners often require the trust and support of senior management to be able to make the necessary decisions, to have the clout to say no, and to create stakeholder alignment. Companies that regard IT largely as a commodity can find it difficult to value product ownership and to invest in developing product owners.
Mix and Match
I recommend that you apply one of the patterns described above to each of your products. To put it differently, a product should either be managed by a customer or by a customer proxy. But there is no reason why you cannot mix and match the two patterns across your portfolio: Choose customer product owners for bespoke products and customer proxies for products that serve several customers.