Internal vs External Product Manager: What is the difference?
When I say “Product”, what comes to your mind? Phone? Or shoes? Yes, when we talk about physical products, you’re not wrong to think that phones or shoes are products. But what about “product” in the word “product manager”? Does that mean someone who manages a product like shoes or a phone? Well, that’s not it.
The definition of product in the word “product manager” is a service or feature in a platform that we offer to users to fulfill their needs. So, a Product Manager is someone who manages this product — service/feature to resolve users’ needs or pain points. The “manager” here is not a manager in company hierarchical level, nor have authorities to directly report to the vice president. Product Manager is responsible for developing, maintaining, and improving the product to deliver value and the best experience to the users.
Internal Product Manager
Now that we know about the Product Manager role. How about internal tool Product Manager and external customer-facing Product Manager? These terms are rarely used in job vacancies (so you are less likely to see a job vacancy stating that they are looking for an “Internal” or “External” Product Manager). But you may encounter these terms once you’re in the team.
Internal Product Manager and external Product Manager basically have the same responsible: handling a product to solve customers’ problems. One big thing that differentiates internal and external Product Managers is the end user. For an internal Product Manager, the users are the people who are working in the company, which can be our colleagues or people from other departments in our company. Meanwhile, for an external Product Manager, the users are people outside of the company such as customers, sellers, or other third parties who use our app.
An internal Product Manager is responsible for developing, maintaining, and improving tools used by organization internal users so that the tool can assist their job and help them to deliver values to the company. Some examples of internal tools are Enterprise Resource Planning (ERP), Warehouse Management System (WMS), Human Resource Information System (HRIS), Customer Relationship Management (CRM) and many more. Internal PM has to ensure that the users have the best experience using our product, and in the end help the company to grow and reach their mission.
Beside that, internal PMs also do requirement gathering, translating users’ problems/needs into a solution documented in a Product Requirement Document (PRD), communicating the PRD to our team to make sure that everyone is on the same page, and overseeing the development of the feature/improvement. We also use metrics to track our product’s performance, just like external PMs use metrics to track how their product is performing in the market.
Differences between Internal and External Product Manager
Now that we know that internal and external Product Manager responsibilities are so similar, you might be wondering if there’s any other differences between these roles beside the end user. Well, here are some differences I notice based on my experience as internal Product Manager for the ERP system at Blibli:
Requirement Gathering
As an external Product Manager, requirements from users are coming from many sources. It could come from the customer service team who handles customer complaints, or maybe from data analysts who detect that users may not using the product well, and many more. The requirements might also overlap with each other, which means that those requirements must be summarized and further analyzed to know the root of the requirements and what solution to be implemented.
For an internal Product Manager, most of the requirements come from only one source, which is our user or people in our company. We usually set up a meeting to discuss what improvement we need to make on our side to provide a better experience for them, or they could also reach out directly to us to inform us about the requirements. On the bright side, I could say that requirement gathering as an internal Product Manager is simpler than as an external Product Manager because our users can easily chat with us through our internal chat platform and we can set up a direct call to collect more about their expectations 🤩 But on the other side, since our users are our colleagues, they might be a little more demanding to have their needs prioritized since they know us and well, you can’t really say no to your friends, right? The scenario is somewhat similar to this image below.
Another relatable meme from our user’s side.
Value Delivery
External Product Manager delivers value by solving user’s pain points or user needs and provide better user experience since their users are interacting directly with their product. Meanwhile, internal Product Manager deliver value by enabling people in the company to successfully deliver value to the customer as well as improving the company’s efficiency. Since our product is used by the employees of our company, our friends and family might not be able to try to use our product. You probably will get tons of questions from your friends like “Can I try your product?” and sorry to say this but you must give your best smile to them and explain that your product is used only by the people in your company.
Metrics Analysis
Metrics used by external and internal PM are different. As for external PM, their metrics are customer-driven metrics, such total revenue, growth, retention rate, and customer satisfaction. For internal PM, we don’t choose retention rate as our metric since our user will not stop using our product (it’s an internal tool so they have no choice but to use it). We focus on saving and optimization within the organization. Some key metrics often include reducing costs, optimizing processes, improving security, and enabling internal capabilities that result in customer/revenue growth. For example, when handling the ERP system, I am responsible for measuring the financial month-end closing. For other cases, I use the Net Promoter Score (NPS) to calculate the user satisfaction in quarterly basis which allows us to get total user satisfaction and what we can do to improve their satisfaction.
Conclusion
To sum up, I would say each role has its complexity in handling the product and user. As an external Product Manager, you will be teaming up with a lot of other teams in the company to build your feature. Meanwhile, as an internal Product Manager, you will be teaming up not will all teams in the company, but only with those who impact or are impacted by your internal tools. Don’t hesitate to try landing a career as an internal Product Manager or maybe shifting from external to internal Product Manager!
If you’re interested in applying for a full-time position or intern, Blibli is currently hiring! Send your resume to recruitment@blibli.com and get the chance to work with our PM and UX team and create our own unique stories.
