Projects vs. Products — The transformation from project development to agile product development.

David Theil
11 min readFeb 20, 2022

Why do managers prefer project development over agile product development and why they are wrong to do so?

There are many ways in which companies organize themselves. As different as the business models of these companies are, so are their organizational structures and processes. Many companies fall into one of two categories:

  • Companies with project development
  • Companies with product development

The larger a company is, the more it tends to organize itself into different departments along functions (such as: Design, Marketing, Operations, Development, …). This leads to inflexibility of the system and can threaten the existence of the company if changes in the market are not recognized and the company does not react to these changes quickly enough. This is why many companies try to transform themselves back into product development companies. However, this transformation often fails.
This article looks at the differences between project development and product development, considers the advantages and disadvantages of the two forms of development organizations, and examines the issue from a management perspective.

Transformation [Source]

Differences of project development vs. product development [1]

What is the delivery?
Project development
is about delivering a pre-defined scope at the end of the project.
Product development, on the other hand, strives for continuous delivery of proven value.

When is the value delivered?
In project development, the exact scope of the project is planned, estimated, and contracted at the beginning of a planning phase. Only at the end of the project or at defined milestones is the project completed and the results handed over.
In modern agile product development, the value to the user/customer is delivered continuously. The team usually implements…