Thanks Yogesh for putting on paper a topic which is not spoken of much in PM circles. At least I have not seen much spoken or written about it in my 14 years in PM. What I have seen at tech companies I worked at is that these so-called internal products or services are, more often than not, treated as second class citizens when compared with their external facing or revenue generating counterparts. I am sure most PMs reading your article will identify with this theme and it will resonate with them. I agree it is important to clearly communicate the value delivered by internal products. However, is mapping output metrics for internal products to business metrics the only way to quantify and communicate the business value of internal products? I’m not sure. Here are reasons why I think that approach may not always be the best fit to achieve the above goal :

Correlating internal product metrics with business metrics can be tricky. For e.g number of employees engaging with the analytics dashboard may or may not correlate with a business metric like increased customer engagement or retention. Even if and when it does correlate it may be tough to prove that it is causation and not just correlation.

Such a mapping exercise between internal product metrics and business metrics has the potential to be seen as self-selection or a forced exercise to tie product metrics to business outcomes

Internal products sometimes have their own goals that may be independent of business metrics, or in some cases even independent of business outcomes. For e.g a product meant to serve or augment a company’s CSR initiatives.

I think another approach to highlighting and communicating the value of internal products could be to show a direct tie between the outputs from internal products and the company mission or quarterly OKRs or the top 5 senior leadership goals. In other words tie the product’s output to high level objectives that the company uses to communicate the company’s north star and goals to employees. The litmus test for the value delivered by the internal product would then be to check whether the output ladders up to one of the company goals or OKRs. In case of the example in # 3 above the objective might be something like “Demonstrate leadership and be a steward in Corporate citizenship”. A supporting metric for that might then be something like won CSR award or ranked # 2 in CSR survey.

Thanks Yogesh for your content and your work on PM Nirvana. I think it inspires deepening of best practices in Product Management and fosters collaboration and growth in the PM community.

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Thank you for reading the post, and articulating such a thoughtful conversation.

I agree with you that mapping the internal product's metric to business outcomes is often not feasible, and even harder in a more direct fashion. And hence I liked your idea of baking key metrics into the company level OKRs (like developers love to code).

I would still highlight the importance of a periodic mapping exercise to reinstate why we have this OKR (leadership change and they question why), knowing that the maps are dotted, and correlational than causation. Hope that helps.

Thanks again

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