Negotiating for Funding
Effective negotiation for funding requires strategic planning, trust and confidence. This is important in product management for launching and sustaining a product within the financial constraints of an organization.
Product Owners should consider scenarios where they may need to negotiate for funding like when they need to increase capacity, add or improve tooling, or get support for research and experimentation. The following suggestions are ways you can prepare:
Co-create and Review Roadmap with Stakeholders. Product Owners convert a product vision into reality in the pursuit of value for the customer and organization. To deliver this product vision, they generally co-create a roadmap with stakeholders as a practice. A well-structured roadmap shows the most important strategic and Product Goals. It is a narrative that connects a product’s evolution to customer and business outcomes and shows where investments will deliver the most impact which typically gives an indication to budget discussions.
Connect budget and investment negotiations with a Product Roadmap or Product Portfolio Roadmap. Discussions around a roadmap might include answering the following questions:
- Which feature (or product) should we invest in, and why?
- Where are potential improvements in a product?
- What innovative and new opportunities are there to pursue?
- How will funding support value delivery included in our roadmap? Should any validation of our assumptions be included in a budget?
Base Discussions on Data and Evidence. For Product Owners, the challenge is to translate a product roadmap into investments and explain to stakeholders why funding a product is necessary. Budget and investment negotiations should be discussed based on data like product metrics, external market data, trends, and forecasts. However, just knowing this data is not enough. You must share and communicate this information in order to be transparent and clear when negotiating.
Consider Alternate Scenarios. Because some budget negotiations might include investment discussions (where cost versus benefit is reviewed), Product Owners might also find it helpful to have alternative scenarios. In other words, have a “Plan B” and a “Plan C” ready. Also, expect that you may be asked to further validate assumptions.
Remind Stakeholders of the Product Vision. While negotiating with stakeholders, Product Owners should refer to a product vision and strategy as well as the overall organizational business strategy and long-term vision. In addition, stakeholders should have a clear understanding of how their investments might influence product outcomes and business value.
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