Differentiating between a Product Owner and Business Owner can be a challenge, as their roles and responsibilities sometimes overlap. Business owners and product owners are two key stakeholders who envision, create and take the product and the business forward. They work together as a team to achieve the goals and projections of the business entity. This article will take you through the difference between product owners and business owners, their similarities, contrasts, and conflicts in their roles and responsibilities.
So, let’s begin!
Overview
What is an Agile Mindset?
Business organizations are owned by business owners, carrying out multiple roles and responsibilities across all departments. The business owner is responsible for the overall management and direction of the business, including making decisions about its operations, finances, marketing, and personnel.
A product owner, in contrast, is not responsible for the entire organization but bears complete responsibility for a product or service created to enhance market reputation or better the balance sheet. In essence, Business Owners and Product Owners are two critical roles that share the responsibility of envisioning, creating, and advancing a product.
Read on to learn all about the difference between product owners and business owners, along with the similarities, contrasts, and conflicts in their roles and responsibilities.
Who is a Product Owner?
A product owner is the head of the product development team and is solely responsible for the final look and feel of the product or service. Product owners must ensure the project’s success by optimizing the product backlog. They guide their team into completing projects within the targeted timelines for their client. A Product Owner Course can acquaint a newly appointed team member with a product owner’s responsibilities and cross-functional roles.
The course gives the aspirant professional training on how to give a virtual shape to the product vision, guides in determining requirements by doing a market analysis using metrics and data, learning effective techniques for managing product backlog, gains knowledge of frameworks and principles like Kanban and Scrum, understanding of criteria that determine how a product can be called a success followed by an awareness of accountabilities of a product owner’s role and responsibility for communication with cross-functional teams and senior management.
Who is a Business Owner?
In everyday language, a Business Owner is the term used for the person who sets up and runs a business. Technically speaking, an individual with this role is called the legal proprietor. Concomitantly he enjoys responsibilities and must execute the duties that accompany the role. In order to gain swift recognition in the market, they leverage their extensive understanding of market dynamics and customer requirements to successfully launch their product from the outset. A business owner also hires employees to oversee various departments.
Another designation that a business owner is mistaken for is a product owner. Undoubtedly, they own the product being created for the business activity, but a designated product owner works at the creative process for the product which a business owner sponsors. To understand product owners vs business owners, their responsibilities must be deeply delved into.
Product Owner vs Business Owner [Head-to-Head Comparision]
| Parameter | Product Owner | Business Owner |
|---|---|---|
| Defining Vision and Strategy | Using experience and skills, the product owner outlines a vision of the product and strategies for its production and launch. | Provides the product manager with business vision and objectives. |
| Focusing on customer needs | Represents the customer before the team. | Presents the viability of the product in relation to the customer and the market. |
| Managing product backlog | It is a to-do list prepared according to the priority order and phase completion. | Is the owner of the product backlog and must approve the order of priority. |
| ROI on investment | Accounts for investment in each phase and the return on it. | Is responsible for complete investment in product creation and long-term return for his organization. |
| Managing issues | Must manage all issues that stall any phase of product creation. | Must consult with the product owner and approve or reject his approach to dealing with an issue. |
| Communication channels | Establish communication lines between the team members and other stakeholders. | It is part of the communication network and gives approval for communication to be available to which member of the stakeholder team. |
| Evaluating product progress | Reviews and evaluates each product | Works with the product. |
Difference Between Product Owner and Business Owner?
Product owner:
- Defines vision and strategy: The product owner describes the final state of the product that serves as a guide for the stakeholders. This includes how the product will work, the target buyers for whom it is being built, and how it will address their needs. This helps make an action plan further broken down to make a developmental strategy.
- Focuses on customer needs: The product owner represents the customer to the development team. They ensure that product strategy and implementation roadmap stay aligned to reach the desired outcomes from the customer’s perspective.
- Manages product backlog: This is a to-do list prepared by the product owner according to the priority of requirements. The list is not static and has to be managed by the product owner as per the demands of the phase completion or iterations.
- Accountable for ROI on investment: Between the business owner and product owner, it is the latter who is responsible for the allocation of the production budget and its optimization. Every bit spent has to be justified with value addition to the product.
- Escalating issues: The product owner must highlight issues that stall product development. These could be budget or time spills or limited availability of resources. They have to involve all the stakeholders to sort out the problem.
- Establishes clear communication lines: The product owner establishes a robust communication system so that all the team members and other stakeholders are in sync with each other. With clear communication, product owners have to ensure that there is no conflict of roles or tension amongst the team members.
- Evaluating product progress: With the completion of each phase or at every iteration, the product owner has to review the result and accept or suggest changes according to the outlined vision and strategy.
Business Owner:
- Provides a business outline: A business plan or outline that defines its goals and objectives. It also chalks out a roadmap for marketing, the financial and operational side of his organization.
- Works with the product owner: Business owners explain their vision of the product to the product owner. They rely on the product owner to handle the execution and completion of the product. The product owner, in tandem with a business analyst, also oversees the market strategy for the product launch. A product owner could also acquire Business Analyst training and work in a dual role.
- Ensures maintenance standards and best practices: A business owner is responsible for maintaining industry standards and regulatory compliances. Best practices are guidelines that ensure business owners do not indulge in malpractices and legal and human rights violations.
- Makes business strategies: A business owner decides how to position their company in the market for a competitive vantage. With this in view, they allocate resources and set up priorities.
- Reviews and approves identified risks and mitigations: A business owner assesses risks to its bottom line before creating a product. Experienced business owners use their past experiences to anticipate what could result from a particular action.
- Controls and prioritizes business requests: All requests for feature enhancement of a product, enhancement of budget, or extension of timelines must be approved by them. Business owners are responsible for prioritizing requests from the development team.
- Reviews and approves communication: All communication that involves stakeholders and the development team is approved by business owners. Both internal as well as external communications lines are directly in his purview. He decides what kind of information will be shared with his board members and the rest of the stakeholders.
- Owns the service/product roadmap: The business owner aligns the product strategy with their business ideology. They map out priorities and allocate budgets and timelines in alignment with envisioned functionalities of the product.
Product Owner vs Business Owner: Roles and Responsibilities?
A product owner and a business owner have the common responsibilities of making and taking a profitable product to market. As such, there may be some ambiguities and overlapping of responsibilities and roles. However, it is the product owner who carries critical responsibilities that include giving precise shape to the vision of the business owner, doing a market analysis, formulating a roadmap based on a due diligence report, deciding on the features of the product, timelines, and allocation of resources, keeping the stakeholders updated on the product progress, managing the product backlog and iterations. They must bear all these responsibilities since they are responsible for the product’s success. Therefore, the role of a product owner is highly critical to a company looking to produce and market products and services. The role and designation of a product owner are often interchangeable with that of a business analyst, depending upon the organizational demands and processes.
On the other hand, the key role and responsibilities of a business owner are not limited to product creation only. They are the owners of the entire organization and, consequently, must look to maximize profits, cash flows, net worth, and income. Their responsibilities include producing results in the stipulated time period with the resources (human and financial) that he has. To that end, they have to see the daily management of the organization, money, sales and marketing, workforce, product and services, and business processes and systems. They also have to rectify anything that is not working in the system that they have established.
Product Owner vs Business Owner: Requirements/Qualifications
A product owner, besides their experience, needs to be well qualified academically. They need to have a bachelor’s degree in computer science, Information Technology, or a related field since this is a technical role. The degree program should have included essentialities like computer engineering, software design, data structures, computer programming languages, and complex mathematics.
A business owner does not need any qualifying degree to start a business. But a field-relevant certification, training, or in-depth knowledge is of tremendous help. Participation in a program for training in marketing, communications, and accounting goes a long way in managing one’s own organization.
Product Owner vs Business Owner: Skills
A product owner needs to be conversant with hard and soft skills to be successful. They need to have Analytical skills, Communication skills, a collaborative mindset, technical skills, and Project management skills. Technical and project management include knowledge and experience of relevant terminology and processes that must be utilized for the execution of his job.
A business owner, on the other hand, has a very demanding task and a lot at stake. They require skills that include financial management, marketing, sales and customer service, negotiation, communication, leadership, project management, planning, troubleshooting, and networking.
Product Owner vs Business Owner: Work Environment
A product owner is generally an IT professional who has to evaluate the work of the development team. Product owners match the features and functionalities to what had been outlined, lead meetings to identify product issues, coordinate with the client to determine adherence to the predefined roadmap and manage daily goals. Therefore, they typically work in an office environment in coherence with other team members.
A business owner’s work environment largely depends upon the industry, product, or service they are involved in. Since they have multiple roles, they could even be working sitting in a club or at a social gathering. Physical locations include retail space, stores, commercial offices, private offices, manufacturing units, and even home offices.
Product Owner vs Business Owner: Salary
Product owners earn a respectable remuneration ranging from INR 8.5 to INR 32.7 lakhs per annum in India and between USD 90,000 and USD 150,000 per annum in the USA, commensurate with experience that should range from 4-14 years.
A business owner in India earns a salary of INR 1 lakh to 25 lakhs with an annual average salary of INR 5 lakh. A business owner in the USA earns between USD 50,000 and USD 500,000 per year, depending upon the experience ranging from 1 year to 20 years, the size, location, and the type of business.
| Designation | Salary in India (p.a) | Salary in the USA (p.a) |
|---|---|---|
| Product Owner | INR 8.5 – INR 32.7 lakhs | $90,000- $150,000 |
| Business Owner | INR 1 lakh – 25 lakhs | $50,000 – $500,000 |
How are Business Owners and Product Owners Similar?
A business owner and a product owner are similar in certain aspects. This is particularly the case with the skill set required to handle their respective roles dexterously. Both roles require excellent communication skills since they need to communicate their vision of the product to the team and other stakeholders.
Additionally, both designations need to manage people and product marketing to fulfill objectives and continually hone their organizational skills to track activities pertaining to business processes and product development.
The roles are interdependent on each other in some ways as well. The business owner takes the help of the product owner to strategize the marketing of the product or service being created. So, their goals become the same. Therefore, both have similar roles and responsibilities largely, except that a product owner reports to the business owner and must manage only the team vis-a-vis product creation, whereas the latter needs to have an eye and grip on everything that goes in and out of the organization.
What Should You Choose Between Being a Business Owner or a Product Owner?
To choose between the two, a person needs to understand the role and responsibilities of the two and do a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of their capabilities and skillset. The decision depends entirely on a person’s capabilities, inclinations, and objectives.
A business owner either raises his business organization or inherits it. To run it, the aspirant can do without a formal academic qualification. To be a product owner, one needs formal technical qualifications and skills, which he might need to be able to map processes or command his development team. Therefore, a person chooses based on the available factors and his personal objectives. Under the circumstances, CSPO training is of great help in clearing perspectives. These are beneficial for both a product owner and a business owner.
Conclusion
The roles of both a business owner vs product owner require a sharp comprehension of market conditions and customer needs. Yet, their area of responsibility is very distinct from each other. A product owner has to unerringly stay focused on developing and maintaining the target product or service while ensuring that it stays market worthy and competitive. In contrast, a business owner navigates the product’s and company’s overall business strategy.
In the current dynamic business environment, it is important that both owners work together seamlessly, targeting long-term success. While the product owner pours insight into market trends and customer needs, the business owner invests strategic vision and resources to keep the business entity alive and kicking robustly. Therefore, either role demands complete comprehension of individual roles and responsibilities. A business can grow, stay competitive and succeed if each can carry out the responsibilities faithfully.