Why does a project manager need to understand both project lifecycle and product life cycle? Project Life Cycle and Product Life Cycle are two significant concepts that every project manager must know. Although they sound quite similar, they refer to different concepts. But what is the difference between them? Many PMP aspirants ask this question, therefore we decided to write this article to clarify the main differences between these two significant concepts.
Project Life Cycle
Mostly, projects are performed to create a product and once the product is created, the project comes to an end.
Whether you manage a large construction project or a software development project, you follow similar project management processes. The project life cycle consists of sequential and overlapping phases which are specified and documented for the project management needs of the organization.
The Project Life Cycle typically includes five phases:
These phases will vary depending on the industry, the organization or the type of project that is being executed. Monitoring and controlling is a part of every process at different phases. All the phases have different characteristics. Projects of the same organization may implement the same phases according to the organizational needs.
Basically, the initiation phase involves creating the project charter and identifying the project stakeholders.
In the planning phase, the project management plan which creates a roadmap for managing the project is created.
The executing phase involves building the project and performing the project scope.
Monitoring and controlling phase involves tracking project performance and making analysis to understand if the project is on track.
Finally, the closing phase comes up which involves practices to hand over the project to the client.
Project Life Cycle Example
Assume that you have a project to create new software. First, you create the project charter and identify the key project stakeholders. Then develop the project management plan and create the project schedule. After that, the coding phase starts in which you write the codes of the software. At the end, you hand over the software to the client and the project will be closed. This is a simple example of the life cycle of a project.
Product Life Cycle
The product life cycle starts with the inception of the idea and ends when the product is expired. Because most of the time products have a limited life.
The product life cycle consists of sequential and non-overlapping phases which are specified and documented by the project management needs of the organization.
Below are the phases
The development phase starts when the company generates the idea to create the product. This phase also includes the creation of the product.
Once the product is created the introduction phase comes in which the product is introduced to the market.
In the growth phase, potential customers become aware of the product. Therefore sales and revenues begin to increase and profits begin to accrue.
In the maturity phase, sales are at the peak but sales growth slows down. During this phase, the product gains a wide acceptance by the customers. However, profits decrease due to competition and advertisement costs.
The last phase is the decline phase in which growth becomes negative and profits decline. Because the sales amount is not enough to support its production cost.
Depending on the product and market demand duration of product life cycle phases varies. For example, the development phase of a car may take two years. However, the maturity phase may take 50 years.
Not all products follow all five stages. Some products quickly decline right after their introduction. However, there are many products still in their maturity stage such as COCA-COLA.
Generally, The Product Life Cycle phases may involve a number of Project Life Cycles because the product life cycle continues to exist after the project is finished.
For better understanding, let’s review a simple example of the concept.
Product Life Cycle Example
Assume that your company generated an idea to create a software and sell in the market. Then, you completed the coding phase and created the product. First, you introduced this product to the market and started selling. After that sales and profits increased. Depending on the market demand and competition, your growth became negative and profits declined.
Difference Between Project Life Cycle and Product Life Cycle
There are many differences between these two concepts. Below are a few differences between them.
• The Project Life Cycle may involve overlapping phases while The Product Life Cycle involves non-overlapping phases.
• The Product Life Cycle phases may involve many Project Life Cycles
• The Product Life Cycle focuses on the product. On the other hand, The Project Life Cycle focuses on the project.
• The Product Life Cycle depends on market conditions and needs. On the other hand, The Project Life Cycle may or may not depend on market conditions. The project life cycle plans the steps required to complete the project with specific goals.
Different industries, organizations and project types involve different project life cycles. On the other hand, The Product Life Cycle focuses on the product and does not change based on the product type. Although they refer to different concepts, they are related to each other.
Understanding each concept and having knowledge about their use will help the project management practitioners to integrate both into their business processes with maximum effectiveness. Note that this is a significant concept for the PMP Certification Exam.