The High Stakes of Physical Product Development Compared to Digital Products & How to Manage Risk

Posted by Maziar Adl
Maziar Adl
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Manage-Product-RiskWhen we imagine the process involved in creating a product, most of us imagine making something with our hands. We might also think of large-scale factories with assembly lines made famous by Ford vehicle manufacturing plants. Today, we've moved beyond having only physical products. We also have an entire industry of digital products and software that we never physically hold in our hands, but we interact with using devices and the internet. 


No matter what type of product is being produced, a large-scale process requires a manager to oversee the goods from the ideation stage to the launch stage. This process can be an incredibly complex, long-term process with tremendous rewards. Similar to an artist seeing their work on display in someone's home or a football coach witnessing his team win an important game, the product manager feels intense satisfaction and pride when their teams deliver a successful product into the real world. 


If you're a product development manager, you know that seeing your product in the hands of customers and on the shelves in stores results from months and years of careful planning, coordination, and communication with various teams, supervisors, and stakeholders. While digital and physical products have similar development processes, there are some critical differences between the two. Development managers of digital products may relate to development managers of physical products over the challenges of communication and team coordination. However, some factors make the stakes for physical product creation much higher. Let's look at those key differences and how using a powerful product management tool can be game-changing. 


Managing Timelines

One of the major differences between physical products and digital products is the timeline it takes for development. It takes time to turn an idea or a design into an actual product, whether it's digital or physical. The first step is to draw up a proposal and present it to the decision-makers within a company. Next, the development phase begins, where plans are created to determine the resources needed and timelines are mapped out. 


With a digital product, the scope of turning the idea into reality might take a few months to a year or two to complete. It depends on whether the product is launching from scratch or if it's a revised version of an older product. On the other side of the coin, physical product development usually involves more moving pieces that stretch a physical development timeline into several years before the product can be in the hands of the customer. 


This variance in timelines is why digital product managers often have their pick of software and digital tools. A year-long management plan is easier to track. Meanwhile, managers of physical products are often underserved because they require robust tools that facilitate multi-year project planning and collaboration capabilities between many stakeholders. 


Introducing New Features

When a digital product introduces a new feature, it requires planning and strategy to implement the plan. Depending on the scope of the feature, the process could take a few weeks or several months. With physical products, integrating new features takes a great deal of planning and coordination. Adding a new component might require removing something else or changing available options in the existing product. For example, if a new color is introduced, other colors of the product may be phased out of production to allow for the new selection. 


The physical product affects the manufacturing, the production timeline, the marketing, and distribution, as well as the existing inventory in stores or retailers. The product development manager must account for each little detail. The right software can make this process much more manageable. 



Marketing is easier when it can be streamlined and replicated for future product launches or new feature promotions. Both digital products and physical products take advantage of online marketing. Due to the speed at which digital products are created, they tend to lean on the digital advertising space more than physical advertising. The bigger the company and budget, the more money is available for physical marketing campaigns, such as: 


  • Magazine ads
  • Billboards
  • Transit signage
  • Television ads
  • Radio commercials
  • Podcast promotions


The most significant difference between a physical product and a digital product is that physical products strategize a marketing plan over a more extended period because planning a physical product is often years in the making. This longer time means there are more opportunities for mistakes. 


With either type of product, last-minute complications can cause a launch to delay or, in the worst-case scenario, be cancelled. The budget dollars at stake for marketing can be significant. 


Team Coordination

An exceptional manager coordinates and communicates effectively with the stakeholders involved in their project. All product managers must work with an array of teams focused on particular aspects of the product. There is much overlap between the groups involved in both digital and physical product development:

  • Designers 
  • Engineers
  • Developers 
  • Manufacturers
  • Assemblers
  • Photographers
  • Marketers
  • Launch Team

Physical products involve additional steps that don't apply to digital products. For example, each component of an electronic device might be manufactured in a different location or even country. These parts would include the following:

  • Batteries
  • Hard drive
  • Shell
  • Screen
  • Accessories


Once the parts are manufactured, they are shipped to a common location for assembly, testing, packaging, and distribution. 


Failures in communication can result in expensive damage control for companies that produce physical products. Even delays in features, such as a shortage of available batteries, can disrupt the production of a product and cause an expensive chain reaction unless the manager acts quickly to mitigate the effects. 


Management Tools

Product management requires tools that help the managers accurately track their progress and coordinate communication with their teams. Most product management tools on the market are best suited for production timelines that span a year or two. This means they are ideal for products that wrap up in short periods and with small to medium-sized teams. 


What has been lacking in the market is a tool that supports entire portfolios of products and production timelines that span five, ten, and even fifteen years of planning. If you're a physical product manager, imagine having an easy-to-use dashboard where you can track the progress of all the products in your portfolio. Now imagine you can focus on certain KPIs, track real-time data, and share this information in presentations with executives? We created Gocious to provide all that and more because we know how hard it is to balance everything using office programs and spreadsheets. 


Product Management Tools That Make Life Easier

While software cannot make the job of a product manager simple, it can help make the workload easier to manage. Passionate leaders that support their product managers with their time, insight, and resources are what companies need for long-term sustained success. If you have a product manager in your company making do with limited tools, set them up for success with Gocious. Book a free demo to see why Gocious is quickly becoming the top Product Roadmap Management tool for physical product development. 

Topics: Product Development

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