What are core financial planning areas for product managers ?
- Product Managers at some point in their career, have to carry out the following
- Create Business Cases for product investments
- Assemble forecasts
- Test planning assumptions (sensitivity analysis)
- Derive product cost models
- Establish pricing models
- Prepare product budgets
- Each of the above activities is critical to setting up the business of the product so that its results can be tracked and compared against those plans.
- Such tracking must be done with a reasonable level of flexibility to allow for real world situations to flexibly adapt to the plan
Having such predefined and planned financial areas will ensure that all product activities – expenses and revenue are timed, planned and forecasted to some degree for tracking. Also it ensures All underlying assumptions are listed out, evaluated and well accommodated in these plans as strengths, opportunities, weakness and threats along with appropriate risk coverage. In the event, such assumptions change – plans must be revised briefly to project the new course ahead.
Source: Haines, S. (n.d.). The Product Manager’s Desk Reference.