Internal Tools Are Not ‘Less Risky,’ Argues Product Expert Melissa Perri

In a recent LinkedIn post, product management expert Melissa Perri challenges a common misconception within organizations: that internal-facing tools carry less risk and thus require less rigorous product management than customer-facing products. Perri argues this perspective is fundamentally flawed and detrimental to overall business success.

Many companies operate under the assumption that internal tools are a lower priority, often stating, “It’s just an internal product, we don’t need the full PM process.” Perri highlights that this thinking is a dangerous oversimplification. She points out the direct and often significant impact these internal systems have on the customer experience.

“Internal products directly shape what your customers experience.”

Perri provides several compelling examples to illustrate her point. She explains how an insurance company’s claim-denial algorithm, while not directly seen by the customer, dictates whether a policyholder receives a payout. Similarly, a bank teller’s inefficient interface can lead to customer frustration and longer wait times, directly impacting customer satisfaction. In the logistics sector, internal routing software influences delivery schedules that customers actively monitor.

The False Hierarchy of Internal vs. External Products

According to Melissa Perri, the perceived distinction between “inbound” (internal) and “outbound” (customer-facing) work creates a false hierarchy. This often leads to internal products being treated as second-tier initiatives. She notes that organizations frequently assign less experienced product managers to these roles, bypass crucial discovery phases, and deprioritize strategic planning for internal tools.

“Value streams don’t stop at your company’s walls. They flow through internal systems before reaching customers.”

This approach, Perri argues, undermines the potential quality and effectiveness of these critical systems. The downstream effects of poorly managed internal tools can be substantial, leading to inefficiencies, increased costs, and ultimately, a degraded customer experience.

The Need for Strategic Product Management for All Tools

Perri emphasizes that the core principles of good product management—strategy, discovery, and delivery—are just as vital for internal tools as they are for customer-facing products. Even organizations that primarily or exclusively develop internal tools need a robust Product Operating Model to ensure these products are built and managed effectively.

“Internal product managers need the same fundamentals: strategy, discovery, delivery.”

She advocates for a shift in perspective, urging businesses to recognize internal products not as afterthoughts but as strategic assets that are integral to the entire value stream. By applying rigorous product management practices across the board, companies can improve internal operations, enhance employee productivity, and indirectly but significantly boost customer satisfaction.

Melissa Perri concludes by posing a critical question to her audience: “How does your company treat internal product work? Is it strategic, or still second-tier?” This prompt encourages reflection on current practices and highlights the need for a more integrated and strategic approach to product management, regardless of the end-user.