Digital Product or Digital Project: What’s the Difference?

We’ve talked about developing a digital product mindset as a way to further your business’s digital transformation, respond to evolving consumer needs and expectations, and stand out among competitors in your industry. But what is the difference between a digital product and a digital project?

Your company may initiate a digital project or decide to create a digital product. While these two concepts feel similar, they are not the same. To help explain what sets them apart, we’re diving into the key differences — and how they require different mindsets.


What’s the difference between a digital product and a digital project?

Digital products are tools that offer value to your customers and your company. They improve the user experience and make it easier for customers to find what they need and make a purchase decision. Digital product innovation can contribute to repeat purchases, generate valuable customer data, and drive revenue growth.

Digital projects are shorter term activities with clear objectives for achieving a specific, known output.

While these are more general definitions, there are a few key differences:

Life Cycle

First, a digital project has a short life cycle. Most projects are considered complete once a new update or release is available. Digital products can and should exist for much longer. In order to continue delivering high-quality experiences, businesses will incorporate feedback and data back into products so they evolve and improve over time.

Success Measurement

Digital projects are considered successful if they are launched on time, within budget, and meet the original goals. In contrast, digital product success is mainly evaluated based on how well it delivered on the intended outcome – that is, whether it provides value to your business.

A tricky distinction: You may work on a digital project with the goal of releasing a new version of a product — but the project is confined to that one specific product release, not the initial development or ongoing evolution of the product.


Why is it important to distinguish the two?

While both digital products and digital projects help further your digital transformation, they require a different mindset. To be successful, companies can’t rely on using the same approach for both.

Digital products deliver value to your customers and your business. A digital product mindset requires you to take on a customer-centric approach: What will truly answer a need and provide value? This mindset focuses on benefits and user experience, rather than product features.

While digital products aim to solve a problem or need, they don’t necessarily have a defined objective or deliverable. The final outcome grows out of a process of discovery and innovation

In order to foster a culture of innovation, different teams within the organization will have to collaborate on a digital product. With a shared vision and strategy, team members each provide their unique skills and viewpoints to contribute to the design, development, launch, marketing, and optimization of the digital product.

On the other hand, a digital project has a clear objective, process, and output. From the start, everyone knows what they need to do, when it will all happen, and what the end result will look like. While there is room for innovation within the bounds of the project, each team member involved understands the steps they’re responsible for completing and the result they’re working to achieve.


How does the timeline differ?

The timeline for a digital product or digital project will depend on the specific project or project, and it can vary based on the industry. 

A digital project has a fixed timeline with clear steps and milestones. The length of a project’s timeline will depend on the expected output, but it does have an end date and a set point at which to measure ROI.

A digital product itself has no timeline; once launched it exists and needs to be monitored, maintained, and enhanced. The process is iterative, involving a cycle of constant feedback and improvement. This means that while a timeline to launch or to enhance may be specific, the overall life cycle itself needs to be more open or flexible and its milestones or expected outcomes are not as specific. 

In the case of a digital project, the time to develop and launch a minimum viable product (MVP) can move fairly quickly, but its incremental updates often extend the overall length of the timeline. For this reason, in some cases, it may take longer for a digital product to get to the point of measuring success, compared to a digital project. That being said, it’s possible to see a return on investment (ROI) along the way. 

While both can be agile, a digital project will be agile within the set bounds of its objective and process, while a digital product may be more open to innovation and require more adapting.

As your organization works to execute on your 2023 strategy, consider how digital product development and specific digital projects can support your business goals and improve your customer experience.

If you’re ready to launch a digital product or digital project, we can offer our expertise and support. Contact a digital transformation team member, or download our “B2B Guide to Digital Product Development” white paper.

Joe Harouni
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Joe Harouni

Joe is passionate about planning and delivering Commerce solutions that enable a better customer, sales and service experience for his clients. With over two decades of web and app-based solution experience and dozens of launches across multiple platforms and industries, Joe brings an experienced and practical perspective to any objective.

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