Enterprise organisations traditionally favour the project-led corporate IT model. With logical and structured processes, it seeks to maximise certainty and predictability for the business. But the trouble is, we live in a chaotic, volatile world where nothing is certain or predictable.
This is compounded in the digital economy, where power has shifted from suppliers to buyers with everchanging demands.
Today, the ability to pivot and adapt business offerings to give customers what they need, when they need it is the cornerstone of success. That means understanding where and how to deliver value, then ensuring it happens quickly. IT has a vital role to play here, helping the business ride the chaos instead of trying to control it. Unfortunately, conventional project-led IT isn’t set up to do that.
From projects to products
It’s no secret that the IT systems of many enterprise organisations struggle to cope with the pace of change required today. They’re often rooted in technologies from the turn of the millennium, pre-dating cloud computing and smartphones. They follow traditional, linear models with siloed departments. And projects are planned and budgeted for on an annual basis, giving limited room to accommodate evolving requirements.
All of this means progress is slow and change is hard. Conflicts, constraints and bureaucracy are rife, and by the time a new idea makes it to market it’s more likely to be a commodity than a differentiator. Too often, IT hinders progress instead of supporting it.
Switching to a product-centric model can turn this situation around. Order and discipline are maintained, but there is more flexibility and room to manoeuvre. Most importantly, time, effort and resource are focused on one shared goal: delivering value to the customer.
Five benefits of product-centric IT
Product-centric software development and delivery is linked to five key factors which help the enterprise thrive in a changeable environment.
1. Cohesion and collaboration
The formation of long-lived, multiskilled teams is a core aspect of the product-centric model. Instead of working in disparate units, developers and operations staff work together. They have collective responsibility for product performance, value delivery and customer satisfaction. And they work autonomously, making their own decisions instead of passing them up or downstream.
This fosters a strong team spirit where people work proactively and collaboratively to make iterative product improvements, instead of assuming it’s someone else’s job.
2. Outcome focused
In a product team, everything is focused on the core goal of delighting the customer.
Agile principles are adopted to enable rapid delivery of product improvements based on evolving customer needs. The scope of work is dynamic, determined by customer feedback. Success is measured in terms of customer outcomes, rather than business outputs. And because changes are small and incremental, risk is greatly reduced. All these factors combine to power a virtuous cycle of value creation, closely aligned with the customer.
3. Simplicity and speed
The product model involves simpler, shorter processes. Because teams are small, management complexity and coordination time are reduced. Processes are streamlined. Dependencies and handovers are kept to a minimum.
Embedding Lean principles, such as elimination of waste, clears the way for more rapid development and progression of ideas. When time to market is a critical success factor, this is a significant competitive advantage.
4. Smarter budgeting
With traditional IT models, funds are often split 30/70 for ‘change’ (projects) and ‘run’ (support, maintenance, recurring spend) activity. This reinforces divisions between Dev and Ops, and budgets are set in stone for 12 months, so it’s hard to respond to emerging factors.
Conversely, a product-centric approach can dovetail with Beyond Budgeting principles allowing resources to be distributed as needed, rather than via annual allocations. This makes it easier to respond dynamically to business rhythms and external events, instead of being tied to the calendar.
5. Stability and innovation
There’s a common misconception that software innovation and system stability are mutually exclusive. This doesn’t have to be the case. In fact, with the product-centric model stability and innovation are two sides of the same coin.
Developers are less likely to pass on brittle code when they’re working alongside the operations colleagues who will deal with the consequences. Similarly, operations staff are more inclined to facilitate change and innovation when they can see how it drives value and works towards target outcomes.
Switching from projects to products requires significant adjustments to the way work is handled and financed. But each of these changes plays a part in the enhancement of customer-focused value delivery. Over time, this makes the business inherently adaptive and responsive to changeable needs, instead of ignoring the chaotic reality of the outside world.
Read more about optimising teams for the digital economy in our whitepaper Organisation: doing what matters. It’s part of our Adaptive IT Framework covering the interconnected factors that underpin digital transformation success.