How to Effectively Transition to Product-Based IT

How to Effectively Transition to Product-Based IT

​IT project management has been a characteristic of business success for years, helping companies drive many of their biggest and most crucial initiatives. However, many organizations have come to believe that traditional IT project management is generally insufficient for reaching today’s software-development goals.

More and more enterprises are shifting from project-based IT to product-based delivery. In fact, more than half of organizations (55%) surveyed by Gartner say they’re moving from project to product delivery as a way to continuously integrate and deliver new features and capabilities to the business. These organizations are making the shift by defining new architecture tools (39%), investing in DevOps software development methodologies (35%), and hiring workers with new skills (32%), to name a few. 

In addition, product management pushes enterprises to base success on their offerings’ value to the customer versus milestones reached during product creation. The approach incorporates methodologies, such as Agile and DevOps, to be more responsive to user feedback and changing market dynamics. Simply put, product-based delivery relies on agility and mid-course adjustment rather than attaching all budgeting and staffing decisions to an initial project plan.

However, the path from project-based IT to product-centric delivery does come with challenges. To achieve success, companies must transform their cultures and mindsets in several ways.

A Cultural Change, Not a Process Change

Cultural change is difficult, but it’s a fundamental factor in successfully adopting a product-based delivery model. At its core, it means that companies must shift their perspective, moving from planning the delivery of a project to collaborating on the creation of a product.

Leaders must focus on what matters at the end of the day—the customer. Companies that choose to shift to product-based delivery will measure success by delivering what customers need by maintaining happy and satisfied customers, not adherence to a plan. If this mindset isn’t adopted, then transformation will result in new practices being measured against old yardsticks.

Measuring Outcomes, Not Output

How and what an organization measures will essentially determine its culture. In a project-based culture, the effort is put into getting things right, efficiency, and meeting deadlines. However, what’s missing from those efforts is questioning if what the company is working toward is actually bringing value to the customer. The emphasis is on measuring and monitoring efforts, rather than assessing whether the company is achieving its goals. 

Enterprises that have successfully achieved agile transformation realized that efforts to “manage” projects led to erroneous results and needed to change from focusing on effort, to a focus on value. Also, tracking activities and budgets can provide a false sense of security that emerges only after the product hits the market.

Creating a “Failure Is Ok” Culture

Take a cue from small businesses. These companies are agile from the start because they need to be in order to succeed. Failure, learning, adapting, evolving, and reflecting are necessary. They’ve learned to fail fast. But, as companies become larger and more established, they often create a culture where failure goes from being a good thing to a bad thing. Development teams in many enterprises continue to have a fear of being punished for failure.

However, those sentiments conflict with the agile and product-based delivery principles of fast experiments and continuous exploration. Moreover, a fear-of-failure culture often leads to people hiding their failures. That means there’s little a company can do to fix or improve what they don’t know about.

To successfully transform, organizations must avoid punishing failure and instead publicly reward and/or celebrate failures to encourage others to expose failures. Doing so allows leaders to identify patterns of failures and develop new ideas to improve how the business operates.

One of the most effective ways to quickly embrace a “failure is ok” culture is for leaders to change first, and as visibly as possible. When leaders demonstrate vulnerability, they gain the trust of others. Willingness to admit flaws and accept responsibility for mistakes not only builds a culture of trust, but goes a long way in building credibility.

Gain Alignment and Buy-In

Securing stakeholder buy-in and that of all teams is one of the most difficult aspects of moving from a project-based model to a product-focused delivery. While leadership often initiates the transformation, it requires broad organizational support at all levels.

For example, many agile transformation leaders face challenges in gaining buy-in and alignment from finance, which may resist moving from a functional funding model to a product/agile model. Meanwhile, this is one of the first key steps in the transition. Finance leaders traditionally control the purse strings, requiring a thorough business case, multiple phases of approval, and a direct link between the allocated budget and a specific output. However, that approach can hinder agile teams and the returns they can deliver.

Instead, enterprises must distribute their resources to those innovations that have the potential for the highest returns and, therefore, need to provide agile teams with the financial independence to pivot quickly to new and better ideas. To help finance leaders and other stakeholders make this transition, agile leaders should deliver real data on investment performance—reporting both the value generated and the cost incurred by the team—so they can make educated decisions about future funding allocations.

Gaining buy-in from teams can also be challenging, particularly when top management introduces agile. Developers, quality assurance workers, technical writers, engineers, and other professionals will often challenge the adoption. Effective and frequent communication is the key to engaging product teams. Provide ongoing information about the principles and values to help product teams understand why the agile discipline approach is necessary and how it can ultimately benefit them. Measuring team success by those who are willing to grow and learn helps to empower teams to make decisions for themselves and create a continuous improvement culture.

Time for a Change?

Moving to a product delivery model allows companies to focus on developing IT products that satisfy and engage users and produce optimal business outcomes rather than staying mired in traditional project-oriented success metrics. If an enterprise is trying to uncover areas of improvement and how they should measure success, agile transformation may be the answer. However, if the organization is adopting agile because it wants to change its processes but is unwilling to change the culture, the transformation will likely fail. 

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