This post is an excerpt from the Moving from Project to Product white paper by Ross Clanton, Carmen DeArdo, Mik Kersten, Alan Nance, Karen Person, and Jason Zubric. You can read the full white paper here.
Business and IT leaders must take a proactive approach to understanding the negative internal forces that are interfering with their ability to react to disruptions.
To help leaders understand the negative internal forces, this post outlines the five most common problems that organizations are facing.
Problem 1: IT Is Disconnected from the Business and the Vision
The relationship between IT and the business is often a customer-centric view, meaning that IT views the business as a customer and that neither side views the other as a partner. The fact that IT professionals typically refer to their business partners as “The Business” is a simple example of this.
This relationship fosters a feeling of taking orders or just delivering what was asked for instead of being a trusted advisor and working through the value proposition together. “The customer is always right” never works in the context of building business value. In many cases, IT lacks a clear definition or understanding of the customer, whether internal or external.
In the project (scope) style of delivery, the business gathers a large list of requirements for IT to execute. IT returns an estimate of what it will cost to implement the requirements. The business responds with what they are willing to spend.
This paradigm of delivery often leaves IT disconnected from the true purpose of the business vision and wondering why they are working on specific requirements instead of focusing on delivering the value.
Problem 2: Business Feels that IT is Solving Its Own Problems Not Delivering More Value
Not unlike the previous internal force, this negative force is the business leaders’ perception that IT is just solving their own internal problems, not delivering value to the business.
This directly contributes to IT being perceived as a cost center as opposed to a profit center.
If the business sees the work being delivered by IT as directly related to the bottom line, not just in cost but also in value to the customer, IT will start to become a trusted partner, not just the technology problem solver.
Problem 3: Leadership is Tracking the Activities Not the Results
Due to the historically negative results from project-based delivery, there has been an increasing lack of trust between the business and the project development teams. This has caused project managers in IT departments to focus on processes that track and report on project activities to ensure that costs are kept in check and that conflicts and risks can be reported to executives.
However, the activities of project delivery often do not create a clear representation of the outcome of those activities.
By tracking the outcome or results of the project instead of the activities, a true representation of the entire value stream is visible, not just the technology deliverables.
This concept is key to the migration from project to product. Product-based teams build and measure outcomes; they don’t focus on the activities of the delivery process. Those outcomes drive refinement of processes to increase the value of the outcomes.
Problem 4: Project Funding is Fundamentally Broken
The recurring theme of each of these negative internal factors is that project-based delivery is inherently broken, and at the core of project-based delivery is the funding model.
Because funding projects (scope) takes all the requirements the business is asking for and then estimates by delivery organizations, the value of those requirements is lost within the concern over delivery of those requirements. The mantra “on time, on scope, on budget” resonates throughout every traditional project management office, so breaking away from the traditional project model means changing our financial focus to value outcome over being on budget.
In a product-funded model, the business has a budget for product development or enhancement. Feature requests are entered into a backlog and prioritized by the product owner based on value. This assures that the most value will be delivered for any given budget.
Problem 5: IT Feels Like a Black Box to the Business
Nearly every organization struggles with the communication of IT delivery processes to their business counterparts. This communication typically takes the shape of status reports or status meetings to help the business understand the complications of a project’s current state.
The formulation of these reports and statuses are IT’s attempt to pull the business closer to their work and build the partnership that is inherently missing.
The business leaders, on the other hand, often struggle with this style of communication because the issues IT delivery teams face are typically issues around the team’s struggles to deliver due to scope, time, or budget, not a message about the impact to the business outcomes.
As hard as organizations try to create alignment with the business in the project-based approach to delivery, the difficulty is creating the right level of visibility and then presenting the visibility in a consumable manner that both the business and IT can relate to.
Data-backed visibility and transparency will help to instill the trust needed for a true partnership between IT and the business.
All these negative forces are feelings and realities that have been persistent hurdles to achieving a nimble, proactive organization capable of not only combatting disruption but also being the disruptor in a given industry.
Continue reading the Moving from Project to Product white paper here.