2024 Strategic Roadmap for CIOs to Deliver Digital Products and Services

The Evolution of IT: From Projects to Products

With the pace of change accelerating and digital leaders increasingly outperforming their peers, few leaders debate the value that digital technologies can bring. However, many still struggle to deliver their full potential and drive business impact.

By reframing IT work as digital products and services, organisations can maximise the value delivered and become more strategic business partners.

We believe that the Gartner ® report ‘2024 Strategic Roadmap for CIOs to Deliver Digital Products and Services’ explores the need for organisations to adopt a product model to improve technology’s agility, customer-centricity, strategic impact and stay relevant in today’s world.¹

The move to product

Historically, IT delivery has been project-centric, focusing on delivering specific features or functionalities within a defined timeframe. As the digital landscape evolves and customer expectations rise, this traditional approach is becoming outdated.

• Low efficiency and trust. Project plans are frequently refactored as priorities change and lessons are learnt. The business often views these changes as unreliable delivery, eroding team trust.
• Siloed teams. These create an ‘us and them’ mentality, hindering collaboration and driving a disconnect between technology and the business.
• Unclear impact or value. Projects focused on delivering features cannot effectively demonstrate the business impact delivered.
  Disconnected customer experiences. Siloed development leads to disconnected technologies and fragmented user experiences.
• Low adoption. Project teams often don’t feel accountable for the adoption of tools they create, instead handing over digital tools to BAU without focusing on what is required.

So, how does a product-led approach help address these challenges?

A product mindset is focused on closely integrating the business and IT together, focusing on customer needs and business impact while utilising agile practices to deliver value for the business rapidly.

Several key factors make the difference in this.

• Customer-centricity. Product management must be deeply rooted in understanding and meeting customer needs internally and externally, delivering important features.
• Value over features. By always focusing on value and outcomes over features, teams can quickly drive a larger and more measurable impact.
• Adaptability. Product management, with its iterative approach, is key for allowing greater learning and flexibility throughout the digital delivery process
• Cross-functional technology and business teams. Building effective product teams requires bringing together individuals with diverse skills and expertise, including technology, business and design. The Gartner report highlights how these “fusion teams” foster collaboration, encourage innovation and drive actual impact.¹

What do organisations need to consider?

To deliver a product approach effectively, organisations must design an operating model that works for them, transforming their model and empowering their teams. Several key elements need to be considered:

• Build real partnerships. Technology and the organisation must operate as ‘one team’, with buy-in and leadership support from both teams.
• Develop a product operating model. Getting the operating model right is key. Organising product teams around clear business outcomes, aligning work tasks to these dedicated product teams, and leaving learning, development and standards to other functions means that everyone in the team is working towards the same goal and don’t have conflicting priorities.
• Make the discovery process clear. Gartner emphasises that a solid and clear discovery process, putting the customer at the centre of the design, is essential in ensuring that all features add value and meet the customer’s needs.¹ This involves continuous customer engagement, using digital design techniques to understand their needs and preferences, and incorporating feedback throughout the product lifecycle.
• End-to-end ownership. Shifting from products’ transitory nature to accountability for the full lifecycle enables teams to deliver value from start to finish instead of ‘handing over’ to BAU to deal with.
• Empower teams and use adaptive governance. The Gartner report talks about a shift from traditional command-and-control governance to more adaptive models that empower product teams to make decisions and prioritise work based on customer value and business outcomes.1 The structures also allow for flexibility and autonomy, enabling and supporting team innovation while removing layers of approvals and bureaucracy.
• Enable continuous improvement. Product management is an ongoing process of learning and adaptation. The Gartner report stresses the importance of continuously evaluating product performance, gathering customer feedback and iterating on products and services to improve their value and relevance over time.¹
• Funding is important. New adaptive funding approaches should be taken, funding the whole product for a period – not just new features. The product teams need to take a new approach to transparency, demonstrating impact on key business metrics.

By focusing on these key elements, organisations can effectively implement product management and reap the benefits of increased agility, customer centricity and strategic alignment.

The adoption of a product-led approach is accelerating

Whether you’re working at a bank, retailer, consumer goods or any modern organisation, the ability to deliver impactful digital products at speed is key for business success.

Leading organisations are already reaping the benefits:

“The top 20% most effective organisations are 3.2 times more likely to use product teams that are measured on business outcomes than those who do not.”1

Plus, the adoption of this model is accelerating:

“Already, 30% of strategic portfolio management leaders, both inside and outside of IT, use product-centric delivery models for more than three-quarters of their organisation’s work, and 49% use it for more than half of their work.”

However, organisations are struggling to shift from their legacy models

Significant numbers of agile transformations struggle to show the value they add to the organisation. Businesses have spent a lot on moving to agile ways of working and hiring product teams, but have yet to demonstrate clear benefits.

Why? Without broader transformation, product managers have become pseudo-project managers. The wider organisation has not evolved, new product managers have come from project manager or business analyst backgrounds and haven’t changed their way of thinking, teams remain restrained by overbearing governance and are reluctant to focus on outcomes over outputs, and the pressure for features to hit a deadline has not changed.

So, what can companies do?

Get started at speed

While transitioning to a product-centric approach may require initial effort, the long-term rewards are substantial. By prioritising customer needs, empowering product teams, and embracing data-driven decision-making, leaders can position their organisations for future competitive advantage.
Getting started does not require reinventing your entire model in one go. By picking a pilot and starting at speed, you can quickly begin to see the impact and bring the rest of the organisation on the journey with you.