Who’s succeeding with product-focused IT?

Many CIOs are facing the most challenging undertaking of their careers: shifting their IT organization’s focus from projects to products.

it as a product box package hand with product technology nodes primary
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Organizations are making the shift to delivering IT as a product — a multistep process, rife with challenges. First, there’s the need to lay the groundwork for change, and to extend a product mindset across the organization. Then governance must be implemented, product teams must be structured and implemented, and supporting IT capabilities must be created. Unlike leaders of startups, who can create an organizational vision from scratch, CIOs have to create their “new-not-new” IT organizations within the existing business mission and vision, supporting ongoing initiatives while laying the groundwork for transformation.

There’s no roadmap for success, but some companies are successfully pulling it off. Here’s how three IT organizations have risen to the challenge.

Forming product groups

As part of its move toward agile development, a $4.4 billion U.S. manufacturer now has five product groups focused on workforce, innovation, customers, manufacturing and analytics. Each group has a product manager who works directly with a business leader to determine what business capabilities that function needs IT to deliver.

For example, human resources and employees’ digital experience both come under IT’s workforce product group. “It’s up to the leader of the workforce group to understand the capabilities this part of the business needs and to dig into the details and put together a program and roadmap — and then to drive that roadmap,” explains the company’s CIO. IT then uses metrics to track progress and measure success after each capability is developed. “This marks a radical departure from previous IT–business conversations,” the CIO says.

Creating cross-functional teams

The IT organization for an $8 billion U.S.-based financial services organization has cross-functional teams that deliver capabilities to enhance various value streams. Capabilities — which ultimately can be integrated as APIs into larger customer ecosystems — continually evolve according to customer needs and market oppor- tunities. Each capability is considered a product, which is overseen by a product manager. It took only four months for a cross-functional team working in the company’s business accelerator program to deliver a new capability that has significantly improved how 10,000 employees interact with customers who use bank branch locations. The same capability would have taken 18 months to deliver under the previous system, in which business analysts delivered requirements to application developers who used a waterfall method with separate infrastructure and security teams. In addition, when the capability was delivered, the project would be closed.

Now, in contrast, IT focuses on evolving capabilities as business needs change. To ensure continuity in the ongoing development and delivery of new or expanded capabilities, the company has created the role of product manager, whose job responsibilities are much the same as the product manager at a software company. And IT has set speed and the level of new capabilities delivered as two of its key success metrics.

Changing IT and business culture

The CIO of a $6 billion manufacturing company has found that shifting from a project to a product orientation requires a huge cultural change for both IT and business. IT professionals must have a closer relationship with the business and a deeper understanding of customers. In turn, business must embrace IT as a full-fledged business partner. To achieve these two objectives, the CIO dedicates IT staff to specific business functions at the company.

Product managers at the company function much like product managers at a commercial software company. “They assess market needs, make customers aware of a product, and know how we should support our products,” the CIO notes. “They look out across months and years and oversee consistent product management and product delivery. It’s that broad and timeless.”

The company also deploys project managers on both IT and non-IT projects. In fact, the CIO has taken on responsibility for all project management at the company, creating a project management center of excellence within IT. “The skill set of project managers is invaluable in the old world and the new world,” the CIO says.

This story, "Who’s succeeding with product-focused IT?" was originally published by CIO.