By Oscar Escudero, Head of Digital Delivery at Zurich Technology Delivery Center
The shift from a project-based approach to a product-oriented one is becoming a prevalent trend in the corporate world today. Several factors drive this tendency, from the success of product-oriented companies in the startup industry to the increased demand for IT & Business functions fusion to create customer-focused products.
While a product-oriented approach is often inherited in startup organizational structure, it can be challenging to adopt for corporations since it requires changes in the traditional organizational structure silos, funding processes, skill and capability building as well as in the business case horizons.
According to Gartner’s predictions for 2022, 88% of corporate CEOs will maintain or accelerate their digital pace, 67% of CEOs will want more technology work done directly within business functions and 73% of managers outside of IT will want more technologists on their teams. These figures indicate true evolution calling for adopting a product-oriented approach as well as linking IT and business resources in a single delivery unit with a common goal to create a new “digital fusion team” concept.
In traditional organizations, departments are often siloed and focused on their own specific function leading to a lack of collaboration and communication between teams. This represents an obstacle for the product-oriented approach rooted in a cross-functional and collaborative structure with teams working together towards a common goal. The transition between the two models can be difficult for corporations to implement as it requires a change in the way teams are organized and managed.
Other key challenges while transitioning to a product-oriented approach include the organization’s medium-to-long-term commitment. While projects are focused on outputs , products are focused on outcomes. Completing a set of tasks or delivering a set of functions is no longer enough; organizations must shift their focus to building a product that addresses a specific need or solves a specific problem. And to fulfill this objective, organizations should be committed long-term and willing to invest in the development and maintenance of the product.
The medium-to-long-term view has an additional impact on funding processes. Funding for product teams is often allocated over a period of time to tackle a specific business problem rather than implement a set of functions to be delivered. This requires a stable and long-term funding capacity as opposed to the ability to ramp up and down according to project milestones, which is a common approach in traditional organizations.
Another consideration in this transition is the need for new skills and capabilities such as marketing, communications, analytics and customer service. These skills are not typically found within IT project teams and may require reskilling or hiring new staff.
In summary, transitioning to a product-oriented approach can be a significant challenge for corporations. It is important to be aware of the need for changes in the traditional siloed organizational structure, a medium- to long-term view and commitment from the organization, a stable and long-term funding capacity as well as new skills and capabilities such as marketing, communications, analytics and customer service. By understanding and addressing these challenges, corporations can successfully adopt a more product-oriented and startup way of working leading to increased innovation and growth.