Redesigning the organization as a digital business should be on the top of every CIO’s mind. In other words, transformation towards digital business should be the topmost priority for CIOs. Digital business designs, however, do not scale many a times, as the organization fails to bring changes to both its business and operating models to support the overall business strategy. Note that CIOs can be digitally innovative only through a fundamental shift to becoming a product-centric organization.
Why Go Product-Centric?
Organizations should adopt a product-centric approach, as doing so makes it easier for them to innovate and iterate faster, focusing on customer experience, evolving needs, and the strategic differentiation for a product or service. Your business stands a higher chance of growth and profitability if it adopts a product-centric model suitable for integrating digital technologies and scales. In the words of Lars Van Dam, Vice President Analyst, Gartner, “Making the shift from project to product is comparable to creating a product-centric technology organization, like becoming a software or digital business”.
The shift to a product-centric organization should focus on areas where there is an opportunity to innovate digital initiatives, like supporting a new business model. CIOs need more than enthusiasm and motivation for successful transformation to becoming a product-centric organization. Most importantly, this type of organization needs new skill sets, investment models, roles, and the right culture. Here’s the model that CIOs can follow.
But, firstly, let’s learn….
What Is a Product-Centric Organization?
Product-centric organizations focus their attention on building and bringing products to the market, instead of putting the customers in focus. A product-centric organization uses the most innovative technology and processes available to them for new product development. They operate on an agile, product-centric model emphasizing on out-innovating their competitors in every way.
Organizations that maintain product-centricity define their culture by the products they develop. It may be challenging to make this transition to adopt the culture of product centricity, but if teams focus on areas where there is scope to innovate digital initiatives, it becomes easy to implement the new business model. According to a 2018 survey by Gartner, Inc., 85% of organizations have adopted or plan to adopt a product-centric application delivery.
Besides, the products that a product-centric organization develops don’t necessarily fulfil customer needs, but rather are sold and marketed broadly based only on the product itself. The purpose here is to extend the reach of each product in the company’s portfolio to everyone.
Behave Like Software Companies
There are multiple ways to organize digital initiatives. The very first step is to look at companies that have built successful software technology organizations for fast learning and addressing quickly evolving needs. Such organizations have had to focus on evolving business models and disruptions. Delivering digital business initiatives at scale needs capabilities, like continuous product or service development and enhancement, data and event collection, security and privacy management as well as real-time analytics. When tasked with creating a digital product team, determine the structure first, define the requisite skill sets and roles, and only then should you build your team. Support the product manager by transforming part of your IT organization into a digital group that operates product-centric and speeds up the delivery of digital products and services.
Mix Funding Sources
You should understand that the development and deployment of digital products as well as services is generally considered to be an investment. You thus need to adjust investment models. The product development team will function at a deficit till the time an offering with market traction is set up. Market traction can be defined as “quantitative evidence of market demand.” Traction proves that somebody wants your product and it communicated momentum in market adoption. As Rome wasn’t built in a day, be prepared for the reality check that your digital products won’t make money for at least three to five years after their initial funding. In fact, they may even take longer. Besides corporate allocations, you should consider a mix of funding sources.
Place Product Management at the Core
As a driver of successful growth and scale, you should set the tone for the relevance of digital product management. A capable product management discipline is the most efficient means to improve product success odds and drive sustainable growth. Product management refers to the practice of driving the development in a strategic manner, market launch, and continual support as well as product improvement.
It is generally due to poor requirements that new offerings fail. You should thus equip product managers with a clear vision as well as a strategy for short and long-term. The next step is to establish a set of specific, measurable, achievable, and desired goals. The product and project managers of a company form the basis of the product-centric workflow supporting the CIO’s plan as well as the business model.
Are You Ready to Build a Product-Centric Organization?
Digital initiatives aren’t capable enough to create new engines of growth that can guarantee the survival of an organization. They can succeed only if the entire company transforms and grows product-centric, while the CIO takes the lead on the transformation process to assure an enhanced digital customer experience. Adopting and implementing a product-centric model enables organizations to build trust across and further better engagement between business stakeholders and IT as people work towards achieving a common goal to deliver results. As you clear the path to product delivery, your IT team can drive high-quality, faster business outcomes, improving employee engagement and customer satisfaction at the same time.