In today’s rapidly evolving environment, the need to optimize digital channels and accelerate digital transformation roadmaps for quicker value realization is front of mind. This has led many to ask themselves, “Am I prioritizing things that get value to my customers the fastest?” Questions like these have led organizations to consider transitioning away from a project-centric delivery model, which measures success through on-time and on-budget delivery, to a more product-centric delivery.
Product-centric delivery measures success through value-based metrics defined for a product and/or value stream. A recent Gartner survey found 55% of organizations are making the shift to become more product-centric. This transition helps enterprise organizations drive maximum value to their customers while remaining within existing financial and resource constraints. It may seem like a daunting task, but many organizations see it result in improved time to value.
What’s In It for Me?
A traditional project-centric approach relies on an annual budgeting cycle to allocate funds to a particular project or portfolio. This encourages creation of complex business cases based on a single snapshot, justified by loose assumptions, and a projected value that is rarely achieved. Prioritization decisions are commonly made based on which projects are funded, rather than projects that provide the most value for customers. Additionally, there is often minimal effort made to measure outcomes against the original projections. Once the budget and resources have been allocated, the team focuses on meeting milestones while remaining within budget. Once the fixed scope has been delivered, the team is disbanded and assigned to another project team.
Now imagine if your organization re-visited funding on a bi-monthly or quarterly basis. Shifting to product-centric delivery encourages smaller scope initiatives driven by persistent teams with frequent assessment of the value against previously defined success metrics. It also encourages frequent delivery of value, enabling the team to iterate, react to market changes and consistently enhance the product based on feedback from the actual users. Using this approach will significantly reduce the time between initial investment and initial value delivery to customers.
Is My Organization Ready?
Initiating a change of this magnitude is a challenge. Based on experience, it is recommended to start with an assessment of change to gain understanding of the level of effort required. The readiness assessment should look at how much change your organization would need to meet these leading practices.
When assessing readiness there are five key areas that should be evaluated. The table below contains a brief description of leading practices seen in product-centric organizations.
- Budget: Budget is allocated at the product-level, frequently revisited to measure value realized, and reallocated to the activities that produced the most value to the customer.
- Resources: Persistent teams aligned to a value stream/product. Churn across value streams is minimized and resources are allocated to the activities based on expected and delivered value.
- Solution: Product roadmaps are iteratively refined through assessment of value delivered and collaborative feedback loops. Roadmaps are modified and reprioritized to reflect most recent learnings.
- Measurement: Clearly defined value and approach to measure value at the onset. Each small-scope initiative has designated success metrics and measurement techniques.
- Validate: Each small-scope initiative treated as an experiment enabling frequent validation and course correction.
Shifting to a product-centric organization can provide faster business outcomes, flexibility, improved customer experiences and less friction within an organization. Unify Consulting has partnered with our client on this transition, resulting in organizational shifts to a more experimental culture focused on rapid value delivery to the customer.
About the Author
Kris Dayton is a Product Management Practice Director. He leverages his vast knowledge of product development and technology along with the Unify’s experienced product managers to drive definition of product organizations and products for Fortune 500 organizations. These efforts provide valuable insights into the performance and value delivered by your products. To learn more about how to implement performance frameworks and make data-driven decisions for your organization, visit our Product Management Practice page or contact us today.