Time to shift to a product-centric delivery model?

The majority of businesses are moving towards the method within the next two years.
20 February 2019 | 435 Shares

Time to become more agile? Source: Shutterstock

For most businesses, projects tend to happen in business-unit silos, competing with other company projects for resources and in most cases, contributing only to isolated metrics.

According to a survey by Gartner, however, more companies are moving towards so-called product-centric business models, which entails cultural shifts like collocating IT members into business units, system improvements and a DevOps approach.

The study found that 85 percent of organizations have adopted, or plan to adopt, this model— an estimated 80 percent are moving towards it by 2022.

Gartner says that product-centric business models offer quicker business outcomes, improved customer experiences, reduced friction within the organization and more flexibility.

All that results in increased trust across the business as the organization works toward the same goals, and while just 40 percent used the approach for their work in 2018, Gartner predicts the figure will reach 80 percent by 2022.

“The increase in how quickly and broadly organizations are adopting the product-centric application model doesn’t arise randomly…it goes together with the adoption of agile development methodologies and DevOps,” said Bill Swanton, distinguished research vice president at Gartner.

Swanton says that an increasing number of applications that IT teams develop are used by external parties, such as clients or partners, and require the increased customer focus that characterizes the product-centric model.

The survey found that over half (54 percent) of respondents expect to fully adopt the product-centric application model over time, while roughly one-third (32 percent) plan partial adoption.

According to the report, managing everything as a product is unlikely to be justified, as some IT activities, such as initial implementation of a large software package, may well be better managed as projects. But for high-priority products, the strategy could prove advantageous.

“Given that no IT organization gets anywhere near enough funding to do everything everyone wants when they want it, product-centric approaches allow faster delivery of the most important capabilities needed,” said Swanton.

He said they also force the business to prioritize the work, and to reprioritize it as requirements which are better understood for the market changes.

The need to deliver more quickly was the main driver of adoption of a product-centric application approach among nearly a third of respondents (32 percent). That came second to ‘digital business’, among 31 percent of respondents.

Implementing a product-centric approach may not be without its hurdles though. Concerns about project-based funding and the culture clash between “the business” and “IT” were the top challenges for 55 percent of the respondents.

Ultimately, as organizations gain more experience with product-centric delivery models, one can expect product and technical leadership to separate from administrative line management.

“This will have an impact on the prospects of holders of the application leader role, who will need to choose between product management, engineering team management, and administrative people management,” he said.