Innovative CIOs make shift to managing IT as a product

The digital transformation gold rush has enterprises revamping their organizations from project-based IT service delivery to product-oriented technology.

Innovative CIOs make shift to managing IT as a product
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Leading-edge CIOs are pursuing new IT operating models characterized by agile development and continuous delivery cycles. And while co-creation with the business is the latest recipe for IT-business alignment, CIOs must also ensure their workflows match attendant value streams.

In short, they must stop thinking of their services as projects and start managing them as products, says Mik Kersten, founder and CEO of Tasktop, and author of Project to Product: How to Survive and Thrive in the Age of Digital Disruption with the Flow Framework. Unfortunately, most CIOs don’t manage IT this way, preferring to track budgets and to-do lists, says Kersten.

“They think in terms of projects,” Kersten, speaking of the majority of CIOs, to CIO.com. “Instead of incremental value delivery, they’re focused on one-year projects. Well, if you have 10 of these projects, it can’t possibly work.”

Here’s how several IT leaders are overhauling their IT operations and culture to make the shift to incremental value.

Managing IT as a product catches on

Count John Trainor among the converted to product-led IT.

As CIO of Aaron's, which operates more than 1,600 retail stores that offer furniture, consumer electronics and appliances for sale or lease to own, Trainor has embraced Kersten’s approach to managing technology. To do this, Trainor has challenged employees to think about the business value their efforts create.

“When I'm in a sprint review for my business intelligence team, I will challenge when they show a dashboard that they say has a lot of value,” Trainor explains. “I say, ‘Prove to me we got business value from you building this dashboard.’ Sometimes that's hard to do, but I want everybody thinking that way, including the junior BI developer, to show that the effort I put in results in business value.”

Value streams created at Aaron's can be easily discarded if they don’t provide value for the business, says Trainor, who retooled the company’s IT foundation with a new network and cloud services to improve IT services for both store employees and customers.

The digital imperative

The shift to product-based IT underscores how traditional companies are following in the footsteps of companies such as Facebook, Uber and others whose products are designed for the consumer masses.

But Kersten says there is another underlying impetus: Digital transformation. “Agile and DevOps is not enough,” Kersten says. “CIOs know they need a different approach.”

The scramble to create digital businesses has prompted 55 percent of businesses Gartner surveyed to move from project to product delivery.

Banking on a product-led organization

Product management has woven its way into online brokerages.

TD Ameritrade CIO Vijay Sankaran's first brush with product-led management started in the late 2000s at automotive giant Ford, which began building discreet applications to support product lines.

Sankaran brought this ethos with him to the online broker, which he says was entirely a project-based organization. To be more responsive to clients and associates, Sankaran organized IT into groups who build and support platforms for the broker's business units, including retail, trader and clearing systems.

Convinced that the only way this product-led model would work is by crafting software in rapid, iterative cycles, Sankaran initiated a shift toward agile development, beginning with the business-facing technology teams. He is currently expanding it to TD Ameritrade's infrastructure groups, where it is used in provisioning portals and infrastructure-as-a-service efforts. With the change, the broker has more than doubled its throughput, and Sankaran is accelerating deployment with DevOps, which will shorten release cycles to as little as 30 minutes.

Transitioning to a product management practice required some change management around delivery cycles. Sankaran says the biggest challenge has been getting his project managers accustomed to working with start and stop dates to shift gears toward iterative releases that launch minimally viable products into the market. Yet Sankaran says the challenges are worth it. "I'm a big believer in product-led technology organizations and I wouldn't do it any other way," Sankaran says.

Matriculating to private cloud software provider

Managing IT with a product mindset is a must for Marist College CIO Bill Thirsk, who says students and faculty alike expect to access their academic information from their PC and mobile devices anytime from anywhere.

Thirsk has pre-packaged upgrades for products such as finance and student modules, as well as Marist’s website, to roll out at off-peak times such as 2 a.m. when the changes will have the least impact on users.

Recognizing that Thirsk’s IT staff was skilled at delivering a continuous stream of updates, Marist’s board of directors challenged Thirsk to offer similar solutions to other private higher-education institutions. Thirsk replicated the course management applications, ERP software and other functionality that runs Marist for use by St. Elizabeth College, New England College, Lasell College and other institutions.

The institutions all pay Marist to access this “college in a box” based on their consumption of capabilities. The revenue, which Thirsk reinvests in Marist’s private cloud, is modest. But Thirsk says the idea is to enable small private colleges, many of which are struggling to stay afloat in a highly competitive higher education industry, to remain viable.

“We don't want to be the last private college in the U.S.,” Thirsk says.

The product management mentality has even caught on at retail giant Walmart under CIO Clay Johnson. Where IT managers previously owned a piece of an IT service, "product owners" are now responsible for integrated technology solutions, Johnson tells CIO.com.

"If you look at how [technology] products are developed, why wouldn't IT teams have that kind of model?” says Johnson. 

Copyright © 2019 IDG Communications, Inc.

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