3 ways to avoid traffic on the road to product-based IT – CIO

In the endless need for speed, digital leaders continue their shift from project to product orientation. However, this shift is not a set it and forget it initiative. It requires nurturing and continuous evolution that often leads CIOs to wonder: is our team doing this because its trendy, or are we in this to drive meaningful change?

Defining and rolling out a product operating model is just the beginning of a long road wrought with blind turns and detours.And your ability to drive meaningful change will ultimately hinge on your ability to navigate three realities once the table is set.

Successful product owners have a unique combination of business acumen, technical know-how, and leadership skills. An absence of maturity in any one of these traits can spawn an existential crisis for product-based IT. In our conversations with CIOs, one of the most common things we hear is that there arent enough qualified product owners.

Many organizations have spun up product management bootcamps or digital academies to buck the trend and equip their teams with the tools they need to be successful product owners. Amir Arooni, EVP and CIO at $13 billion Discover Financial Services, launched a technology academy to give his engineers a more diverse skillset and to curb the view that developers are like workers on a production line that churn out code, rather than creative problem-solvers who can help innovate. This training program coupled with a product orientation in IT is paying dividends: a recent mobile pilot resulted in a productivity increase of almost a third with no increase in headcount.

Other organizations may choose to source product owners directly from business units and functions, combining them with IT counterparts in a cohesive unit that breaks down the perceived wall between business and IT.

Whether you pursue a product management bootcamp, source product owners from business units, or pursue something entirely different, be prepared to invest in training to ensure new product teams have the skills to succeed.

Evolving your IT operating model in a vacuum, without bringing business units and functions into the fold, can create small wins, but it will ultimately fall short of the transformative outcomes you seek. For outsized returns in implementation, engage BUs and functions early and allow them to put their fingerprints on the following components of the operating model:

If the goal of shifting to product-based IT is to have autonomous and empowered product teams that pursue the highest-value opportunities, you cant let finance slow you down with rubber-stamp processes. Digital leaders need to build a close partnership with finance to demonstrate the benefits of a product-based funding model for them and the organization at large.

In a recent conversation with Maya Leibman, EVP & CIO of American Airlines, she noted that traditional, project-based funding models were designed to make you give up. There were so many mountains to climb, it had almost become a game of endurance. She went on to say that prior to adopting product funding, many teams would use maintenance dollars for projects just to avoid the approval process.

American Airlines new product-based funding model provides a persistent stream of funding and reduces unnecessary approvals. The boarding experience product team, for example, adds up the technology and process costs that go into maintaining and enhancing the boarding experience annually, then receives those funds to spend at their discretion to mature the experience. Not only did this improve speed and throughput, but it also provided finance more visibility into costs and new ways to prioritize investments. Ross Clanton, American Airlines Managing Director of Technology Transformation, highlighted a breakthrough that occurred in the finance department as a result of the new funding model: They could see into the black box of run costs now, not just the grow costs we submitted in the project-based model.

Shifting to a product operating model is a major cultural and operational change. When implemented well and improved continuously, it can result in faster time to market, more innovation, and better customer experiences. But the road is not easy, and CIOs need to be ready to get their hands dirty. Accounting for the realities above in your plans can help you bypass many traffic jams on the road to product utopia.

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3 ways to avoid traffic on the road to product-based IT - CIO