Gartner: Organisations shifting to product-centric model for digital transformation

“Some organisations may shift to a product management-based approach for digital innovations because it allows for multiple iterations,” said Marcus Blosch, research vice president at Gartner in another Gartner survey in 2018 that Information Age covered.

To succeed in digital transformation, large enterprises, especially, need to reorganise themselves into a product-based structure, which is cross-functional and organised around customer problems. And, the product manager should be the one leading these various digital initiatives.

Gartner has confirmed that organisations are beginning to realise and embrace this ethos. The research and advisory company has found that 85% of organisations have adopted, or plan to adopt, a product-centric application delivery model.

Currently, full adoption is rare and fraught with cultural challenges, but in 2018 those surveyed said they used a product-centric model for 40% of their work. Gartner predicts that this figure will reach 80% by 2022.

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

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Embrace the product-centric application delivery model

The survey from Gartner found that over half (54%) of respondents expect to fully adopt the product-centric application model over time, while roughly one-third (32%) plan partial adoption (see Figure 1).

According to Gartner: ‘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.’

Figure 1: Plans for adopting a product-centric application delivery model

Figure 1: Plans for Adopting a Product-Centric Application Delivery Model. Note: Due to rounding, numbers may not add up precisely to the totals shown. Source: Gartner (February 2019)
Note: Due to rounding, numbers may not add up precisely to the totals shown. Source: Gartner (February 2019)

Swanton added: “Business leaders are generally unhappy with the speed at which they get application improvements and how they work. Given that no IT organisation 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. They also force the business to prioritise the work, and to reprioritise it as requirements are better understood or the market changes.”

Product-centric application motivation: speed to market and digital business desire

Moving to a product-centric application approach is necessary for business success in the digital economy.

According to Gartner’s survey, 32% of the respondents identified a need to deliver more quickly as their main driver of adoption of a product-centric application approach. They said that speed to market was the main driver of their transformation process.

Digital business came second (31% of respondents). Gartner explained: ‘When organisations start a digital transformation journey, they often find that traditional project methods are not suitable for the uncertainties of a transformative business model. They discover a need to adopt agile methods and to treat the results as products, since they will be used by external customers.’

As with anything, a shift from a project-centric to a product-centric application approach does not come without challenges. Concerns about project-based funding and the culture clash between “the business” and “IT” were the top challenges for 55% of the respondents.

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The rise of the product manager

As mentioned, the product manager will emerge as a digital transformation champion, driving specific initiatives for different customer problems.

Gartner’s survey confirmed this, with 46% of the respondents revealing their organisation had already appointed a product manager, while 15% planned to introduce this role by the end of 2018 (10% have no plans to introduce this role).

According to the majority of respondents, product managers report, or will report, to the IT organisation or project management office.

At the same time, respondents said they expect the role of application leader to change. For 43%, the role will reside in the IT organisation, while for 32% it will migrate into business teams where the application leader will lead a product line or be a group or single product manager.

“As organisations gain more experience with product-centric delivery models, we 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,” Swanton said.

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Nick Ismail

Nick Ismail is a former editor for Information Age (from 2018 to 2022) before moving on to become Global Head of Brand Journalism at HCLTech. He has a particular interest in smart technologies, AI and...