A Strong Marriage with Agile and Product Management
At AKF, we specialize in improving the scalability of digital product organizations. Two tenants of modern digital product organizations are Agile Development and Product Management.
Traditional IT organizations are starting to embrace Agile Development. Unfortunately, very few understand the role of Product Management. Agile without proper Product Management leaves money on the table. Longer term, it exposes the organization to competitive risk.
In many organizations, the relationship between the Business and IT is often strained. This is more common in older organizations, but can happen quickly in newer ones.
Clearly defining responsibilities of Business and IT leaders helps repair this relationship. Modern Agile and Product Management best practices keep the relationship strong.
A good relationship between the Business and IT correlates with a profitable organization. In the digital transformation, a good relationship can improve the profitability of the company. A bad relationship can decrease the profitability of the company.
Are your platforms and tools helping or hurting your business?
Many leaders do not stop to consider the following situation. Assume the majority your employees spend over half of their working time in front of a computer. Do you know how effective or efficient your highest expenses are?
Consider a similar situation. Assume the majority of your prospects and customers spend a growing amount of time in front of a computer or on their phone. Do you know how effective and smooth your interactions are with your sources of revenue?
Complexity can split the relationship
We will start with a traditional relationship where the relationship between the Business and IT is transactional. The role of the Business to to provide capabilities. For example, the Finance department 'manages accounts payable'. Or, Sales 'manages quoting and sales'.
The role of IT is to provide platforms to support these capabilities. IT configures (or builds) an accounting system for the Finance department. IT configures (or builds) a CRM for the Sales department.
In a year or two, the Business needs to expand or extend their capabilities. The Finance department may need to automate or ease 'close the books'. Sales and Finance may need to 'accept credit cards'. If the platform IT has built or configured cannot immediately provide those new capabilities, other platforms are implemented. For example, a Business Intelligence report is used to close the gap. Or, a plug-in from a vendor partner is used.
In another year or two, the Business needs to continue to expand and extend their capabilities. If IT and/or the prior platforms cannot meet these new needs, the Business will find their own solutions. These solutions are frequently easier to access tools such as a Software as a Service or desktop software. The desktop software is often Outlook, Excel, and/or PowerPoint.
In a few years, a Finance or Sales department can use a dozen platforms to support their capabilities. Too often, there is not a single person that understands how a process or relationship is managed across these platforms.
The Relationship (Marriage) is strained and getting worse
The gap between what the Business needs and IT can provide continues to grow. There are several reasons for this, but the primary causes are:
- Waterfall project management
- PMO steering committees
- Lack of small and medium sized services
Waterfall often extends timelines and penalizes the business for changing requirements to meet market needs.
PMOs and Steering committees tend to ask uninformed stakeholders to make decisions without understanding benefits and risks. If your project does not make the cut list, the business needs are often not meet but continue to grow.
Too many IT departments only have projects or tickets. Services sit between these two extremes.
When the gap between what the Business needs and IT provides continues to grow, the consequences to the Business are dire. Business side leaders cannot attract talent because the work environment is not conducive. Employees are stuck with primitive tools. Customers are stuck with dated experiences. Competitors pull away.
The consequences to the IT are just as dire. IT leaders cannot attract talent. Key talent leaves and moves on to competitors.
Fixing the Relationship (Marriage)
At this point, the relationship or marriage between the Business and IT is is broken. Divorce and/or counseling is needed to repair the relationship. Counseling is often needed even with a divorce. A key component of counseling is recognizing the need for change by both parties.
Counseling requires changing behaviors. We use the ADKAR change management model to guide our clients. ADKAR stands for:
- Awareness of the need for change
- Desire to make the change
- Knowledge how to make the change
- Ability to actually make the change
- Reinforcement of the new behaviors to make the change stick
We will explain more details of the ADKAR model for Digital Transformation in our next blogpost.
As part of the Desire and Knowledge phase, Business leaders typically need to understand the costs and risks of the current state. This can done by benchmarking against competitors. This can also be done via top down and bottoms up analysis. A top down analysis could be 'What if we improved revenue by X% with a better eCommerce capability'? A bottoms up analysis could be 'What if we improved our ability for new customers to find us via Google searches in this product category?"
Similarly for IT, they can and should perform top down and bottoms up analysis. This can be done by assessing the risk of current platforms.
Benchmarking, top down analysis, and bottoms up analysis should generate two types of investments:
- Short term fixes with existing tools
- Long term fixes with new platforms
Both types of investments should be focused on improving employee processes and relationships.
The ADKAR model closes with the Ability and Reinforcement stages. Agile Development provides the Ability to deliver and utilize new platforms. Product Management provides the Reinforcement to continually invest in better tools for employees and customer experiences.
Agile Development (done properly) reduces project risk. Even large internal system replacements that look like Waterfall projects benefit from the risk reductions provided by Agile Delivery.
Product Management keeps the relationship strong by avoiding the pitfalls identified earlier when IT and Business Stakeholders are not in a committed relationship. Product Management keeps the Business incentivized to monitor their capabilities and invest appropriately.
