The current digital revolution brought by the wide usage of computers and the internet connects people and devices, predicts the future, runs businesses, and enables efficient management of various businesses and processes. Though it is sometimes called the third industrial revolution it is very different from the preceding industrial revolution that enabled mass production. It is true that in the early days of the digital era, we used the knowledge and experiences of industrial systems and succeeded in creating and extending software systems.
However, building digital products is starkly different from constructing buildings and bridges or manufacturing stuff. Moreover, our products and applications are now more connected across geographies and are part of a different ecosystem. So, can we apply those project management techniques of manufacturing and construction to the vastly different software products that participate in a digital ecosystem?
Digital Transformation – The story of every successful business.
The digital ecosystem is growing super-fast. Some businesses that can’t keep up with the changing times and still use older project management techniques fail. On the other hand, we have around us many examples of unexpected but huge successes. What is the common part in the success stories of every business in any sector that has effectively overcome technology disruptions? Undoubtedly, the answer is ‘having digital transformation at the heart of their business strategy’.
Digital transformation is not about using software.
No business is disconnected from digital technologies. For any business, to sustain itself in the digital era, it is crucial to not just use digital systems, but to think like a software company. Earlier IT teams in non-software manufacturing or industrial firms were siloed and disconnected from the core businesses. They were used to build or maintain solutions for communications, sales, or marketing.
However, with the proliferation of connected devices and new communication channels, this digitization is not only insufficient, but it has also stopped delivering any business value. It is time, businesses embrace ‘digital’ as its core and develop their business processes around it. This change often referred to as ‘digital transformation’, is neither an easy one nor an impossible one.
Technology decides the future of every business.
This continuing process of digital transformation calls for change in all business systems including its vision and strategy. Nowadays, technologies like data analytics are used to determine the direction a company would be steered. This wide application of technology has even changed the roles and responsibilities of the management. Traditionally, a CIO , an expert at business management used to determine the strategy and vision of the company.
Unless he/she keeps up with the technology advancements and learns new digital skills, he/she is replaced by a tech-savvy CTO. In many organizations, applying the latest technologies is essential, and hence a CTO is now considered crucial for the success of the organization.
The Product Mindset – leading businesses towards their vision
This huge shift of making all businesses tech-centric calls for a new mindset that suits the current trends. It is even more essential for IT enterprises pioneering digital transformation across various IT as well as non-IT businesses. This new mindset that underlies the vision of businesses and leads them towards it is the product mindset.
According to a survey conducted in 2019 by global research house Gartner, Inc., 85 percent of organisations have adopted, or plan to adopt, a product-centric application delivery model. We believe the percentage is even higher now since the pandemic has further accelerated digital adoption and transformation. Though both products and projects are tech (code-based) solutions, they differ in the way they are planned, built, and enhanced. The differences are not much in the code or technical implementation, but in the mindset that guides these solutions.
Here are 5 ways a product mindset is different from a project-oriented one.
- A project has a deadline and is more focused on cost savings. But a product mindset is more aligned with adding business value. It stretches your view beyond a fixed timeline and aids in a long-term vision. A project brings one-time revenue and only consumes resources whereas a product as an intellectual property (IP) brings continuous revenue and helps build more resources.
- A project treats human resources as temporary workers who can be replaced frequently. Management does not focus much on their knowledge base but on how efficiently they can follow instructions. A product management process aims at retaining employees for longer periods and recognizes the value they add to the business.
- When developing a product, from engineers to architects to operational managers to sales and marketing team members, everyone irrespective of their expertise should be aligned with the business goals. A project mindset doesn’t allow such transparency and hence increases the gap between technical and business goals.
- Novel methodologies like Agile and DevOps are not compatible with a project development mindset. There have been many examples of businesses failing despite successful Agile transformations. The problem however has later been found in the typical disconnected project management. The key to ensuring successful Agile transformations and continuous innovation is in the product mindset of the top management that fosters transparency and aids innovation.
- Successful product implementation is measured in the business value-added and the additional revenue streams opened and not on completing a defined project before a deadline. This doesn’t mean that time is not crucial in developing software products. It means that innovation is an ongoing process and restricting it to a pre-defined goal is counter-productive to businesses in the fast-changing digital ecosystem.
As discussed, a product mindset or product development is essential for digitalization. But how do these solutions help in opening new revenue streams? Digitalization doesn’t end with developing products or innovative solutions. So how do we extend it further? Wait for the next blog, where we discuss extending software products to enable a longer vision, sustainable growth, and new business value.