What is the most adequate operating model for software products and platforms?
A lot of companies today are choosing to aggregate their digital divisions with their traditional IT by bringing them into a single technology operating model.
Combining digital operations -- in which cross-functional teams apply new technologies and ways of working, such as agile, to improve user experiences -- and traditional IT delivery (in which technical specialists develop and maintain core business systems according to traditional methods) makes a lot of senses except for the fact that moving to an integrated technology operating model does require significant cultural change: further, to achieve the technical agility of a digital native, it is often enough to form integrated, cross-functional technology teams, which define forward-thinking technology organizations.
Part 1: Reorganizing technology teams
Today’s software products can be summarized as technology-enable offerings used by customers and employees. Their immediate and primary purpose is to enable users to perform activities that create value, in line with a business’s objectives. For example, a retailer’s search product contributes business value by making it easy for customers to find items on a website or mobile app. Its effectiveness might be measured with conversion-to-sale metrics and enhanced by improvements to search algorithms.
Whereas in this context, platform represent the backend tech capabilities, whether provided by individual systems or by assemblies of multiple systems, that power products, as well as the enterprise more broadly. The retail search product previously described, for example, might rely on an inventory platform that includes databases and integrations with suppliers. Typical platforms found at large companies would also include those for enterprise resource planning, customer relationship management, inventory management, and field operations.
In summary, an integrated technology model centers on products and platforms – which are two separate technology activities in the company.
Most companies launch their digital efforts with a focus on creating and improving products through a stand-alone organization that is separate or siloed from company IT. These separately funded digital units deliver user-experience innovations quickly by employing a mix of design and engineering talent, using cloud technologies, following agile delivery practices, and, often, fostering a different working culture and norms—an approach unlike that of a traditional IT function.
However, it is important that these digital units and IT departments are closely integrated, with thoughtful coordination and planning between the organizations to prevent any bottlenecks. For instance, as digital efforts expand to cover more customer and employee experiences and incorporate new technologies, integration between digital and traditional technology solutions requires more extensive collaboration. Differences in culture and ways of working can make it harder for digital and IT groups to integrate new digital offerings with core systems. Teams from other business functions can also get confused about which technology groups to work with—and how.
An integrated operating model helps resolve these differences by bringing IT and digital organizations into a single model for planning, delivering, and managing technology, reinforced by a shared culture and talent-management approach. In this model, digital and IT specialists work together on unified teams, each centered on an individual product or platform (Exhibit 2).
In the integrated tech org model, teams support products, platforms, and infrastructure
To address talent gaps, companies often find it necessary to reskill existing employees or hire additional talent. Product teams, for example, handle all aspects of product development, from design to user adoption, so their leaders must be able to understand users, translate their needs into technical requirements, manage product road maps, guide engineering teams, and oversee releases. Few organizations employ enough technology specialists with experience across these disciplines, so they must either train the people they have or bring in new people who have experience as product managers or product owners.
(to be continued)
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My name's phil mora and I blog about the things I love: fitness, hacking work, tech and anything holistic.
Head of Digital Product
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