Should One of the “P’s” in PPM Stand for Product?

Performance Improvement

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July 6, 2018

The topic of digital transformation was prevalent throughout the Gartner Program & Portfolio Management Summit and the shift from “project” to “product” was a common theme. Digital and Agile are the primary drivers for this shift and it is critical that organizations recognize their differences in order to create a successful delivery. As delivery teams shift from an “application” to a “product” mindset, they need to become hyper-focused on business outcomes and be able to measure the value of those outcomes at each incremental delivery cycle. One of the most challenging shifts in this new paradigm is the fundamental step of defining what a product is – CEB (recently acquired by Gartner) put it nicely in that product aligns the work of IT by how technology is consumed rather than how it is produced or delivered. A good place to start in defining a product is to think about where is the most line of sight to the customer (of course, customer could be external or internal).

A larger challenge for organizations shifting to a product mindset is the required changes to operating and governance models. The fundamental differences between project vs. product are not minimal: funding (budgeted vs. ongoing funding stream), work structure (fixed beginning and end vs. regular releases until retirement), change (avoided, gated vs. embraced), goals (on-time, on-budget vs. business outcomes ranked by business value), teaming (matrixed, functionally specialized vs. multidisciplinary), and tracking (by cost/time variance vs. by business value delivered). Gartner recommends starting with defining the new operating model. Organizations should get the enterprise governance partners (PMO, EA, Info Sec) engaged early and often with the product teams, which is actually easier for them than dealing with projects.

Finally, funding and financial management was another key topic as its relates to this shift from project to product. The short answer is there is no clear answer on this shift, and even leading companies are still struggling with best practices around shifting the financial operating model, governance, and cost/value tracking in this new paradigm (maybe only 5-10% of companies have figured this out according to the Gartner analyst). The key recommendations here are to track work at the highest level of granularity as possible (story or feature level, if possible) and start to implement value realization and business value metrics – which is more critical than ever in this new world!  Budgeting shifts from discrete projects to pools of funding at this higher level and business cases should be efficient (recommendation is to get to a one-pager, at the release or epic level).

The amount of attention paid on these topics at the conference reinforced that North Highland is poised to be on the front end of helping our clients with these challenges as we continue to evolve our thinking on Digital Transformation and Agile Transformation.  Our PPM thought leaders will bring great value to our clients as this is obviously a big topic on everyone’s mind.

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