Why is a product mindset essential for digital transformation?
The widespread use of computers and the internet has sparked the present digital revolution, which links people and objects, forecasts the future, manages enterprises, and makes it possible to manage different businesses and procedures effectively. Despite being referred to as the third industrial revolution, it is considerably different from the first, which allowed for mass production. It is true that in the early years of the digital era, we succeeded in developing and extending software systems by drawing on the knowledge and experiences of industrial systems.
However, creating digital solutions differs greatly from creating physical objects like buildings and bridges or producing goods. In addition, our products and applications are now more globally interconnected and a part of a new ecosystem. So, can we apply those same project management methods 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 at a rapid pace and shows no sign of slowing. Some businesses that can’t keep up with the changing times and still use older project management techniques fail and suffer due to this – financially and productivity wise. 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 determines the future of every business
All corporate systems, including its vision and strategy, must alter because of the ongoing digital transformation process. Modern business decision-making involves the use of technologies like data analytics. Even the management’s tasks and responsibilities have changed due to this extensive use of technology. Traditionally, the company’s strategy and vision were decided by the CIO, a business management expert.
Unless they keep up with the technology advancements and learn new digital skills, they will be 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 five ways product mindset is different from a project-oriented one
- A project has a due date and is primarily concerned with cost effectiveness. A product attitude, however, is more in line with generating profit. It helps you develop a long-term vision by expanding your perspective beyond a set period. A project only generates one-time money and uses resources, whereas an intellectual property (IP) product generates ongoing revenue and contributes to the creation of new 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.
- Business value added and new income streams are used to determine whether a product implementation was successful rather than meeting a deadline or finishing a stated project on time. This is not to say that time is not an important factor in the creation of software solutions. It implies that innovation is a continuous process and that limiting it to a predetermined objective is detrimental to organisations in the ever evolving digital ecosystem.
Contact our Product Minded team to find out all the ways we can support you on your business’ digital transformation pathway
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