IT organizations often embrace Agile software development as the holy grail that will guide them to the digital product promised land. What many companies don’t realize when they embark on this transformation is that their problem is much bigger than simply choosing Agile over waterfall software development. It isn’t all about IT’s ability to deliver; it’s about companies needing to rethink how they invest in technology.
Traditional Business Cases Don’t Work for Digital Products
Over a decade ago, before every company had a mobile app, one of my friends took a job doing product strategy for a growing online healthcare ratings company. Soon after she started she called me, frustrated, asking for advice. She said, “I know we need a mobile app for our consumers. The problem is, I can’t get anything through my executive team without an in-depth business case and we just don’t know enough yet to produce that. What do I do?” Long story short, she ultimately quit – taking her strategic mind to a company that used it. Her old company later scrambled to pull something together, but lost the potential competitive advantage they could have gained had they only been able to move faster.
Most companies now understand that you can’t do the same type of business case on externally facing software as you can on replacing an internally facing enterprise system. Yes, you can make some assumptions on efficiency gains of interacting with customers digitally, but you usually can’t predict the hot feature that’s going to positively impact gaining market share. But even though companies understand this, most haven’t evolved the way they think about approving their technology investments.
Annual Portfolio Planning Doesn’t Work for Digital Products
Recently, I was facilitating a workshop with an IT leadership team. During the part of the workshop where we were diving into their delivery methods, they described something they call the “Fall Harvest.” During a six-week period in the fall, they gather all the ideas from the previous year, estimate and scope each idea, and then prioritize those ideas to develop next year’s project portfolio. They had the exact process every IT organization strived for in the 90s and even the 2000s.
Many organizations have worked so hard to get to this level of discipline that they just can’t give it up when it doesn’t work. And even though it can work for many types of IT projects (such as settling prioritization debates between whether finance should get their forecasting system upgraded or HR should get a new LMS), digital products change so fast that scoping them in great detail and planning them really far in advance results in false assumptions, missed opportunities, and wasted time.
So, What’s the Alternative?
We are in a really interesting time of transition. IT organizations are still maturing in how they are managing IT spend but also figuring out how to think about investments that can significantly drive revenue. In an ideal world, executive teams agree that they are willing to invest a certain amount in digital products for the year and they leave it to product management and the technology teams to drive the most value from that investment. I’ve seen this at the micro level (investing X amount of dollars into X product) as well as at a more macro-level (building and investing in a digital team), but what’s key is that digital products aren’t restrained by weighty bureaucratic processes that don’t actually add to or help to determine the value of a project.
Digital products are a unique beast, and can’t be contained by traditional IT processes. Is your organization trying to cage your digital products?