Product IT Operating Model: The Next-Gen Model for a Digital World

Digitization presents many new opportunities for businesses to create value. At the same time, it forces IT to rethink the way it operates. Modern CIOs need an operating model that understands the blurring lines between IT and business and is designed for agility and speed. The product-centric IT operating model is rapidly emerging as the answer.

What does the model entail? In the product IT operating model, product lines are funded based on their strategic value to the organization, from the top-down, and are supported by dedicated management and delivery resources. The entire product team is measured on a common set of goals, which include customer experience, time-to-market, efficiency improvements, quality of software and availability and reliability of production environments.

5 Dimensions of Product IT Operating Model

Adopting a product IT operating model requires organizations to take an integrated approach toward product-based development and embark on a journey of continual improvements. While scaling agile DevOps that aligns business outcomes with engineering effort, enterprises must focus on these five key dimensions:

1. Organizational Change Management (OCM): Successfully transitioning from the traditional IT operating model to a product-based development approach requires organizationwide change management. An experienced IT service provider, can prove to be a key ally in ensuring a smooth transition.

2. Culture: Culture is an intrinsic characteristic of any organization, and instituting small but effective cultural changes coupled with OCM is the right approach to transition, rather than a “big bang” change. That’s also what some of the well-known enterprises across industries are doing.

a. Teams and Collaboration: The alignment of large teams across multiple organizational groups delivers to a common plan on the pace of change and helps to continuously embed innovation and experimentation for improved services.

3. Structure: Product-focused and highly talented teams across design, architecture, DevOps and operations are key to enhancing business capability. By measuring the entire team on same set of goals, it is easy to enhance customer experience, efficiency and quality of software while creating a stable production environment.

Structure also means aligning traditional application portfolios to specific business outcomes and bringing together all the capabilities and resources required for an organization to deliver on its business outcomes.

4. Technology: If business models, organizational structures, people and ways of working are the gears that run the enterprise IT engine, technology is the grease that enables this engine to run smoothly, without friction. Two key aspects of technology include:

a. Application Programming Interfaces (API): API-based architecture provides an extensible framework of building blocks, which in turn can be used to build powerful applications or software products. Easy maintenance is a hallmark of API-based architecture, as it can be quickly migrated further to any other target architecture.

b. Cloud, Microservices and Containers: Modern organizations need on-demand scalability. Cloud and microservices enable just that without disturbing ongoing business operations. However, it is important to first understand an organization’s product vision and road map, business priorities, competition, pace of market transition in their area of business and industry trends before choosing cloud or container-based infrastructure.

5. Process and Automation:

a. Agile Delivery Model: This is a critical prerequisite to building a minimal viable product (MVP), ensuring rapid delivery of critical enhancements or delivering a suite of product features in appropriate increments. Industry-standard agile practices such as LeSS and SAFe should be used, as they allow complete flexibility to tweak the model on the fly.

b. DevOps and DevSecOps: A DevOps culture is fundamental to adopting a product IT operating model. Continuous integration and delivery (CI/CD) require DevOps to be fully interwoven into the software development life cycle (SDLC), along with the right tools and governance mechanisms. This ensures high-quality products are delivered within short deployment lead times, along with the ability to fix production issues with low mean time to restore (MTTR) and ensure minimal to no change failure rate. DevOps also enables new-age practices such as automated testing, self-service access to infrastructure and automated performance management.

DevSecOps goes hand-in-hand with DevOps. It ensures security aspects are built into the products across the delivery pipeline, so the products are not only fault tolerant but also fool-proof, to a large extent. An experienced DevOps team builds and integrates security tools, solutions and processes to safeguard the organization.

c. Test Automation and Test-Driven Development (TDD): By integrating test automation into the development process, the product IT operating model allows organizations to create high-quality and quickly deployable products. Additionally, TDD enables governance to be integrated into the delivery pipeline by developing quality code in line with test cases written to describe user requirements more precisely. Tests are fully automated to ensure quality of code.

d. Service Health: With KPIs focused on the financial health of engagement, it’s easy to set a budget based on business capabilities and product levels to meet business goals effectively. The KPI framework encompasses key KPIs such as business, financial, learning and innovation and employee engagement outcomes, while staying flexible enough for different contracting models.

Delivering Value in a Changing Business Environment

Digitization mandates that IT deliver on three important aspects: Improve time to market, optimize costs and increase quality.  Adopting a product IT operating model helps IT deliver on the mandate by enabling a fail-fast way to deploy software quickly and cost-effectively, without sacrificing quality. However, given the extent of change involved in the shift, it is not something that can be achieved overnight. It must be underpinned by a journey of cultural change and continuous learning, using tools such as design thinking-driven, persona-based change journeys, alignment workshops and targeted campaigns and communication. Partnering with an expert system integrator can help organizations jump-start the process and ensure on-track transition with minimal disruption to business.

— Gagan Jain