Drive Technology Adoption

The project is over. The new technology is implemented. Now how do we make sure it's used?

Executive Summary

Your Challenge

Technology endlessly changes and evolves. Similarly, business directions and requirements change, and these changes need to be supported by technology. Improved functionality and evolvement of systems, along with systems becoming redundant or unsupported, means that maintaining a static environment is virtually impossible.

Enormous amounts of IT budget are allocated to these changes each year. But once the project is over, how do you manage that change and ensure the systems are being used? Planning your technology adoption is vital.

Common Obstacles

The obstacles to technology adoption can be many and various, covering a broad spectrum of areas including:

• Reluctance of staff to let go of familiar processes and procedures.
• Perception that any change will add complications but not add value, thereby hampering enthusiasm to adopt.
• Lack of awareness of the change.
• General fear of change.
• Lack of personal confidence.

Info-Tech’s Approach

Start by identifying, understanding, categorizing, and defining barriers and put in place a system to:

• Gain an early understanding of the different types of users and their attitudes to technology and change.
• Review different adoption techniques and analyze which are most appropriate for your user types.
• Use a “Follow the Leader” approach, by having technical enthusiasts and champions to show the way.
• Prevent access to old systems and methods.

Info-Tech Insight

For every IT initiative that will be directly used by users, consider the question, “Will the final product be readily accepted by those who are going to use it?” There is no point in implementing a product that no one is prepared to use. Gaining user acceptance is much more than just ticking a box in a project plan once UAT is complete.

The way change should happen is clear

Prosci specializes in change. Its ADKAR model outlines what’s required to bring individuals along on the change journey.

AWARENESS

• Awareness means more than just knowing there’s a change occurring,
• it means understanding the need for change.

DESIRE

• To achieve desire, there needs to be motivation, whether it be from an
• organizational perspective or personal.

KNOWLEDGE

• Both knowledge on how to train during the transition and knowledge
• on being effective after the change are required. This can only be done
• once awareness and desire are achieved.

ABILITY

• Ability is not knowledge. Knowing how to do something doesn’t necessarily translate to having the skills to do it.

REINFORCEMENT

• Without reinforcement there can be a tendency to revert.

When things go wrong

New technology is not being used

The project is seen as complete. Significant investments have been made, but the technology either isn’t being used or is only partially in use.

Duplicate systems are now in place

Even worse. The failure to adopt the new technology by some means that the older systems are still being used. There are now two systems that fail to interact; business processes are being affected and there is widespread confusion.

Benefits not being realized

Benefits promised to the business are not being realized. Projected revenue increases, savings, or efficiencies that were forecast are now starting to be seen as under threat.

There is project blowout

The project should be over, but the fact that the technology is not being used has created a perception that the implementation is not complete and the project needs to continue.

Info-Tech Insight

People are far more complicated than any technology being implemented.

Consider carefully your approach.

Why does it happen?

POOR COMMUNICATION

There isn’t always adequate communications about what’s changing in the workplace.

FEAR

Fear of change is natural and often not rational. Whether the fear is about job loss or not being able to adapt to change; it needs to be managed.

TRAINING

Training can be insufficient or ineffective and when this happens people are left feeling like they don’t have the skills to make the change.

LACK OF EXECUTIVE SUPPORT

A lack of executive support for change means the change is seen as less important.

CONFLICTING VIEWS OF CHANGE

The excitement the project team and business feels about the change is not necessarily shared throughout the business. Some may just see the change as more work, changing something that already works, or a reason to reduce staff levels.

LACK OF CONFIDENCE

Whether it’s a lack of confidence generally with technology or concern about a new or changing tool, a lack of confidence is a huge barrier.

BUDGETARY CONSTRAINTS

There is a cost with managing people during a change, and budget must be allocated to allow for it.

Communications

Info-Tech Insight

Since Sigmund Freud there has been endless work to understand people’s minds.
Don’t underestimate the effect that people’s reactions to change can have on your project.

Communication plans are designed to properly manage change. Managing change can be easier when we have the right tools and information to adapt to new circumstances. The Kubler-Ross change curve illustrates the expected steps on the path to acceptance of change. With the proper communications strategy, each can be managed appropriately

Analyst perspective

Paul Binns – Principal Research Advisor, Info-Tech

The rapidly changing technology landscape in our world has always meant that an enthusiasm or willingness to embrace change has been advantageous. Many of us have seen how the older generation has struggled with that change and been left behind.

In the work environment, the events of the past two years have increased pressure on those slow to adopt as in many cases they couldn't perform their tasks without new tools. Previously, for example, those who may have been reluctant to use digital tools and would instead opt for face-to-face meetings, suddenly found themselves without an option as physical meetings were no longer possible. Similarly, digital collaboration tools that had been present in the market for some time were suddenly more heavily used so everyone could continue to work together in the “online world.”

At this stage no one is sure what the "new normal" will be in the post-pandemic world, but what has been clearly revealed is that people are prepared to change given the right motivation.

“Technology adoption is about the psychology of change.”
Bryan Tutor – Executive Counsellor, Info-Tech

The Fix

• Categorize Users
  • Gain a clear understanding of your user types.
• Identify Adoption Techniques
  • Understand the range of different tools and techniques available.
• Match Techniques To Categories
  • Determine the most appropriate techniques for your user base.
• Follow-the-Leader
  • Be aware of the different skills in your environment and use them to your advantage.
• Refresh, Retrain, Restrain
  • Prevent reversion to old methods or systems.

Categories

Client-Driven Insight

Consider your staff and industry when looking at the Everett Rogers curve. A technology organization may have less laggards than a traditional manufacturing one.

In Everett Rogers’ book Diffusion of Innovations 5th Edition (Free Press, 2005), Rogers places adopters of innovations into five different categories.

Category 1: The Innovator – 2.5%

Innovators are technology enthusiasts. Technology is a central interest of theirs, either at work, at home, or both. They tend to aggressively pursue new products and technologies and are likely to want to be involved in any new technology being implemented as soon as possible, even before the product is ready to be released.

For people like this the completeness of the new technology or the performance can often be secondary because of their drive to get new technology as soon as possible. They are trailblazers and are not only happy to step out of their comfort zone but also actively seek to do so.

Although they only make up about 2.5% of the total, their enthusiasm, and hopefully endorsement of new technology, offers reassurance to others.

Info-Tech Insight

Innovators can be very useful for testing before implementation but are generally more interested in the technology itself rather than the value the technology will add to the business.

Category 2: The Early Adopter – 13.5%

Whereas Innovators tend to be technologists, Early Adopters are visionaries that like to be on board with new technologies very early in the lifecycle. Because they are visionaries, they tend to be looking for more than just improvement – a revolutionary breakthrough. They are prepared to take high risks to try something new and although they are very demanding as far as product features and performance are concerned, they are less price-sensitive than other groups.

Early Adopters are often motivated by personal success. They are willing to serve as references to other adopter groups. They are influential, seen as trendsetters, and are of utmost importance to win over.

Info-Tech Insight

Early adopters are key. Their enthusiasm for technology, personal drive, and influence make them a powerful tool in driving adoption.

Category 3: The Early Majority – 34%

This group is comprised of pragmatists. The first two adopter groups belong to early adoption, but for a product to be fully adopted the mainstream needs to be won over, starting with the Early Majority.

The Early Majority share some of the Early Adopters’ ability to relate to technology. However, they are driven by a strong sense of practicality. They know that new products aren’t always successful. Consequently, they are content to wait and see how others fare with the technology before investing in it themselves. They want to see well-established references before adopting the technology and to be shown there is no risk.

Because there are so many people in this segment (roughly 34%), winning these people over is essential for the technology to be adopted.

Category 4: The Late Majority – 34%

The Late Majority are the conservatives. This group is generally about the same size as the Early Majority. They share all the concerns of the Early Majority; however, they are more resistant to change and are more content with the status quo than eager to progress to new technology. People in the Early Majority group are comfortable with their ability to handle new technology. People in the Late Majority are not.

As a result, these conservatives prefer to wait until something has become an established standard and take part only at the end of the adoption period. Even then, they want to see lots of support and ensure that there is proof there is no risk in them adopting it.

Category 5: The Laggard – 16%

This group is made up of the skeptics and constitutes 16% of the total. These people want nothing to do with new technology and are generally only content with technological change when it is invisible to them. These skeptics have a strong belief that disruptive new technologies rarely deliver the value promised and are almost always worried about unintended consequences.

Laggards need to be dealt with carefully as their criticism can be damaging and without them it is difficult for a product to become fully adopted. Unfortunately, the effort required for this to happen is often disproportional to the size of the group.

Info-Tech Insight

People aren’t born laggards. Technology projects that have failed in the past can alter people’s attitudes, especially if there was a negative impact on their working lives. Use empathy when dealing with people and respect their hesitancy.

Adoption Techniques

Different strokes for different folks

Technology adoption is all about people; and therefore, the techniques required to drive that adoption need to be people oriented.

The following techniques are carefully selected with the intention of being impactful on all the different categories described previously.

There are multitudes of different methods to get people to adopt new technology, but which is the most appropriate for your situation? Generally, it’s a combination.

Train the Trainer

Use your staff to get your message across.

Abstract

This technique involves training key members of staff so they can train others. It is important that those selected are strong communicators, are well respected by others, and have some expertise in technology.

Advantages

• Cost effective
• Efficient dissemination of information
• Trusted internal staff

Disadvantages

• Chance of inconsistent delivery
• May feel threatened by co-worker

Best to worst candidates

• Early Adopter: Influential trendsetters. Others receptive of their lead.
• Innovator: Comfortable and enthusiastic about new technology, but not necessarily a trainer.
• Early Majority: Tendency to take others’ lead.
• Late Majority: Risk averse and tend to follow others, only after success is proven.
• Laggard: Last to adopt usually. Unsuitable as Trainer.

Marketing

Marketing should be continuous throughout the change to encourage familiarity.

Abstract

Communication is key as people are comfortable with what is familiar to them. Marketing is an important tool for convincing adopters that the new product is mainstream, widely adopted and successful.

Advantages

• Wide communication
• Makes technology appear commonplace
• Promotes effectiveness of new technology

Disadvantages

• Reliant on staff interest
• Can be expensive

Best to worst candidates

• Early Majority: Pragmatic about change. Marketing is effective encouragement.
• Early Adopter: Receptive and interested in change. Marketing is supplemental.
• Innovator: Actively seeks new technology. Does not need extensive encouragement.
• Late Majority: Requires more personal approach.
• Laggard: Resistant to most enticements.

One-on-One

Tailored for individuals.

Abstract

One-on-one training sometimes is the only way to train if you have staff with special needs or who are performing unique tasks.
It is generally highly effective but inefficient as it only addresses individuals.

Advantages

• Tailored to specific need(s)
• Only relevant information addressed
• Low stress environment

Disadvantages

• Expensive
• Possibility of inconsistent delivery
• Personal conflict may render it ineffective

Best to worst candidates

• Laggard: Encouragement and cajoling can be used during training.
• Late Majority: Proof can be given of effectiveness of new product.
• Early Majority: Effective, but not cost efficient.
• Early Adopter: Effective, but not cost-efficient.
• Innovator: Effective, but not cost-efficient.

Group Training

Similar roles, attitudes, and abilities.

Abstract

Group training is one of the most common methods to start people on their journey toward new technology. Its effectiveness with the two largest groups, Early Majority and Late Majority, make it a primary tool in technology adoption.

Advantages

• Cost effective
• Time effective
• Good for team building

Disadvantages

• Single method may not work for all
• Difficult to create single learning pace for all

Best to worst candidates

• Early Majority: Receptive. The formality of group training will give confidence.
• Late Majority: Conservative attitude will be receptive to traditional training.
• Early Adopter: Receptive and attentive. Excited about the change.
• Innovator: Will tend to want to be ahead or want to move ahead of group.
• Laggard: Laggards in group training may have a negative impact.

Force

The last resort.

Abstract

The transition can’t go on forever.

At some point the new technology needs to be fully adopted and if necessary, force may have to be used.

Advantages

• Immediate full transition
• Fixed delivery timeline

Disadvantages

• Alienation of some staff
• Loss of faith in product if there are issues

Best to worst candidates

• Laggard: No choice but to adopt. Forces the issue.
• Late Majority: Removes issue of reluctance to change.
• Early Majority: Content, but worried about possible problems.
• Early Adopter: Feel less personal involvement in change process.
• Innovator: Feel less personal involvement in change process.

Contests

Abstract

Contests can generate excitement and create an explorative approach to new technology. People should not feel pressured. It should be enjoyable and not compulsory.

Advantages

• Rapid improvement of skills
• Bring excitement to the new technology
• Good for team building

Disadvantages

• Those less competitive or with lower skills may feel alienated
• May discourage collaboration

Best to worst candidates

• Early Adopter: Seeks personal success. Risk taker. Effective.
• Innovator: Enthusiastic to explore limits of technology.
• Early Majority: Less enthusiastic. Pragmatic. Less competitive.
• Late Majority: Conservative. Not enthusiastic about new technology.
• Laggard: Reluctant to get involved.

Incentives

Incentives don’t have to be large.

Abstract

For some staff, merely taking management’s lead is not enough. Using “Nudge” techniques to give that extra incentive is quite effective. Incentivizing staff either financially or through rewards, recognition, or promotion is a successful adoption technique for some.

Advantages

Encouragement to adopt from receiving tangible benefit

Draws more attention to the new technology

Disadvantages

Additional expense to business or project

Possible poor precedent for subsequent changes

Best to worst candidates

Early Adopter: Desire for personal success makes incentives enticing.

Early Majority: Prepared to change, but extra incentive will assist.

Late Majority: Conservative attitude means incentive may need to be larger.

Innovator: Enthusiasm for new technology means incentive not necessary.

Laggard: Sceptical about change. Only a large incentive likely to make a difference.

Champions

Strong internal advocates for your new technology are very powerful.

Abstract

Champions take on new technology and then use their influence to promote it in the organization. Using managers as champions to actively and vigorously promote the change is particularly effective.

Advantages

• Infectious enthusiasm encourages those who tend to be reluctant
• Use of trusted internal staff

Disadvantages

• Removes internal staff from regular duties
• Ineffective if champion not respected

Best to worst candidates

• Early Majority: Champions as references of success provide encouragement.
• Late Majority: Management champions in particular are effective.
• Laggard: Close contact with champions may be effective.
• Early Adopter: Receptive of technology, less effective.
• Innovator: No encouragement or promotion required.

Herd Mentality

Follow the crowd.

Abstract

Herd behavior is when people discount their own information and follow others. Ideally all adopters would understand the reason and advantages in adopting new technology, but practically, the result is most important.

Advantages

• New technology is adopted without question
• Increase in velocity of adoption

Disadvantages

• Staff may not have clear understanding of the reason for change and resent it later
• Some may adopt the change before they are ready to do so

Best to worst candidates

• Early Majority: Follow others’ success.
• Late Majority: Likely follow an established proven standard.
• Early Adopter: Less effective as they prefer to set trends rather than follow.
• Innovator: Seeks new technology rather than following others.
• Laggard: Suspicious and reluctant to change.

Proof of Concepts

Gain early input and encourage buy-in.

Abstract

Proof of concept projects give early indications of the viability of a new initiative. Involving the end users in these projects can be beneficial in gaining their support

Advantages

Involve adopters early on

Valuable feedback and indications of future issues

Disadvantages

If POC isn’t fully successful, it may leave lingering negativity

Usually, involvement from small selection of staff

Best to worst candidates

• Innovator: Strong interest in getting involved in new products.
• Early Adopter: Comfortable with new technology and are influencers.
• Early Majority: Less interest. Prefer others to try first.
• Late Majority: Conservative attitude makes this an unlikely option.
• Laggard: Highly unlikely to get involved.

Match techniques to categories

What works for who?

Follow the leader

Engage your technology enthusiasts early to help refine your product, train other staff, and act as champions. A combination of marketing and group training will develop a herd mentality. Finally, don’t neglect the laggards as they can prevent project completion.

Info-Tech Insight

Although there are different size categories, none can be ignored. Consider your budget when dealing with smaller groups, but also consider their impact.

Refresh, retrain, restrain

We don’t want people to revert.

Don’t assume that because your staff have been trained and have access to the new technology that they will keep using it in the way they were trained. Or that they won’t revert back to their old methods or system.

Put in place methods to remove completely or remove access to old systems. Schedule refresh training or skill enhancement sessions and stay vigilant.

Research Authors

Paul Binns

Principal Research Advisor, Info-Tech Research Group

With over 30 years in the IT industry, Paul brings to his work his experience as a Strategic Planner, Consultant, Enterprise Architect, IT Business Owner, Technologist, and Manager. Paul has worked with both small and large companies, local and international, and has had senior roles in government and the finance industry.

Scott Young

Principal Research Advisor, Info-Tech Research Group

Scott Young is a Director of Infrastructure Research at Info-Tech Research Group. Scott has worked in the technology field for over 17 years, with a strong focus on telecommunications and enterprise infrastructure architecture. He brings extensive practical experience in these areas of specialization, including IP networks, server hardware and OS, storage, and virtualization.

Related Info-Tech Research

User Group Analysis Workbook

Use Info-Tech’s workbook to gather information about user groups, business processes, and day-to-day tasks to gain familiarity with your adopters.

Governance and Management of Enterprise Software Implementation

Use our research to engage users and receive timely feedback through demonstrations. Our iterative methodology with a task list focused on the business’ must-have functionality allows staff to return to their daily work sooner.

Quality Management User Satisfaction Survey

This IT satisfaction survey will assist you with early information to use for categorizing your users.

Master Organizational Change Management Practices

Using a soft, empathetic approach to change management is something that all PMOs should understand. Use our research to ensure you have an effective OCM plan that will ensure project success.

Bibliography

Beylis, Guillermo. “COVID-19 accelerates technology adoption and deepens inequality among workers in Latin America and the Caribbean.” World Bank Blogs, 4 March 2021. Web.

Cleland, Kelley. “Successful User Adoption Strategies.” Insight Voices, 25 Apr. 2017. Web.

Hiatt, Jeff. “The Prosci ADKAR ® Model.” PROSCI, 1994. Web.

Malik, Priyanka. “The Kübler Ross Change Curve in the Workplace.” whatfix, 24 Feb. 2022. Web.

Medhaugir, Tore. “6 Ways to Encourage Software Adoption.” XAIT, 9 March 2021. Web.

Narayanan, Vishy. “What PwC Australia learned about fast tracking tech adoption during COVID-19” PWC, 13 Oct. 2020. Web.

Sridharan, Mithun. “Crossing the Chasm: Technology Adoption Lifecycle.” Think Insights, 28 Jun 2022. Web.

Applications Priorities 2023

Applications are the engine of the business: keep them relevant and modern

What we are facing today is transforming the ways in which we work, live, and relate to one another. Applications teams and portfolios MUST change to meet this reality.

Economic, social, and regulatory conditions have changed livelihoods, businesses, and marketplaces. Modern tools and technologies have acted as lifelines by minimizing operating and delivery costs, and in the process, establishing a strong foundation for growth and maturity.

As organizations continue to strengthen business continuity, disaster recovery, and system resilience, activities to simply "keep the lights on" are not enough. Be pragmatic in the prioritization and planning of your applications initiatives, and use your technologies as a foundation for your growth.

Your applications must meet the top business goals of your CXOs

• Ensure service continuity
• Improve customer experience
• Make data-driven decisions
• Maximize stakeholder value
• Manage risk

Source: CEO-CIO Alignment Diagnostics, August 2021 to July 2022, n=568.

Select and align your applications priorities to your business goals and objectives

Applications are critical components in any business strategic plan. They can directly influence an organization's internal and external brand and reputation, such as their:

• Uniqueness, competitiveness, and innovativeness in the industry.
• Ability to be dynamic, flexible, and responsive to changing expectations, business conditions, and technologies.

Therefore, business leaders are continuously looking for innovative ways to better position their application portfolios to satisfy their goals and objectives, i.e. applications priorities. Given the scope and costs often involved, these priorities must be carefully crafted to clearly state achievable business outcomes that satisfy
the different needs of very different customers, stakeholders, and users.

Today's business applications are good but leave room for improvement

72%
Average business application satisfaction score among IT leadership in 1582 organizations.

Source: CIO Business Vision, August 2021 to July 2022, N=190.

Five Applications Priorities for 2023

In this report, we explore five priorities for emerging and leading-edge technologies and practices that can improve on capabilities needed to meet the Ambitions of your organization.

Strengthen your foundations to better support your applications priorities

These key capabilities are imperative to the success of your applications strategy.

KPI and Metrics

Easily attainable and insightful measurements to gauge the progress of meeting strategic objectives and goals (KPIs), and the performance of individual teams, practices and processes (metrics).

BUSINESS ALIGNMENT

Gain an accurate understanding and interpretation of stakeholder, end-user, and customer expectations and priorities. These define the success of business products and services considering the priorities of individual business units and teams.

EFFICIENT DELIVERY & SUPPORT PRACTICE

Software delivery and support roles, processes, and tools are collaborative, well equipped and resourced, and optimized to meet changing stakeholder expectations.

Data Management & Governance

Ensuring data is continuously reliable and trustworthy. Data structure and integrations are defined, governed, and monitored.

Product & Service Ownership

Complete inventory and rationalization of the product and service portfolio, prioritized backlogs, roadmaps, and clear product and service ownership with good governance. This helps ensure this portfolio is optimized to meet its goals and objectives.

Strengthen your foundations to better support your applications priorities (cont'd)

These key capabilities are imperative to the success of your applications strategy.

Organizational Change Management

Manage the adoption of new and modified processes and technologies considering reputational, human, and operational concerns.

IT Operational Management

Continuous monitoring and upkeep of products and services to assure business continuity, and system reliability, robustness and disaster recovery.

Architectural Framework

A set of principles and standards that guides the consistent, sustainable and scalable growth of enterprise technologies. Changes to the architecture are made in collaboration with affected parties, such as security and infrastructure.

Application Security

The measures, controls, and tactics at the application layer that prevent vulnerabilities against external and internal threats and ensure compliance to industry and regulatory security frameworks and standards.

There are many factors that can stand in your team's way

Expectations on your applications team have increased, while the gap between how stakeholders and applications teams perceive effectiveness remains wide. This points to a need to clarify the requirements to deliver valuable and quality applications and address the pressures challenging your teams.

1. Attracting and retaining talent
2. Maximizing the return on technology
3. Confidently shifting to digital
4. Addressing competing priorities
5. Fostering a collaborative culture
6. Creating high-throughput teams

CIOs agree that at least some improvement is needed across key IT activities

Source: CEO-CIO Alignment Diagnostics, August 2021 to July 2022, n=568.

Pressure Point 1:
Attracting and Retaining Talent

Recent environmental pressures impacted traditional working arrangements and showed more workplace flexibility is often possible. At the same time, many employees' expectations about how, when, and where they choose to work have also evolved. Recruitment and retention are reflections of different sides of the same employee value proposition coin. Organizations that fail to reinvent their approach to attracting and retaining talent by focusing on candidate and employee experience risk turnover, vacancies, and lost opportunities that can negatively impact the bottom line.

Address the underlying challenges

• Lack of employee empowerment and few opportunities for learning and development.
• Poor coworker and manager relationships.
• Compensation and benefits are inadequate to maintain desired quality of life.
• Unproductive work environment and conflicting balance of work and life.
• Unsatisfactory employee experience, including lack of employee recognition
  and transparency of organizational change.

While workplace flexibility comes with many benefits, longer work hours jeopardize wellbeing.
62% of organizations reported increased working hours, while 80% reported an increase in flexibility.
Source: McLean & Company, 2022; n=394.

Be strategic in how you fill and train key IT skills and capabilities

• Cybersecurity
• Big Data/Analytics
• Technical Architecture
• DevOps
• Development
• Cloud

Source: Harvey Nash Group, 2021; n=2120.

Pressure Point 2:
Maximizing the Return of Technology

Recent environmental pressures impacted traditional working arrangements and showed more workplace flexibility is often possible. At the same time, many employees' expectations about how, when, and where they choose to work have also evolved. Recruitment and retention are reflections of different sides of the same employee value proposition coin. Organizations that fail to reinvent their approach to attracting and retaining talent by focusing on candidate and employee experience risk turnover, vacancies, and lost opportunities that can negatively impact the bottom line.

Address the underlying challenges

• Inability to analyze, propose, justify, and communicate modernization solutions in language the stakeholders understand and in a way that shows they clearly support business priorities and KPIs and mitigate risks.
• Little interest in documenting and rationalizing products and services through business-IT collaboration.
• Lack of internal knowledge of the system and loss of vendor support.
• Undefined, siloed product and service ownership and governance, preventing solutions from working together to collectively deliver more value.
• Little stakeholder appetite to invest in activities beyond "keeping the lights on."

Only 64% of applications were identified as effective by end users.
Effective applications are identified as at least highly important and have high feature and usability satisfaction.
Source: Application Portfolio Assessment, August 2021 to July 2022; N=315.

"Regardless of the many definitions of modernization floating around, the one characteristic that we should be striving for is to ensure our applications do an outstanding job of supporting the users and the business in the most effective and efficient manner possible."
Source: looksoftware.

Pressure Point 3:
Confidently Shifting to Digital

"Going digital" reshapes how the business operates and drives value by optimizing how digital and traditional technologies and tactics work together. This shift often presents significant business and technical risks to business processes, enterprise data, applications, and systems which stakeholders and teams are not aware of or prepared to accommodate.

Address the underlying challenges

• Differing perspectives on digital can lead to disjointed transformation initiatives, oversold benefits, and a lack of synergy among digital technologies and processes.
• Organizations have difficulty adapting to new technologies or rethinking current business models, processes, and ways of working because of the potential human, ethical, and reputational impacts and restrictions from legacy systems.
• Management lacks a framework to evaluate how their organization manages and governs business value delivery.
• IT is not equipped or resourced to address these rapidly changing business, customer, and technology needs.
• The wrong tools and technologies were chosen to support the shift to digital.

The shift to digital processes is starting, but slowly.
62% of respondents indicated that 1-20% of their processes were digitized during the past year.
Source: Tech Trends and Priorities 2023; N=500

Resistance to change and time/budget constraints are top barriers preventing companies from modernizing their applications.
Source: Konveyor, 2022; n=600.

Pressure Point 4:
Addressing Competing Priorities

Enterprise products and services are not used, operated, or branded in isolation. The various parties involved may have competing priorities, which often leads to disagreements on when certain business and technology changes should be made and how resources, budget, and other assets should be allocated. Without a broader product vision, portfolio vision, and roadmap, the various dependent or related products and services will not deliver the same level of value as if they were managed collectively.

Address the underlying challenges

• Undefined product and service ownership and governance, including escalation procedures when consensus cannot be reached.
• Lack of a unified and grounded set of value and quality definitions, guiding principles, prioritization standards, and broad visibility across portfolios, business capabilities, and business functions.
• Distrust between business units and IT teams, which leads to the scaling of unmanaged applications and fragmented changes and projects.
• Decisions are based on opinions and experiences without supporting data.

55% of CXOs stated some improvement is necessary in activities to understand business goals.
Source: CEO-CIO Alignment Diagnostics, August 2021 to July 2022; n=568.

CXOs are moderately satisfied with IT's performance as a business partner (average score of 69% among all CXOs). This sentiment is similarly felt among CIOs (64%).
Source: CEO-CIO Alignment Diagnostics, August 2021 to July 2022; n=568.

Pressure Point 5:
Fostering a Collaborative Culture

Culture impacts business results, including bottom-line revenue and productivity metrics. Leaders appreciate the impact culture can have on applications initiatives and wish to leverage this. How culture translates from an abstract concept to something that is measurable and actionable is not straightforward. Executives need to clarify how the desired culture will help achieve their applications strategy and need to focus on the items that will have the most impact.

Address the underlying challenges

• Broad changes do not consider the unique subcultures, personalities, and behaviors of the various teams and individuals in the organization.
• Leaders mandate cultural changes without alleviating critical barriers and do not embody the principles of the target state.
• Bureaucracy and politics restrict changes and encourage the status quo.
• Industry standards, technologies, and frameworks do not support or cannot be tailored to fit the desired culture.
• Some teams are deliberately excluded from the scoping, planning, and execution of key product and service delivery and management activities.

Agile does not solve team culture challenges.
43% of organizations cited organizational culture as a significant barrier to adopting and scaling Agile practices.
Source: Digital.ai, 2021.

"Providing a great employee experience" as the second priority (after recruiting) highlights the emphasis organizations are placing on helping employees adjust after having been forced to change the way work gets done.
Source: McLean & Company, 2022; N=826.

Use your applications priorities to help address your pressure points

Success can be dependent on your ability to navigate around or alleviate your pressure points. Design and market your applications priorities to bring attention to your pressure points and position them as key risk factors to their success.

Digital Experience (DX)

PRIORITY 1

• Deliver Valuable User, Customer, Employee, and Brand Experiences

Delivering valuable digital experiences requires the adoption of good management, governance, and operational practices to accommodate stakeholder, employee, customer, and end-user expectations of digital experiences (e.g. product management, automation, and iterative delivery). Technologies are chosen based on what best enables, delivers, and supports these expectations.

Introduction

Digital transformation is not just about new tools and technologies. It is also about delivering a valuable digital experience

What is digital experience (DX)?

Digital experience (DX) refers to the interaction between a user and an organization through digital products and services. Digital products and services are tools, systems, devices, and resources that gather, store, and process data; are continuously modernized; and embody eight key attributes that are described on the following slide. DX is broken down into four distinct perspectives*:

• Customer Experience – The immediate perceptions of transactions and interactions experienced through a customer's journey in the use of the organization's digital
  products and services.
• End-User Experience – Users' emotions, beliefs, and physical and psychological responses
  that occur before, during, or after interacting with a digital product or service.
• Brand Experience – The broader perceptions, emotions, thoughts, feelings and actions the public associate with the organization's brand and reputation or its products and services. Brand experience evolves over time as customers continuously engage with the brand.
• Employee Experience – The satisfaction and experience of an employee through their journey with the organization, from recruitment and hiring to their departure. How an employee embodies and promotes the organization brand and culture can affect their performance, trust, respect, and drive to innovate and optimize.

Digital products and services have a common set of attributes

Digital transformation is not just about new tools and technologies. It is also about delivering a valuable digital experience

• Digital products and services must keep pace with changing business and end-user needs as well as tightly supporting your maturing business model with continuous modernization. Focus your continuous modernization on the key characteristics that drive business value.
• Fit for purpose: Functionalities are designed and implemented for the purpose of satisfying the end user's needs and solving their problems.
• User-centric: End users see the product as rewarding, engaging, intuitive, and emotionally satisfying. They want to come back to it.
• Adaptable: The product can be quickly tailored to meet changing end-user and technology needs with reusable and customizable components.
• Accessible: The product is available on demand and on the end user's preferred interface.
  End users have a seamless experience across all devices.
• Private and secured: The end user's activity and data are protected from unauthorized access.
• Informative and insightful: The product delivers consumable, accurate, and trustworthy real-time data that is important to the end user.
• Seamless application connection: The product facilitates direct interactions with one or more other products through an uninterrupted user experience.
• Relationship and network building: The product enables and promotes the connection and interaction of people.

Signals

DX is critical for business growth and maturity, but the organization may not be ready

A good DX has become a key differentiator that gives organizations an advantage over their competition and peers. Shifts in working environments; employee, customer, and stakeholder expectations; and the advancements in modern technologies have raised the importance of adopting and transitioning to digital processes and tools to stay relevant and responsive to changing business and technology conditions.

Applications teams are critical to ensuring the successful delivery and operation of these digital processes and tools. However, they are often under-resourced and challenged to meet their DX goals.

• 7% of both business and IT respondents think IT has the resources needed to keep up with digital transformation initiatives and meet deadlines (Cyara, 2021).
• 43% of respondents said that the core barrier to digital transformation is a lack of skilled resources (Creatio, 2021).

	of organizations stated that at least 1% of processes were shifted from being manually completed to digitally completed in the last year. 29% of organizations stated at least 21% were shifted. Source: Tech Trends and Priorities 2023; N=500.
	of organizations recognized digital transformation is important for competitive advantage. 94% stated it is important to enhance customer experience, and 91% stated it will have a positive impact on revenue. Source: Cyara, 2021.

Drivers

Brand and reputation

Customers are swayed by the innovations and advancements in digital technologies and expect your applications team to deliver and support them. Your leaders recognize the importance of these expectations and are integrating them into their business strategy and brand (how the organization presents itself to its customers, employees and the public). They hope that their actions will improve and shape the company's reputation (public perception of the company) as effective, customer-focused, and forward-thinking.

Worker productivity

As you evolve and adopt more complex tools and technology, your stakeholders will expect more from business units and IT teams. Unfortunately, teams employing manual processes and legacy systems will struggle to meet these expectations. Digital products and services promote the simplification of complex operations and applications and help the business and your teams better align operational practices with strategic goals and deliver valuable DX.

Organization modernization

Legacy processes, systems, and ways of working are no longer suitable for meeting the strategic digital objectives and DX needs stakeholders expect. They drive up operational costs without increased benefits, impede business growth and innovation, and consume scarce budgets that could be used for other priorities. Shifting to digital tools and technologies will bring these challenges to light and demonstrate how modernization is an integral part of DX success.

Benefits & Risks

Benefits

• Flexibility & Satisfaction
• Adoption
• Reliability

Employees and customers can choose how they want to access, modify, and consume digital products and services. They can be tailored to meet the specific functional needs, behaviors, and habits of the end user.

The customer, end user, brand, and employee drive selection, design, and delivery of digital products and services. Even the most advanced technologies will fail if key roles do not see the value in their use.

Digital products and services are delivered with technical quality built into them, ensuring they meet the industry, regulatory, and company standards throughout their lifespan and in various conditions.

Risks

• Legacy & Lore
• Bureaucracy & Politics
• Process Inefficiencies
• No Quality Standards

Some stakeholders may not be willing to change due to their familiarity and comfort of business practices.

Competing and conflicting priorities of strategic products and services undermine digital transformation and broader modernization efforts.

Business processes are often burdened by wasteful activities. Digital products and services are only as valuable as the processes they support.

The performance and support of your digital products and services are hampered due to unmanageable technical debt because of a deliberate decision to bypass or omit quality good practices.

Address your pressure points to fully realize the benefits of this priority

Success can be dependent on your ability to address your pressure points.

Recommendations

Build a digital business strategy

A digital business strategy clearly articulates the goals and ambitions of the business to adopt digital practices, tools, and technologies. This document:

• Looks for ways to transform the business by identifying what technologies to embrace, what processes to automate, and what new business models to create.
• Unifies digital possibilities with your customer experiences.
• Establishes accountability with the executive leadership.
• States the importance of cross-functional participation from senior management across the organization.

Related Research:

• Define Your Digital Business Strategy

Learn, understand, and empathize with your users, employees, and customers

• To create a better product, solution, or service, understanding those who use it, their needs, and their context is critical.
• A great experience design practice can help you balance those goals so that they are in harmony with those of your users.
• IT leaders must find ways to understand the needs of the business and develop empathy on a much deeper level. This empathy is the foundation for a thriving business partnership.

Related Research:

• Apply Design Thinking to Build Empathy With the Business
• Implement and Mature Your User Experience Design Practice

Recommendations

Center product and service delivery decisions and activities on DX and quality

User, customer, employee, and brand are integral perspectives on the software development lifecycle (SDLC) and the management and governance practices supporting digital products and services. It ensures quality standards and controls are consistently upheld while maintaining alignment with various needs and priorities. The goal is to come to a consensus on a universal definition and approach to embed quality and DX-thinking throughout the delivery process.

Related Research:

• Modernize Your SDLC
• Make the Case for Product Delivery
• Build a Software Quality Assurance Program

Instill collaborative delivery practices

Today's rapidly scaling and increasingly complex digital products and services create mounting pressure on delivery teams to release new features and changes quickly and with sufficient quality. This pressure is further compounded by the competing priorities of individual stakeholders and the nuances among different personas of digital products and services.

A collaborative delivery practice sets the activities, channels, and relationships needed to deliver a valuable and quality product or service with cross-functional awareness, accountability, and agreement.

Related Research:

• Implement Agile Practices That Work
• Implement DevOps Practices That Work
• Build Your BizDevOps Playbook

Recommendations

Continuously monitor and modernize your digital products and services

Today's modern digital products and services are tomorrow's shelfware. They gradually lose their value, and the supporting technologies will become obsolete. Modernization is a continuous need.

Data-driven insights help decision makers decide which products and services to retire, upgrade, retrain on, or maintain to meet the demands of the business.

Enhancements focusing on critical business capabilities strengthen the case for investment and build trust with all stakeholders.

Related Research:

• Application Portfolio Assessment: End User Feedback
• Application Portfolio Management Foundations
• Modernize Your Applications

CASE STUDY
Mastercard in Asia

Focus on the customer journey

Chief Marketing Officer M.V. Rajamannar (Raja) wanted to change Mastercard's iconic "Priceless" ad campaign (with the slogan "There are some things money can't buy. For everything else there's Mastercard."). The main reasons were that the campaign relied on one-way communication and targeted end customers, even though Mastercard doesn't issue cards directly to customers; partner banks do. To drive the change in campaign, Raja and his team created a digital engine that leveraged digital and social media. Digital engine is a seven-step process based on insights gleaned from data and real-time optimization.

1. Emotional spark: Using data to understand customers' passion points, Mastercard builds videos and creatives to ignite an emotional spark and give customers a reason to engage. For example, weeks before New Year's Eve, Mastercard produced a video with Hugh Jackman to encourage customers to submit a story about someone who deeply mattered to them. The authors of the winning story would be flown to reunite with those both distant and dear.
2. Engagement: Mastercard targets the right audience with a spark video through social media to encourage customers to share their stories.
3. Offers: To help its partner banks and merchants in driving their business, the company identifies the best offers to match consumers' interests. In the above campaign, Mastercard's Asia-Pacific team found that Singapore was a favorite destination for Indian customers, so they partnered with Singapore's Resorts World Sentosa with an attractive offer.
4. Real-time optimization: Mastercard optimizes, in real time, a portfolio of several offers through A/B testing and other analysis.
5. Amplification: Real-time testing provides confidence to Mastercard about the potential success of these offers and encourages its bank and merchant partners to co-market and co-fund these campaigns.
6. Network effects: A few weeks after consumers submitted their stories about distant loved ones, Mastercard selected winners, produced videos of them surprising their friends and families, and used these videos in social media to encourage sharing.
7. Incremental transactions: These programs translate into incremental business for banks who issue cards, for merchants where customers spend money, and for Mastercard, which gets a portion of every transaction.

Source: Harvard Business Review Press

CASE STUDY
Mastercard in Asia (cont'd)

Focus on the customer journey

1. Emotional Spark
   Drives genuine personal stories
2. Engagement
   Through Facebook
   and social media
3. Offers
   From merchants
   and Mastercard assets
4. Optimization
   Real-time testing of offers and themes
5. Amplification
   Paid and organic programmatic buying
6. Network Effects
   Sharing and
   mass engagement
7. Incremental Transactions
   Win-win for all parties

CASE STUDY
Mastercard in Asia (cont'd)

The Mastercard case highlights important lessons on how to engage customers:

• Have a broad message. Brands need to connect with consumers over how they live and spend their time. Organizations need to go beyond the brand or product message to become more relevant to consumers' lives. Dove soap was very successful in creating a conversation among consumers with its "Real Beauty" campaign, which focused not on the brand or even the product category, but on how women and society view beauty.
• Shift from storytelling to story making. To break through the clutter of advertising, companies need to move from storytelling to story making. A broader message that is emotionally engaging allows for a two-way conversation.
• Be consistent with the brand value. The brand needs to stand for something, and the content should be relevant to and consistent with the image of the brand. Pepsi announced an award of $20 million in grants to individuals, businesses, and nonprofits that promote a new idea to make a positive impact on community. A large number of submissions were about social causes that had nothing to do with Pepsi, and some, like reducing obesity, were in conflict with Pepsi's product.
• Create engagement that drives business. Too much entertainment in ads may engage customers but detract from both communicating the brand message and increasing sales. Simply measuring the number of video views provides only a partial picture of a program's success.

Intelligent Automation

PRIORITY 2

• Extend Automation Practices with AI and ML

AI and ML are rapidly growing. Organizations see the value of machines intelligently executing high-performance and dynamic tasks such as driving cars and detecting fraud. Senior leaders see AI and ML as opportunities to extend their business process automation investments.

Introduction

Intelligent automation is the next step in your business process automation journey

What is intelligent automation (IA)?

Intelligent automation (IA) is the combination of traditional automation technologies, such as business process management (BPM) and robotic process automation (RPA), with AI and ML. The goal is to further streamline and scale decision making across various business processes by:

• Removing human interactions.
• Addressing decisions that involve complex variables.
• Automatically adapting processes to changing conditions.
• Bridging disparate automation technologies into an integrated end-to-end value delivery pipeline.

"For IA to succeed, employees must be involved in the transformation journey so they can experience firsthand the benefits of a new way of working and creating business value," (Cognizant).

What is the difference between IA and hyperautomation?

"Hyperautomation is the act of automating everything in an organization that can be automated. The intent is to streamline processes across an organization using intelligent automation, which includes AI, RPA and other technologies, to run without human intervention. … Hyperautomation is a business-driven, disciplined approach that organizations use to rapidly identify, vet, and automate as many business and IT processes as possible" (IBM, 2021).

Note that hyperautomation often enables IA, but teams solely adopting IA do not need to abide to its automation-first principles.

IA is a combination of various tools and technologies

What tools and technologies are involved in IA?

• Artificial intelligence (AI) & Machine Learning (ML) – AI systems perform tasks mimicking human intelligence such as learning from experience and problem solving. AI is making its own decisions without human intervention. Machine learning systems learn from experience and without explicit instructions. They learn patterns from data then analyze and make predictions based on past behavior and the patterns learned. AI is a combination of technologies and can include machine learning.
• Intelligent Business Process Management System (iBPMS) – Combination of BPM tools with AI and other intelligence capabilities.
• Robotic Process Automation (RPA) – Robots leveraging an application's UI rather than programmatic access. Automate rules-based, repetitive tasks performed by human workers with AI/ML.
• Process Mining & Discovery – Process mining involves reading system event logs and application transactions and applying algorithmic analysis to automatically identify and map inferred business processes. Process discovery involves unintrusive virtual agents that sit on a user's desktop and record and monitor how they interact with applications to perform tasks and processes. Algorithms are then used to map and analyze the processes.
• Intelligent Document Processing – The conversion of physical or unstructured documents into a structured, digital format that can be used in automation solutions. Optical character recognition (OCR) and natural language processing (NPL) are common tools used to enable this capability.
• Advanced Analytics – The gathering, synthesis, transformation, and delivery of insightful and consumable information that supports data-driven decision making. Data is queried from various disparate sources and can take on a variety of structured and unstructured formats.

Signals

Process automation is an executive priority and requires organizational buy-in

Stakeholders recognize the importance of business process automation and AI and are looking for ways to deliver more value using these technologies.

• 90% of executives stated automating business workflows post-COVID-19 will ensure business continuity (Kofax, 2022).
• 88% of executives stated they need to fast-track their end-to-end digital transformation (Kofax, 2022).

However, the advertised benefits to vendors of enabling these desired automations may not be easily achievable because of:

• Manual and undocumented business processes.
• Fragmented and inaccessible systems.
• Poor data quality, insights, and security.
• The lack of process governance and management practice.

	of CXOs stated staff sufficiency, skill and engagement issues as a minor IT pain point compared to 51% of CIOs stated this issue as a major pain point. Source: CEO-CIO Alignment Diagnostics, August 2021 to July 2022; n=568.
	of organizations have already invested in AI or machine learning. Source: Tech Trends and Priorities 2023; N=662

Drivers

Quality & throughput

Products and services delivered through an undefined and manual process risk the creation of preventable and catchable defects, security flaws and holes, missing information, and other quality issues. IA solutions consistently reinforce quality standards the same way across all products and services while tailoring outputs to meet an individual's specific needs. Success is dependent on the accurate interpretation and application of quality standards and the user's expectations.

Worker productivity

IA removes the tedious, routine, and mundane tasks that distract and restrict employees from doing more valuable, impactful, and cognitively focused activities. Practical insights can also be generated through IA tools that help employees make data-driven decisions, evaluate problems from different angles, and improve the usability and value of the products and services they produce.

Good process management practices

Automation magnifies existing inefficiencies of a business process management practice, such as unclear and outdated process documentation and incorrect assumptions. IA reinforces the importance of good business process optimization practices, such as removing waste and inefficiencies in a thoughtful way, choosing the most appropriate automation solution, and configuring the process in the right way to maximize the solution's value.

Benefits & Risks

Benefits

• Documentation
• Hands-Off
• Reusability

All business processes must be mapped and documented to be automated, including business rules, data entities, applications, and control points.

IA can be configured and orchestrated to automatically execute when certain business, process, or technology conditions are met in an unattended or attended manner.

IA is applicable in use cases beyond traditional business processes, such as automated testing, quality control, audit, website scraping, integration platform, customer service, and data transfer.

Risks

• Data Quality & Bias
• Ethics
• Recovery & Security
• Management

The accuracy and relevance of the decisions IA makes are dependent on the overall quality of the data
used to train it.

Some decisions can have significant reputational, moral, and ethical impacts if made incorrectly.
The question is whether it is appropriate for a non-human to make that decision.

IA is composed of technologies that can be compromised or fail. Without the proper monitoring, controls,
and recovery protocols, impacted IA will generate significant business and IT costs and can potentially harm customers, employees, and the organization.

Low- and no-code capabilities ease and streamline IA development, which makes it susceptible to becoming unmanageable. Discipline is needed to ensure IA owners are aware of the size and health of the IA portfolio.

Address your pressure points to fully realize the benefits of this priority

Success can be dependent on your ability to address your pressure points.

Recommendations

Build your business process automation playbook and practice

Formalize your business process automation practice with a good toolkit and a repeatable set of tactics and techniques.

• Clarify the problem being solved with IA.
• Optimate your processes. Apply good practices to first optimize (opti-) and then automate (-mate) key business processes.
• Deliver minimum viable automations (MVAs). Maximize the learning of automation solutions and business operational changes through small, strategic automation use cases.

Related Research:

• Build a Winning Business Process Automation Playbook

Explore the various IA tooling options

Each IA tool will address a different problem. Which tool to choose is dependent on a variety of factors, such as functional suitability, technology suitability, delivery and support capabilities, alignment to strategic business goals, and the value it is designed to deliver.

Related Research:

• Build Your First RPA Bot
• Build a Chatbot Proof of Concept

Recommendations

Introduce AI and ML thoughtfully and with a plan

Despite the many promises of AI, organizations are struggling to fully realize its potential. The reasons boil down to a lack of understanding of when these technologies should and shouldn't be used, as well as a fear of the unknown. The plan to adopt AI should include:

• Understanding of what AI really means in practice.
• Identifying specific applications of AI in the business.
• Understanding the type of AI applicable for the situation.

Related Research:

• Get Started with Artificial Intelligence
• Create an Architecture for AI

Mitigate AI and ML bias

Biases can be introduced into an IA system at any stage of the development process, from the data you collect, to the way you collect it, to which algorithms are used and what assumptions were made. In most cases, AI and ML bias is a is a social, political, and business problem.

While bias may not be intentional nor completely prevented or eliminated, early detection, good design, and other proactive preventative steps can be taken to minimize its scope and impact.

Related Research:

• Mitigate Machine Bias

CASE STUDY
University Hospitals

Challenge

University Hospitals Cleveland (UH) faces the same challenge that every major hospital confronts regarding how to deliver increasingly complex, high-quality healthcare to a diverse population efficiently and economically. In 2017, UH embarked on a value improvement program aiming to improve quality while saving $400 million over a five-year period.

In emergency department (ED) and inpatient units, leaders found anticipating demand difficult, and consequently units were often over-staffed when demand was low and under-staffed when demand was high. Hospital leaders were uncertain about how to reallocate resources based on capacity needs.

Solution

UH turned to Hospital IQ's Census Solution to proactively manage capacity, staff, and flow in the ED and inpatient areas.

By applying AI, ML, and external data (e.g. weather forecasts) to the hospital's own data (including EMR data and hospital policies), the solution helped UH make two-day census forecasts that managers used to determine whether to open or close in-patient beds and, when necessary, divert low-acuity patients to other hospitals in the system to handle predicted patient volume.

Source: University Hospitals

Results

ED boarding hours have declined by 10% and the hospital has seen a 50% reduction in the number of patients who leave the hospital without
being seen.

UH also predicts in advance patients ready for discharge and identifies roadblocks, reducing the average length of stay by 15%. UH is able to better manage staff, reducing overtime and cutting overall labor costs.

The hospital has also increased staff satisfaction and improved patient safety by closing specific units on weekends and increasing the number of rooms that can be sterilized.

Proactive Application Management

PRIORITY 3

• Strengthen Applications to Prevent and Minimize the Impact of Future Issues

Application management is often viewed as a support function rather than an enabler of business growth. Focus and investments are only placed on application management when it becomes a problem. The lack of governance and practice accountability leaves this practice in a chaotic state: politics take over, resources are not strategically allocated, and customers are frustrated. As a result, application management is often reactive and brushed aside for new development.

Introduction

What is application management?

Application management ensures valuable software is successfully delivered and is maintained for continuous and sustainable business operations. It contains a repeatable set of activities needed to rationalize and roadmap products and services while balancing priorities of new features and maintenance tasks.

Unfortunately, application management is commonly perceived as a practice that solely addresses issues, updates, and incidents. However, application management teams are also tasked with new value delivery that was not part of the original release.

Why is an effective application maintenance (reactive) practice not good enough?

Application maintenance is the "process of modifying a software system or its components after delivery to correct faults, improve performance or other attributes, or adapt to a changed environment or business process," (IEEE, 1998). While it is critical to quickly fix defects and issues when they occur, reactively addressing them is more expensive than discovering them early and employing the practices to prevent them.

Even if an application is working well, its framework, architecture, and technology may not be compatible with the possible upcoming changes stakeholders and vendors may want to undertake. Applications may not be problems now, but they soon can be.

What motivates proactive application changes?

Proactive application management must be disciplined and applied strategically

Proactive application management practices are critical to maintaining business continuity. They require continuous review and modification so that applications are resilient and can address current and future scenarios. Depending on the value of the application, its criticality to business operations, and its susceptibility to technology change, a more proactive management approach may be warranted. Stakeholders can then better manage resources and budget according to the needs of specific products.

Reactive Management

Run-to-Failure

Fix and enhance the product when it breaks. In most cases, a plan is in place ahead of a failure, so that the problem can be addressed without significant disruption and costs.

Preventive

Regularly inspect and optimize the product to reduce the likelihood that it will fail in the future. Schedule inspections based on a specific timeframe or usage threshold.

Predictive

Predict failures before they happen using performance and usage data to alert teams when products are at risk of failure according to specified conditions.

Reliability and Risk Based

Analyze all possible failure scenarios for each component of the product and create tailored delivery plans to improve the stability, reliability, and value of each product.

Proactive Management

Signals

Applications begin to degrade as soon as they are used

Today's applications are tomorrow's shelfware. They gradually lose their value, stability, robustness, and compatibility with other enterprise technologies. The longer these applications are left unattended or simply "keeping the lights on," the more risks they will bring to the application portfolio, such as:

• Discovery and exploitation of security flaws and gaps.
• Increasing the lock-in to specific vendor technologies.
• Inconsistent application performance across various workloads.

These impacts are further compounded by the continuous work done on a system burdened with technical debt. Technical debt describes the result of avoided costs that, over time, cause ongoing business impacts. Left unaddressed, technical debt can become an existential threat that risks your organization's ability to effectively compete and serve its customers. Unfortunately, most organizations have a significant, growing, unmanageable technical debt portfolio.

	of respondents stated they saw an increase in perceived change in technical debt during the past three years. A quarter of respondents indicated that it stayed the same. Source: McKinsey Digital, 2020.
US $4.35 Million	is the average cost of a data breach in 2022. This figure represents a 2.6% increase from last year. The average cost has climbed 12.7% since 2020. Source: IBM, 2022; N=537.

Drivers

Technical debt

Historical decisions to meet business demands by deferring key quality, architectural, or other software delivery activities often lead to inefficient and incomplete code, fragile legacy systems, broken processes, data quality problems, and the other contributors to technical debt. The impacts for this challenge is further heightened if organizations are not actively refactoring and updating their applications behind the scenes. Proactive application management is intended to raise awareness of application fragility and prioritize comprehensive refactoring activities alongside new feature development.

Long-term application value

Applications are designed, developed, and tested against a specific set of parameters which may become less relevant over time as the business matures, technology changes, and user behaviors and interactions shift. Continuous monitoring of the application system, regular stakeholder and user feedback, and active technology trend research and vendor engagement will reveal tasks to prepare an application for future value opportunities or stability and resilience concerns.

Security and resiliency

Innovative approaches to infiltrating and compromising applications are becoming prevailing stakeholder concerns. The loopholes and gaps in existing application security protocols, control points, and end-user training are exploited to gain the trust of unsuspecting users and systems. Proactive application management enforces continuous security reviews to determine whether applications are at risk. The goal is to prevent an incident from happening by hardening or complementing measures already in place.

Benefits & Risks

Benefits

• Consistent Performance
• Robustness
• Operating Costs

Users expect the same level of performance and experience from their applications in all scenarios. A proactive approach ensures the configurations meet the current needs of users and dependent technologies.

Proactively managed applications are resilient to the latest security concerns and upcoming trends.

Continuous improvements to the underlying architecture, codebase, and interfaces can minimize the cost to maintain and operate the application, such as the transition to a loosely coupled architecture and the standardization of REST APIs.

Risks

• Stakeholder Buy-In
• Delayed Feature Releases
• Team Capacity
• Discipline

Stakeholders may not see the association between the application's value and its technical quality.

Updates and enhancements are system changes much like any application function. Depending
on the priority of these changes, new functions may be pushed off to a future release cycle.

Applications teams require dedicated capacity to proactively manage applications, but they are often occupied meeting other stakeholder demands.

Overinvesting in certain application management activities (such as refactoring, re-architecture, and redesign) can create more challenges. Knowing how much to do is important.

Address your pressure points to fully realize the benefits of this priority

Success can be dependent on your ability to address your pressure points.

Recommendations

Reinforce your application maintenance practice

Maintenance is often viewed as a support function rather than an enabler of business growth. Focus and investments are only placed on maintenance when it becomes a problem.

• Justify the necessity of streamlined maintenance.
• Strengthen triaging and prioritization practices.
• Establish and govern a repeatable process.

Ensure product issues, incidents, defects, and change requests are promptly handled to minimize business and IT risks.

Related Research:

• Streamline Application Maintenance

Build an application management practice

Apply the appropriate management approaches to maintain business continuity and balance priorities and commitments among maintenance and new development requests.

This practice serves as the foundation for creating exceptional customer experience by emphasizing cross-functional accountability for business value and product and service quality.

Related Research:

• Streamline Application Management

Recommendations

Manage your technical debt

Technical debt is a type of technical risk, which in turn is business risk. It's up to the business to decide whether to accept technical debt or mitigate it. Create a compelling argument to stakeholders as to why technical debt should be a business priority rather than just an IT one.

• Define and identify your technical debt.
• Conduct a business impact analysis.
• Identify opportunities to better manage technical debt.

Related Research:

• Manage Your Technical Debt

Gauge your application's health

Application portfolio management is nearly impossible to perform without an honest and thorough understanding of your portfolio's alignment to business capabilities, business value, total cost of ownership, end-user reception and satisfaction, and technical health.

Develop data-driven insights to help you decide which applications to retire, upgrade, retrain on, or maintain to meet the demands of the business.

Related Research:

• Application Portfolio Management Foundations

Recommendations

Adopt site reliability engineering (SRE) and DevOps practices

Site reliability engineering (SRE) is an operational model for running online services more reliably by a team of dedicated reliability-focused engineers.

DevOps, an operational philosophy promoting development and operations collaboration, can bring the critical insights to make application management practices through SRE more valuable.

Related Research:

• Implement DevOps Practices That Work
• Site Reliability Engineering: What Is It? Why Is It Important for Online Businesses?
• SLOs in Site Reliability Engineering

CASE STUDY
Government Agency

Goal

A government agency needed to implement a disciplined, sustainable application delivery, planning, and management process so their product delivery team could deliver features and changes faster with higher quality. The goal was to ensure change requests, fixes, and new features would relieve requester frustrations, reduce regression issues, and allow work to be done on agreeable and achievable priorities organization-wide. The new model needed to increase practice efficiency and visibility in order to better manage technical debt and focus on value-added solutions.

Solution

This organization recognized a number of key challenges that were inhibiting its team's ability to meet its goals:

• The product backlog had become too long and unmanageable.
• Delivery resources were not properly allocated to meet the skills and capabilities needed to successfully meet commitments.
• Quality wasn't defined or enforced, which generated mounting technical debt.
• There was a lack of clear metrics and defined roles and responsibilities.
• The business had unrealistic and unachievable expectations.

Source: Info-Tech Workshop

Key practices implemented

• Schedule quarterly business satisfaction surveys.
• Structure and facilitate regular change advisory board meetings.
• Define and enforce product quality standards.
• Standardize a streamlined process with defined roles.
• Configure management tools to better handle requests.

Multisource Systems

PRIORITY 4

• Manage an Ecosystem Composed of In-House and Outsourced Systems

Various market and company factors are motivating a review on resource and system sourcing strategies. The right sourcing model provides key skills, resources, and capabilities to meet innovation, time to market, financial, and quality goals of the business. However, organizations struggle with how best to support sourcing partners and to allocate the right number of resources to maximize success.

Introduction

A multisource system is an ecosystem of integrated internally and externally developed applications, data, and infrastructure. These technologies can be custom developed, heavily configured vendor solutions, or they may be commercial off-the-shelf (COTS) solutions. These systems can also be developed, supported, and managed by internal staff, in partnership with outsourced contractors, or be completely outsourced. Multisource systems should be configured and orchestrated in a way that maximizes the delivery of specific value drivers for the targeted audience.

Successfully selecting a sourcing approach is not a simple RFP exercise to choose the lowest cost

Defining and executing a sourcing approach can be a significant investment and risk because of the close interactions third-party services and partners will have with internal staff, enterprise applications and business capabilities. A careful selection and design is necessary.

The selection of a sourcing partner is not simple. It involves the detailed inspection and examination of different candidates and matching their fit to the broader vision of the multisource system. In cases where control is critical, technology stack and resource sourcing consolidation to a few vendors and partners is preferred. In other cases, where worker productivity and system flexibility are highly prioritized, a plug-and-play best-of-breed approach is preferred.

Sourcing needs to be driven by your department and system strategies

How does the department want to be perceived?

The image that your applications department and teams want to reflect is frequently dependent on the applications they deliver and support, the resources they are composed of, and the capabilities they provide.

Therefore, choosing the right sourcing approach should be driven by understanding who the teams are and want to be (e.g. internal builder, an integrator, a plug-in player), what they can or want to do (e.g. custom-develop or implement), and what they can deliver or support (e.g. cloud or on-premises) must be established.

What value is the system delivering?

Well-integrated systems are the lifeblood of your organization. They provide the capabilities needed to deliver value to customers, employees, and stakeholders. However, underlying system components may not be sourced under a unified strategy, which can lead to duplicate vendor services and high operational costs.

The right sourcing approach ensures your partners address key capabilities in your system's delivery and support, and that they are positioned to maximize the value of critical and high-impact components.

Signals

Business demand may outpace what vendors can support or offer

Outsourcing and shifting to a buy-over-build applications strategy are common quick fixes to dealing with capacity and skills gaps. However, these quick fixes often become long-term implementations that are not accounted for in the sourcing selection process. Current application and resource sourcing strategies must be reviewed to ensure that vendor arrangements meet the current and upcoming demands and challenges of the business, customers, and enterprise technologies, such as:

• Pressure from stakeholders to lower operating costs while maintaining or increasing quality and throughput.
• Technology lock-in that addresses short-term needs but inhibits long-term growth and maturity.
• Team capacity and talent acquisition not meeting the needs of the business.

	of respondents stated they outsourced software development fully or partly in the last 12 months (2021). Source: Coding Sans, 2021.
	of respondents stated they were at least somewhat satisfied with the result of outsourcing software development. Source: Coding Sans, 2021.

Drivers

Business-managed applications

Employees are implementing and building applications without consulting, notifying, or heeding the advice of IT. IT is often ill-equipped and under-resourced to fight against shadow IT. Instead, organizations are shifting the mindset of "fight shadow IT" to "embrace business-managed applications," using good practices in managing multisource systems. A multisource approach strikes the right balance between user empowerment and centralized control with the solutions and architecture that can best enable it.

Unique problems to solve

Point solutions offer features to address unique use cases in uncommon technology environments. However, point solutions are often deployed in siloes with limited integration or overlap with other solutions. The right sourcing strategy accommodates the fragmented nature of point solutions into a broader enterprise system strategy, whether that be:

• Multisource best of breed – integrate various technologies that provide subsets of the features needed for supporting business functions.
• Multisource custom – integrate systems built in-house with technologies developed by external organizations.
• Vendor add-ons and integrations – enhance an existing vendor's offering by using their system add-ons as upgrades, new add-ons, or integrations.

Vendor services

Some vendor services in a multisource environment may be redundant, conflicting, or incompatible. Given that multisource systems are regularly changing, it is difficult to identify what services are affected, what would be needed to fill the gap of the removed solution, or which redundant services should be removed.

A multisource approach motivates the continuous rationalization of your vendor services and partners to determine the right mixture of in-house and outsourced resources, capabilities, and technologies.

Benefits & Risks

Benefits

• Business-Focused Solution
• Flexibility
• Cost Optimization

Multisource systems can be designed to support an employee's ability to select the tools they want and need.

The environment is architected in a loosely coupled approach to allow applications to be easily added, removed, and modified with minimized impact to other integrated applications.

Rather than investing in large solutions upfront, applications are adopted when they are needed and are removed when little value is gained. Disciplined application portfolio management is necessary to see the full value of this benefit.

Risks

• Manageable Sprawl
• Policy Adherence
• Integration & Compatibility

The increased number and diversity of applications in multisource system environments can overwhelm system managers who do not have an effective application portfolio management practice.

Fragmented application implementations risk inconsistent adherence to security and other quality policies, especially in situations where IT is not involved.

Application integration can quickly become tangled, untraceable, and unmanageable because of varying team and vendor preferences for specific integration technologies and techniques.

Address your pressure points to fully realize the benefits of this priority

Success can be dependent on your ability to address your pressure points.

Recommendations

Define the goals of your applications department and product vision

Understanding the applications team's purpose and image is critical in determining how the system they are managing and the skills and capacities they need should be sourced.

Changing and conflicting definitions of value and goals make it challenging to convey an agreeable strategy of the multisource system. An achievable vision and practical tactics ensure all parties in the multisource system are moving in the same direction.

Related Research:

• Build an Application Department Strategy
• Deliver On Your Digital Product Vision

Develop a sourcing partner strategy

Almost half of all sourcing initiatives do not realize projected savings, and the biggest reason is the choice of partner (Zhang et al., 2018). Making the wrong choice means inferior products, higher costs and the loss of both clients and reputation.

Choosing the right sourcing partner involves understanding current skills and capacities, finding the right matching partner based on a desired profile, and managing a good working relationship that sees short-term gains and supports long-term goals.

Related Research:

• Select a Sourcing Partner for Your Application Development Team
• Drive Successful Sourcing Outcomes with a Robust RFP Process
• Jump Start Your Vendor Management Initiative

Recommendations

Strengthen enterprise integration practices

Integration strategies that are focused solely on technology are likely to complicate rather than simplify because little consideration is given on how other systems and processes will be impacted. Enterprise integration needs to bring together business process, applications, and data – in that order.

Kick-start the process of identifying opportunities for improvement by mapping how applications and data are coordinated to support business activities.

Related Research:

• Build Effective Enterprise Integration on the Back of Business Process
• Build an Application Integration Strategy
• Build a Data Integration Strategy

Manage your solution architecture and application portfolio

Haphazardly implementing and integrating applications can generate significant security, performance, and data risks. A well-thought-through solution architecture is essential in laying the architecture quality principles and roadmap on how the multisource system can grow and evolve in a sustainable and maintainable way.

Good application portfolio management complements the solution architecture as it indicates when low-value and unused applications should be removed to reduce system complexity.

Related Research:

• Enhance Your Solution Architecture Practices
• Application Portfolio Management Foundations

Recommendations

Embrace business-managed applications

Multisource systems bring a unique opportunity to support the business and end users' desire to implement and develop their own applications. However, traditional models of managing applications may not accommodate the specific IT governance and management practices required to operate business-managed applications:

• A collaborative and trusting business-IT relationship is key.
• The role of IT must be reimagined.
• Business must be accountable for its decisions.

Related Research:

• Embrace Business-Managed Applications

CASE STUDY
Cognizant

Situation

• Strives to be primarily an industry-aligned organization that delivers multiple service lines in multiple geographies.
• Cognizant seeks to carefully consider client culture to create a one-team environment.
• Value proposition is a consultative approach bringing thought leadership and mutually adding value to the relationship vs. the more traditional order-taker development partner.
• Wants to share in solution development to facilitate shared successes. Geographic alignment drives knowledge of the client and their challenges, not just about time zone and supportability.
• Offers one of the largest offshore capabilities in the world, supported by local and nearshore resources to drive local knowledge.
• Today's clients don't typically want a black box, they are sophisticated and want transparency around the process and solution, to have a partner.
• Clients do want to know where the work is being delivered from, how it's being done.

Source: interview with Jay MacIsaac, Cognizant.

Approach

• Best relationship comes where teams operate as one.
• Clients are seeking value, not a development black box.
• Clients want to have a partner they can engage with, not just an order taker.
• Want to build a one-team culture with shared goals and deliver business value.
• Seek a partner that will add to their thinking not echo it.

Results

• Cognizant is continuing to deliver double-digit growth and continues to strive for top quartile performance.
• Growth in the client base has seen the company grow to over 340,000 associates worldwide.

Digital Organization as a Platform

PRIORITY 5

• Create a Common Digital Interface to Access All Products and Services

A digital platform enables organizations to leverage a flexible, reliable, and scalable foundation to create a valuable DX, ease delivery and management efforts, maximize existing investments, and motivate the broader shift to digital. This approach provides a standard to architect, integrate, configure, and modernize the applications that compose the platform.

Introduction

What is digital organization as a platform (DOaaP)?

Digital organization as a platform (DOaaP) is a collection of integrated digital services, products, applications, and infrastructure that is used as a vehicle to meet and exceed an organization's digital strategies. It often serves as an accessible "place for exchanges of information, goods, or services to occur between producers and consumers as well as the community that interacts
with said platform" (Watts, 2020).

DOaaP involves a strategy that paves the way for organizations to be digital. It helps organizations use their assets (e.g. data, processes, products, services) in the most effective ways and become more open to cooperative delivery, usage, and management. This opens opportunities for innovation and cross-department collaborations.

How is DOaaP described?

1. Open and Collaborative
   • Open organization: open data, open APIs, transparency, and user participation.
   • Collaboration, co-creation, crowdsourcing, and innovation
2. Accessible and Connected
   • Digital inclusion
   • Channel ubiquity
   • Integrity and interoperability
   • Digital marketplace
3. Digital and Programmable
   • Digital identity
   • Policies and processes as code
   • Digital products and services
   • Enabling digital platforms

Digital organizations follow a common set of principles and practices

Customer-centricity

Digital organizations are driven by customer focus, meeting and exceeding customer expectations. It must design its services with a "digital first" principle, providing access through every expected channel and including seamless integration and interoperability with various departments, partners, and third-party services. It also means creating trust in its ability to provide secure services and to keep privacy and ethics as core pillars.

Leadership, management, and strategies

Digital leadership brings customer focus to the enterprise and its structures and organizes efficient networks and ecosystems. Accomplishing this means getting rid of silos and a siloed mentality and aligning on a digital vision to design policies and services that are efficient, cost-effective, and provide maximum benefit to the user. Asset sharing, co-creation, and being open and transparent become cornerstones of a digital organization.

Infrastructure

Providing digital services across demographics and geographies requires infrastructure, and that in turn requires long-term vision, smart investments, and partnerships with various source partners to create the necessary foundational infrastructure upon which to build digital services.

Digitization and automation

Automation and digitization of processes and services, as well as creating digital-first products, lead to increased efficiency and reach of the organization across demographics and geographies. Moreover, by taking a digital-first approach, digital organizations future-proof their services and demonstrate their commitment to stakeholders.

Enabling platforms

DOaaP embraces open standards, designing and developing organizational platforms and ecosystems with a cloud-first mindset and sound API strategies. Developer experience must also take center stage, providing the necessary tools and embracing Agile and DevOps practices and culture become prerequisites. Cybersecurity and privacy are central to the digital platform; hence they must be part of the design and development principles and practices.

Signals

The business expects support for digital products and services

Digital transformation continues to be a high-priority initiative for many organizations, and they see DOaaP as an effective way to enable and exploit digital capabilities. However, DOaaP unleashes new strategies, opportunities, and challenges that are elusive or unfamiliar to business leaders. Barriers in current business operating models may limit DOaaP success, such as:

• Department and functional silos
• Dispersed, fragmented and poor-quality data
• Ill-equipped and under-skilled resources to support DOaaP adoption
• System fragmentation and redundancies
• Inconsistent integration tactics employed across systems
• Disjointed user experience leading to low engagement and adoption

DOaaP is not just about technology, and it is not the sole responsibility of either IT or business. It is the collective responsibility of the organization.

	of organizations plan to unlock new value through digital. 50% of organizations are planning major transformation over the next three years. Source: Nash Squared, 2022.
	of organizations are undertaking digital expansion projects focused on scaling their business with technology. This result is up from 57% in 2021. Source: F5 Inc, 2022.

Drivers

Unified brand and experience

Users should have the same experience and perception of a brand no matter what product or service they use. However, fragmented implementation of digital technologies and inconsistent application of design standards makes it difficult to meet this expectation. DOaaP embraces a single design and DX standard for all digital products and services, which creates a consistent perception of your organization's brand and reputation irrespective of what products and services are being used and how they are accessed.

Accessibility

Rapid advancement of end-user devices and changes to end-user behaviors and expectations often outpace an organization's ability to meet these requirements. This can make certain organization products and services difficult to find, access and leverage. DOaaP creates an intuitive and searchable interface to all products and services and enables the strategic combination of technologies to collectively deliver more value.

Justification for modernization

Many opportunities are left off the table when legacy systems are abstracted away rather than modernized. However, legacy systems may not justify the investment in modernization because their individual value is outweighed by the cost. A DOaaP initiative motivates decision makers to look at the entire system (i.e. modern and legacy) to determine which components need to be brought up to a minimum digital state. The conversation has now changed. Legacy systems should be modernized to increase the collective benefit of the entire DOaaP.

Benefits & Risks

Benefits

• Look & Feel
• User Adoption
• Shift to Digital

A single, modern, customizable interface enables a common look and feel no matter what and how the platform is being accessed.

Organizations can motivate and encourage the adoption and use of all products and services through the platform and increase the adoption of underused technologies.

DOaaP motivates and supports the modernization of data, processes, and systems to meet the goals and objectives outlined in the broader digital transformation strategy.

Risks

• Data Quality
• System Stability
• Ability to Modernize
• Business Model Change

Each system may have a different definition of commonly used entities (e.g. customer), which can cause data quality issues when information is shared among these systems.

DOaaP can stress the performance of underlying systems due to the limitations of some systems to handle increased traffic.

Some systems cannot be modernized due to cost constraints, business continuity risks, vendor lock-in, legacy and lore, or other blocking factors.

Limited appetite to make the necessary changes to business operations in order to maximize the value of DOaaP technologies.

Address your pressure points to fully realize the benefits of this priority

Success can be dependent on your ability to address your pressure points.

Recommendations

Define your platform vision

Organizations realize that a digital model is the way to provide more effective services to their customers and end users in a cost-effective, innovative, and engaging fashion. DOaaP is a way to help support this transition.

However, various platform stakeholders will have different interpretations of and preferences for what this platform is intended to solve, what benefits it is supposed to deliver, and what capabilities it will deliver. A grounded vision is imperative to steer the roadmap and initiatives.

Related Research:

• Drive Digital Transformation with Platform Strategies
• Gov 2.0: Government as a Platform
• Deliver Digital Products at Scale

Assess and modernize your applications

Certain applications may not sufficiently support the compatibility, flexibility, and efficiency requirements of DOaaP. While workaround technologies and tactics can be employed to overcome these application challenges, the full value of the DOaaP may not be realized.

Reviewing the current state of the application portfolio will indicate the functional and value limitations of what DOaaP can provide and an indication of the scope of investment needed to bring applications up to a minimum state.

Related Research:

• Application Portfolio Management Foundations
• Modernize Your Applications

Recommendations

Understand and evaluate end-user needs

Technology has reached a point where it's no longer difficult for teams to build functional and valuable digital platforms. Rather, the difficulty lies in creating an interface and platform that people want to use and use frequently.

While it is important to increase the access and promotion of all products and services, orchestrating and configuring them in a way to deliver a satisfying experience is even more important. Applications teams must first learn about and empathize with the needs of end users.

Related Research:

• Use Experience Design to Drive Empathy With the Business
• Implement and Mature Your User Experience Design Practice

Architect your platform

Formalizing and constructing DOaaP just for the sake of doing so often results in an initiative that is lengthy and costly and ends up being considered a failure.

The build and optimization of the platform must be predicated on a thorough understanding of the DOaaP's goals, objectives, and priorities and the business capabilities and process they are meant to support and enable. The appropriate architecture and delivery practices can then be defined and employed.

Related Research:

• Enhance Your Solution Architecture Practices
• Build Your Data Practice and Platform

CASE STUDY
e-Estonia

Situation

The digital strategy of Estonia resulted in e-Estonia, with the vision of "creating a society with more transparency, trust, and efficiency." Estonia has addressed the challenge by creating structures, organizations, and a culture of innovation, and then using the speed and efficiency of digital infrastructure, apps, and services. This strategy can reduce or eliminate bureaucracy through transparency and automation.

Estonia embarked on its journey to making digital a priority in 1994-1996, focusing on a committed investment in infrastructure and digital literacy. With that infrastructure in place, they started providing digital services like an e-banking service (1996), e-tax and mobile parking (2002), and then went full steam ahead with a digital information interoperability platform in 2001, digital identity in 2002, e-health in 2008, and e-prescription in 2010. The government is now strategizing for AI.

Results

Source: e-Estonia

Practices employed

The e-Estonia digital government model serves as a reference for governments across the world; this is acknowledged by the various awards it has received, like #2 in "internet freedom," awarded by Freedom House in 2019; #1 on the "digital health index," awarded by the Bertelsmann Foundation in 2019; and #1 on "start-up friendliness," awarded by Index Venture in 2018.

References

"15th State of Agile Report." Digital.ai, 2021. Web.
"2022 HR Trends Report." McLean & Company, 2022.
"2022: State of Application Strategy Report." F5 Inc, 2022.
"Are Executives Wearing Rose-Colored Glasses Around Digital Transformation?" Cyara, 2021. Web.
"Cost of a Data Breach Report 2022." IBM, 2022. Web.
Dalal, Vishal, et al. "Tech Debt: Reclaiming Tech Equity." McKinsey Digital, Oct. 2020. Web.
"Differentiating Between Intelligent Automation and Hyperautomation." IBM, 15 October 2021. Web.
"Digital Leadership Report 2021." Harvey Nash Group, 2021.
"Digital Leadership Report 2022: The State of Digital." Nash Squared, 2022. Web.
Gupta, Sunil. "Driving Digital Strategy: A Guide to Reimagining Your Business." Harvard Business Review Press, 2018. Web.
Haff, Gordon. "State of Application Modernization Report 2022." Konveyor, 2022. Web.
"IEEE Standard for Software Maintenance: IEEE Std 1219-1998." IEEE Standard for Software Maintenance, 1998. Accessed Dec. 2015.
"Intelligent Automation." Cognizant, n.d. Web.
"Kofax 2022: Intelligent Automation Benchmark Study". Kofax, 2021. Web.
McCann, Leah. "Barco's Virtual Classroom at UCL: A Case Study for the Future of All University Classrooms?" rAVe, 2 July 2020, Web.
"Proactive Staffing and Patient Prioritization to Decompress ED and Reduce Length of Stay." University Hospitals, 2018. Web.
"Secrets of Successful Modernization." looksoftware, 2013. Web.
"State of Software Development." Coding Sans, 2021. Web.
"The State of Low-Code/No-Code." Creatio, 2021. Web.
"We Have Built a Digital Society and We Can Show You How." e-Estonia. n.d. Web.
Zanna. "The 5 Types of Experience Series (1): Brand Experience Is Your Compass." Accelerate in Experience, 9 February 2020. Web.
Zhang, Y. et al. "Effects of Risks on the Performance of Business Process Outsourcing Projects: The Moderating Roles of Knowledge Management Capabilities." International Journal of Project Management, 2018, vol. 36 no. 4, 627-639.

Research Contributors and Experts

Chris Harrington
Chief Technology Officer
Carolinas Telco Federal Credit Union

Chris Harrington is Chief Technology Officer (CTO) of Carolinas Telco Federal Credit Union. Harrington is a proven leader with over 20 years of experience developing and leading information technology and cybersecurity strategies and teams in the financial industry space.

Benjamin Palacio
Senior Information Technology Analyst County of Placer

Benjamin Palacio has been working in the application development space since 2007 with a strong focus on system integrations. He has seamlessly integrated applications data across multiple states into a single reporting solution for management teams to evaluate, and he has codeveloped applications to manage billions in federal funding. He is also a CSAC-credentialed IT Executive (CA, USA).

Scott Rutherford
Executive Vice President, Technology
LGM Financial Services Inc.

Scott heads the Technology division of LGM Financial Services Inc., a leading provider of warranty and financing products to automotive OEMs and dealerships in Canada. His responsibilities include strategy and execution of data and analytics, applications, and technology operations.

Robert Willatts
IT Manager, Enterprise Business Solutions and Project Services
Town of Newmarket

Robert is passionate about technology, innovation, and Smart City Initiatives. He makes customer satisfaction as the top priority in every one of his responsibilities and accountabilities as an IT manager, such as developing business applications, implementing and maintaining enterprise applications, and implementing technical solutions. Robert encourages communication, collaboration, and engagement as he leads and guides IT in the Town of Newmarket.

Randeep Grewal
Vice President, Enterprise Applications
Red Hat

Randeep has over 25 years of experience in enterprise applications, advanced analytics, enterprise data management, and consulting services, having worked at numerous blue-chip companies. In his most recent role, he is the Vice President of Enterprise Applications at Red Hat. Reporting to the CIO, he is responsible for Red Hat's core business applications with a focus on enterprise transformation, application architecture, engineering, and operational excellence. He previously led the evolution of Red Hat into a data-led company by maturing the enterprise data and analytics function to include data lake, streaming data, data governance, and operationalization of analytics for decision support.

Prior to Red Hat, Randeep was the director of global services strategy at Lenovo, where he led the strategy using market data to grow Lenovo's services business by over $400 million in three years. Prior to Lenovo, Randeep was the director of advanced analytics at Alliance One and helped build an enterprise data and analytics function. His earlier work includes seven years at SAS, helping SAS become a leader in business analytics, and at KPMG consulting, where he managed services engagements at Fortune 100 companies.

Make the Case for Product Delivery

Align your organization on the practices to deliver what matters most.

Table of Contents

Define product

Define your drivers and goals

Understand the role of product ownership

Communicate what comes next

Make the case to your stakeholders

Appendix: Additional research

Appendix: Product delivery strategy communication

Appendix: Manage stakeholder influence

Appendix: Product owner capability details

Executive Summary

Info-Tech Insight

Delivering products doesn’t mean you will stop delivering projects! Product-centric delivery is intended to address the misalignment between the long-term delivery of value that organizations demand and the nature of traditional project-focused environments.

Many executives perceive IT as being poorly aligned with business objectives

Info-Tech’s CIO Business Vision Survey data highlights the importance of IT initiatives in supporting the business in achieving its strategic goals.

However, Info-Tech’s CEO-CIO Alignment Survey (2021; N=58) data indicates that CEOs perceive IT to be poorly aligned to business’ strategic goals.

Info-Tech CEO-CIO Alignment Diagnostics, 2021 (N=58)

40% Of CEOs believe that business goals are going unsupported by IT.

34% Of business stakeholders are supporters of their IT departments (n=334).

40% Of CIOs/CEOs are misaligned on the target role for IT.

Info-Tech Insight

Great technical solutions are not the primary driver of IT success. Focusing on delivery of digital products that align with organizational goals will produce improved outcomes and will foster an improved relationship between business and IT.

Increase product success by involving IT, business, and customers in your product roadmaps, planning, and delivery

Product management and delivery seek to promote improved relationships among IT, business, and customers, a critical driver for business satisfaction.

IT	1	Collaboration IT, business, and customers work together through all stages of the product lifecycle, from market research through the roadmapping and delivery processes and into maintenance and retirement. The goal is to ensure the risks and dependencies are realized before work is committed.	Stakeholders, Customers, and Business
	2	Communication Prioritize high-value modes of communication to break down existing silos and create common understanding and alignment across functions. This approach increases transparency and visibility across the entire product lifecycle.
	3	Integration Explore methods to integrate the workflows, decision making, and toolsets among the business, IT, and customers. The goal is to become more reactive to changes in business and customer expectations and more proactive about market trends.

Product does not mean the same thing to everyone

Do not expect a universal definition of products.
Every organization and industry has a different definition of what a product is. Organizations structure their people, processes, and technologies according to their definition of the products they manage. Conflicting product definitions between teams increase confusion and misalignment of product roadmaps.

Organizations need a common understanding of what a product is and how it pertains to the business.

This understanding needs to be accepted across the organization.

“There is not a lot of guidance in the industry on how to define [products]. This is dangerous because what will happen is that product backlogs will be formed in too many areas. All that does is create dependencies and coordination across teams … and backlogs.” (Chad Beier, “How Do You Define a Product?” Scrum.org)

Products enable the long-term and continuous delivery of value

Phase 1

Build the case for product-centric delivery

Phase 1
1.1 Define product
1.2 Define your drivers and goals
1.3 Understand the role of product ownership
1.4 Communicate what comes next
1.5 Make the case to your stakeholders

This phase will walk you through the following activities:

• Define product in your context.
• Define your drivers and goals for moving to product delivery.
• Understand the role of product ownership.
• Communicate what comes next for your transition to product.
• Lay out the case to your stakeholders.

This phase involves the following participants:

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Business analysts

Step 1.1

Define product

Activities

• 1.1.1 Define “product” in your context
• 1.1.2 Consider examples of what is (and is not) a product in your organization
• 1.1.3 Identify the differences between project and product delivery

This step involves the following participants:

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Business analysts

Outcomes of this step

• A clear definition of product in your organization’s context.

Make the Case for Product Delivery

Exercise 1.1.1 Define “product” in your context

30-60 minutes

Output: Your enterprise/organizational definition of products and services

Participants: Product owners, Product managers, Development team leads, Portfolio managers, Business analysts

1. Discuss what “product” means in your organization.
2. Create a common, enterprise-wide definition for “product.”

Record the results in the Make the Case for Product-Centric Delivery Workbook.

Example: What is a product?

Not all organizations will define products in the same way. Take this as a general example:

“A tangible solution, tool, or service (physical or digital) that enables the long-term and evolving delivery of value to customers and stakeholders based on business and user requirements.” Info-Tech Insight A proper definition of product recognizes three key facts: Products are long-term endeavors that don’t end after the project finishes. Products are not just “apps” but can be software or services that drive the delivery of value. There is more than one stakeholder group that derives value from the product or service.

How do we know what is a product?

Exercise 1.1.2 Consider examples of what is (and is not) a product in your organization

Output: Examples of what is and isn’t a product in your specific context.

Participants: Product owners, Product managers, Development team leads, Portfolio managers, Business analysts

1. Leverage the definition you created in exercise 1.1.1 and the explanation on the slide What is a product?
2. Pick examples that effectively show the difference between products and non-products and facilitate a conversation on the ones that seem to be on the line. Specific server instances, or instances of providing a service, are worthwhile examples to consider.
3. From the list you come up with, take the top three examples and put them into the Make the Case for Product Delivery Presentation Template.

Record the results in the Make the Case for Product Delivery Workbook.

Product delivery practices should consider everything required to support it, not just what users see.

Products and services share the same foundation and best practices

Exercise 1.1.3 Identify the differences between project and product delivery

30-60 minutes

Output: List of differences between project and product delivery

Participants: Product owners, Product managers, Development team leads, Portfolio managers, Business analysts

1. Consider project delivery and product delivery.
2. Discuss what some differences are between the two.
   Note: This exercise is not about identifying the advantages and disadvantages of each style of delivery. This is to identify the variation between the two.

Record the results in the Make the Case for Product Delivery Workbook.

Identify the differences between a project-centric and a product-centric organization

Info-Tech Insights

• Product ownership should be one of your first areas of focus when transitioning from project to product delivery.
• Product delivery requires significant shifts in the way you complete development work and deliver value to your users. Make the changes that support improving end-user value and enterprise alignment.

Projects can be a mechanism for funding product changes and improvements

Projects within products Regardless of whether you recognize yourself as a product-based or project-based shop, the same basic principles should apply. The purpose of projects is to deliver the scope of a product release. The shift to product delivery leverages a product roadmap and backlog as the mechanism for defining and managing the scope of the release. Eventually, teams progress to continuous integration/continuous delivery (CI/CD) where they can release on demand or as scheduled, requiring org change management.

Step 1.2

Define your drivers and goals

Activities

• 1.2.1 Understand your drivers for product-centric delivery
• 1.2.2 Define the goals for your product-centric organization

This step involves the following participants:

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Business analysts

Outcomes of this step

• A clear understanding of your motivations and desired outcomes for moving to product delivery.

Make the Case for Product Delivery

Exercise 1.2.1 Understand your drivers for product-centric delivery

30-60 minutes

Output: Organizational drivers to move to product-centric delivery.

Participants: Product owners, Product managers, Development team leads, Portfolio managers, Business analysts

1. Identify your pain points in the current delivery model.
2. What is the root cause of these pain points?
3. How will a product-centric delivery model fix the root cause (drivers)?

Record the results in the Make the Case for Product Delivery Workbook.

Exercise 1.2.2 Define the goals for your product-centric organization

30 minutes

Output: Goals for product-centric delivery

Participants: Product owners, Product managers, Development team leads, Portfolio managers, Business analysts

1. Review the differences between project and product delivery from exercise 1.1.3 and the list of drivers from exercise 1.2.1.
2. Define your goals for achieving a product-centric organization.
   Note: Your drivers may have already covered the goals. If so, review if you would like to change the drivers based on your renewed understanding of the differences between project and product delivery.

Record the results in the Make the Case for Product Delivery Workbook.

Step 1.3

Understand the role of product ownership

Activities

• 1.3.1 Identify product ownership capabilities

This step involves the following participants:

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Business analysts

Outcomes of this step

• Product owner capabilities that you agree are critical to start your product transformation.

Make the Case for Product Delivery

Accountability for the delivery of value through product ownership is not optional

Info-Tech Insight People treat the assignment of accountability for products (aka product ownership) as optional. Without assigning accountability up front, your transition to product delivery will stall. Accountable individuals will be focused on the core outcome for product delivery, which is the delivery of the right value, at the right time, to the right people.

Recognize the different product owner perspectives

Info-Tech Best Practice

Product owners must translate needs and constraints from their perspective into the language of their audience. Kathy Borneman, Digital Product Owner at SunTrust Bank, noted the challenges of finding a common language between lines of business and IT (e.g. what is a unit?).

Info-Tech Insight

Recognize that product owners represent one of three primary perspectives. Although all share the same capabilities, how they approach their responsibilities is influenced by their perspective.

“A Product Owner in its most beneficial form acts like an Entrepreneur, like a 'mini-CEO'. The Product Owner is someone who really 'owns' the product.” (Robbin Schuurman, “Tips for Starting Product Owners”)

Implement the Info-Tech product owner capability model

As discussed in Build a Better Product Owner, most product owners operate with an incomplete knowledge of the skills and capabilities needed to perform the role. Common gaps include focusing only on product backlogs, acting as a proxy for product decisions, and ignoring the need for key performance indicators (KPIs) and analytics in both planning and value realization.
Vision Market Analysis Business Alignment Product Roadmap Leadership Soft Skills Collaboration Decision Making Product Lifecycle Management Plan Build Run Value Realization KPIs Financial Management Business Model

Details on product ownership capabilities can be found in the appendix.

Exercise 1.3.1 Identify product ownership capabilities

60 minutes

Output: Product owner capability mapping

Participants: Product owners, Product managers, Development team leads, Portfolio managers, Business analysts

1. Write down the capabilities product owners need to perform their duties (one per sticky note) in order to describe product ownership in your organization. Consider people, processes, and tools.
2. Mark each capability with a plus (current capability), circle (some proficiency), or dash (missing capability).
3. Discuss each capability and place on the appropriate quadrant.

Record the results in the Make the Case for Product Delivery Workbook.

Differentiate between product owners and product managers

Info-Tech Insight

“Product owner” and “product manager” are terms that should be adapted to fit your culture and product hierarchy. These are not management relationships but rather a way to structure related products and services that touch the same end users.

Step 1.4

Communicate what comes next

Activities

• 1.4.1 How do we get started?

This step involves the following participants:

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Business analysts

Outcomes of this step

• A now, next, later roadmap indicating your overall next steps.

Make the Case for Product Delivery

Make a plan in order to make a plan!

Consider some of the techniques you can use to validate your strategy.		Go to your backlog and prioritize the elements that need to be answered sooner rather than later. Possible areas of focus: Regulatory requirements or questions to answer around accessibility, security, privacy. Stress testing any new processes against situations that may occur.
Learning Milestones The completion of a set of artifacts dedicated to validating business opportunities and hypotheses. Possible areas of focus: Align teams on product strategy prior to build Market research and analysis Dedicated feedback sessions Provide information on feature requirements	Sprint Zero (AKA Project-before-the-project) The completion of a set of key planning activities, typically the first sprint. Possible areas of focus: Focus on technical verification to enable product development alignment Sign off on architectural questions or concerns

The “Now, Next, Later” roadmap

Use this when deadlines and delivery dates are not strict. This is best suited for brainstorming a product plan when dependency mapping is not required.

Now What are you going to do now? Next What are you going to do very soon? Later What are you going to do in the future?

(Source: “Tips for Agile product roadmaps & product roadmap examples,” Scrum.org, 2017)

Exercise 1.4.1 How do we get started?

30-60 minutes

Output: Product transformation critical steps and basic roadmap

Participants: Product owners, Product managers, Development team leads, Portfolio managers, Business analysts

Identify what the critical steps are for the organization to embrace product-centric delivery. Group each critical step by how soon you need to address it: Now: Let’s do this ASAP. Next: Sometime very soon, let’s do these things. Later: Much further off in the distance, let’s consider these things.

(Source: “Tips for Agile product roadmaps & product roadmap examples,” Scrum.org, 2017)

Record the results in the Make the Case for Product Delivery Workbook.

Example

Step 1.5

Make the case to your stakeholders

Activities

• 1.5.1 Identify what support you need from your stakeholders
• 1.5.2 Build your pitch for product delivery

This step involves the following participants:

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Business analysts

Outcomes of this step

• A deliverable that helps make the case for product delivery.

Make the Case for Product Delivery

Develop a stakeholder strategy to define your product owner landscape

Stakeholder Influence Stakeholders are a critical cornerstone to product ownership. They provide the context, alignment, and constraints that influence or control what a product owner is able to accomplish. Product teams operate within this network of stakeholders who represent different perspectives within the organization. See the appendix for activities and guidance on how to devise a strategy for managing stakeholders.

Exercise 1.5.1 Identify what support you need from your stakeholders

30 minutes

Output: Clear understanding of stakeholders, what they need from you, and what you need from them.

Participants: Product owners, Product managers, Development team leads, Portfolio managers, Business analysts

1. If you don’t yet know who your stakeholders are, consider completing one or more of the stakeholder management exercises in the appendix.
2. Identify your key stakeholders who have an interest in solution delivery.
3. Consider their perspective on product-centric delivery. (For example: For head of support, what does solution delivery mean to them?)
4. Identify what role each stakeholder would play in the transformation.
   • This role represents what you need from them for this transformation to product-centric delivery.

Record the results in the Make the Case for Product Delivery Workbook.

Exercise 1.5.2 Build your pitch deck

30 minutes (and up)

Output: A completed presentation to help you make the case for product delivery.

Participants: Product owners, Product managers, Development team leads, Portfolio managers, Business analysts

1. Take the results from the Make the Case for Product Delivery Workbook and transfer them into the presentation template.
2. Follow the instructions on each page listed in the instruction bubbles to know what results to place where.
3. This is meant to be a template; you are welcome to add and remove slides as needed to suit your audience!

Record the results in the Make the Case for Product Delivery Workbook.

Appendix

Additional research to start your journey

Related Info-Tech Research

Related Info-Tech Research

Application Portfolio Management

Related Info-Tech Research

Value, Delivery Metrics, Estimation

Related Info-Tech Research

Org Design and Performance

Appendix

Product delivery strategy communication

Product roadmaps guide delivery and communicate your strategy

In Deliver on Your Digital Product Vision, we demonstrate how the product roadmap is core to value realization. The product roadmap is your communicated path, and as a product owner, you use it to align teams and changes to your defined goals while aligning your product to enterprise goals and strategy.

(Adapted from: Pichler, “What Is Product Management?”)

Info-Tech Insight

The quality of your product backlog – and your ability to realize business value from your delivery pipeline – is directly related to the input, content, and prioritization of items in your product roadmap.

Define product value by aligning backlog delivery with roadmap goals

In each product plan, the backlogs show what you will deliver.
Roadmaps identify when and in what order you will deliver value, capabilities, and goals.

Multiple roadmap views can communicate differently, yet tell the same truth

Appendix

Managing stakeholder influence

From Build a Better Product Owner

Step 1.3 (from Build a Better Product Owner)

Manage Stakeholder Influence

Activities

• 1.3.1 Visualize interrelationships to identify key influencers
• 1.3.2 Group your product owners into categories
• 1.3.3 Prioritize your stakeholders
• 1.3.4 Delegation Poker: Reach better decisions

This step will walk you through the following activities:

To be successful, product owners need to identify and manage all stakeholders for their products. This step will build a stakeholder map and strategy.

This step involves the following participants:

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Delivery managers
• Business analysts

Outcomes of this step

• Relationships among stakeholders and influencers
• Categorization of stakeholders and influencers
• Stakeholder and influencer prioritization
• Better understanding of decision-making approaches and delegation

Develop a product owner stakeholder strategy

Stakeholder Influence Stakeholders are a critical cornerstone to product ownership. They provide the context, alignment, and constraints that influence or control what a product owner is able to accomplish. Product owners operate within this network of stakeholders who represent different perspectives within the organization. First, product owners must identify members of their stakeholder network. Next, they should devise a strategy for managing stakeholders. Without accomplishing these missing pieces, product owners will encounter obstacles, resistance, or unexpected changes.

Create a stakeholder network map to product roadmaps and prioritization

Follow the trail of breadcrumbs from your direct stakeholders to their influencers to uncover hidden stakeholders.

Legend Black arrows indicate the direction of professional influence Dashed green arrows indicate bidirectional, informal influence relationships

Info-Tech Insight

Your stakeholder map defines the influence landscape your product operates in. It is every bit as important as the teams who enhance, support, and operate your product directly.

Use “connectors” to determine who may be influencing your direct stakeholders. They may not have any formal authority within the organization, but they may have informal yet substantive relationships with your stakeholders.

1.3.1 Visualize interrelationships to identify key influencers

60 minutes

Input: List of product stakeholders

Output: Relationships among stakeholders and influencers

Materials: Whiteboard/flip charts, Markers, Build a Better Product Owner Workbook

Participants: Product owners, Product managers, Development team leads, Portfolio managers, Business analysts

1. List direct stakeholders for your product.
2. Determine the stakeholders of your stakeholders and consider adding each of them to the stakeholder list.
3. Assess who has either formal or informal influence over your stakeholders; add these influencers to your stakeholder list.
4. Construct a diagram linking stakeholders and their influencers together.
   1. Use black arrows to indicate the direction of professional influence.
   2. Use dashed green arrows to indicate bidirectional, informal influence relationships.
5. Record the results in the Build a Better Product Owner Workbook.

Record the results in the Build a Better Product Owner Workbook.

Categorize your stakeholders with a prioritization map

1.3.2 Group your product owners into categories

30 minutes

Input: Stakeholder map

Output: Categorization of stakeholders and influencers

Materials: Whiteboard/flip charts, Markers, Build a Better Product Owner Workbook

Participants: Product owners, Product managers, Development team leads, Portfolio managers, Business analysts

Identify your stakeholder’s interest in and influence on your Agile implementation as high, medium, or low by rating the attributes below. Map your results to the model below to determine each stakeholder’s category. Record the results in the Build a Better Product Owner Workbook.
Level of Influence Power: Ability of a stakeholder to effect change. Urgency: Degree of immediacy demanded. Legitimacy: Perceived validity of stakeholder’s claim. Volume: How loud their “voice” is or could become. Contribution: What they have that is of value to you.	Level of Interest How much are the stakeholder’s individual performance and goals directly tied to the success or failure of the product?

Record the results in the Build a Better Product Owner Workbook.

Prioritize your stakeholders

There may be too many stakeholders to be able to manage them all. Focus your attention on the stakeholders that matter most.

Consider the three dimensions for stakeholder prioritization: influence, interest, and support. Support can be determined by rating the following question: how likely is it that your stakeholder would recommend your product? These parameters are used to prioritize which stakeholders are most important and should receive the focus of your attention. The table to the right indicates how stakeholders are ranked.

1.3.3 Prioritize your stakeholders

30 minutes

Input: Stakeholder matrix, Stakeholder prioritization

Output: Stakeholder and influencer prioritization

Materials: Whiteboard/flip charts, Markers, Build a Better Product Owner Workbook

Participants: Product owners, Product managers, Development team leads, Portfolio managers, Business analysts

1. Identify the level of support of each stakeholder by answering the following question: how likely is it that your stakeholder would endorse your product?
2. Prioritize your stakeholders using the prioritization scheme on the previous slide.
3. Record the results in the Build a Better Product Owner Workbook.

Record the results in the Build a Better Product Owner Workbook.

Define strategies for engaging stakeholders by type

Info-Tech Insight Each group of stakeholders draws attention and resources away from critical tasks. By properly identifying your stakeholder groups, the product owner can develop corresponding actions to manage stakeholders in each group. This can dramatically reduce wasted effort trying to satisfy Spectators and Noisemakers, while ensuring the needs of the Mediators and Players are met.

Type Quadrant Actions Players High influence; high interest – actively engage Keep them updated on the progress of the project. Continuously involve Players in the process and maintain their engagement and interest by demonstrating their value to its success. Mediators High influence; low interest – keep satisfied They can be the game changers in groups of stakeholders. Turn them into supporters by gaining their confidence and trust and including them in important decision-making steps. In turn, they can help you influence other stakeholders. Noisemakers Low influence; high interest – keep informed Try to increase their influence (or decrease it if they are detractors) by providing them with key information, supporting them in meetings, and using Mediators to help them. Spectators Low influence; low interest – monitor They are followers. Keep them in the loop by providing clarity on objectives and status updates.

Appendix

Product owner capability details

From Build a Better Product Owner

Develop product owner capabilities

	Each capability has three components needed for successful product ownership. Definitions are on the following slides. Define the skills and activities in each component that are directly related to your product and culture.

Capabilities: Vision

Capabilities: Leadership

Capabilities: Product lifecycle management

Capabilities: Value realization

Avoid common capability gaps

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McCloskey, Heather. “When and How to Scale Your Product Team.” UserVoice, 21 Feb. 2017. Web.

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Pichler, Roman. “Sprint Planning Tips for Product Owners.” LinkedIn, 4 Sept. 2018. Web.

Pichler, Roman. “What Is Product Management?” Pichler Consulting Limited, 26 Nov. 2014. Web.

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Schuurman, Robbin. “10 Tips for Product Owners on Product Backlog Management.” Scrum.org, 5 Dec. 2017. Web.

Schuurman, Robbin. “10 Tips for Product Owners on the Product Vision.” Scrum.org, 29 Nov. 2017. Web.

Schuurman, Robbin. “Tips for Starting Product Owners.” Scrum.org, 27 Nov. 2017. Web.

Sharma, Rohit. “Scaling Product Teams the Structured Way.” Monetary Musings, 28 Nov. 2016. Web.

Bibliography – Product Ownership

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Research Contributors and Experts

Emily Archer Lead Business Analyst, Enterprise Consulting, authentic digital agency Emily Archer is a consultant currently working with Fortune 500 clients to ensure the delivery of successful projects, products, and processes. She helps increase the business value returned for organizations’ investments in designing and implementing enterprise content hubs and content operations, custom web applications, digital marketing, and e-commerce platforms.

David Berg Founder & CTO Strainprint Technologies Inc. David Berg is a product commercialization expert that has spent the last 20 years of his career delivering product management and business development services across a broad range of industries. Early in his career, David worked with product management and engineering teams to build core network infrastructure products that secure and power the internet we benefit from today. David’s experience also includes working with clean technologies in the area of clean power generation, agritech, and Internet of Things infrastructure. Over the last five years, David has been focused on his latest venture, Strainprint Technologies, a data and analytics company focused on the medical cannabis industry. Strainprint has built the largest longitudinal medical cannabis dataset in the world with the goal to develop an understanding of treatment behavior, interactions, and chemical drivers to guide future product development.

Research Contributors and Experts

Kathy Borneman Digital Product Owner, SunTrust Bank Kathy Borneman is a senior product owner who helps people enjoy their jobs again by engaging others in end-to-end decision making to deliver software and operational solutions that enhance the client experience and allow people to think and act strategically.

Charlie Campbell Product Owner, Merchant e-Solutions Charlie Campbell is an experienced problem solver with the ability to quickly dissect situations and recommend immediate actions to achieve resolution, liaise between technical and functional personnel to bridge the technology and communication gap, and work with diverse teams and resources to reach a common goal.

Research Contributors and Experts

Yarrow Diamond Sr. Director, Business Architecture Financial Services Yarrow Diamond is an experienced professional with expertise in enterprise strategy development, project portfolio management, and business process reengineering across financial services, healthcare and insurance, hospitality, and real estate environments. She has a master’s in Enterprise Architecture from Penn State University, LSSMBB, PMP, CSM, ITILv3.

Cari J. Faanes-Blakey, CBAP, PMI-PBA Enterprise Business Systems Analyst, Vertex, Inc. Cari J. Faanes-Blakey has a history in software development and implementation as a Business Analyst and Project Manager for financial and taxation software vendors. Active in the International Institute of Business Analysis (IIBA), Cari participated on the writing team for the BA Body of Knowledge 3.0 and the certification exam.

Research Contributors and Experts

Kieran Gobey Senior Consultant Professional Services Blueprint Software Systems Kieran Gobey is an IT professional with 24 years of experience, focused on business, technology, and systems analysis. He has split his career between external and internal customer-facing roles, and this has resulted in a true understanding of what is required to be a Professional Services Consultant. His problem-solving skills and ability to mentor others have resulted in successful software implementations. Kieran’s specialties include deep system troubleshooting and analysis skills, facilitating communications to bring together participants effectively, mentoring, leadership, and organizational skills.

Rupert Kainzbauer VP Product, Digital Wallets Paysafe Group Rupert Kainzbauer is an experienced senior leader with a passion for defining and delivering products that deliver real customer and commercial benefit. Together with a team of highly experienced and motivated product managers, he has successfully led highly complex, multi-stakeholder payments initiatives, from proposition development and solution design through to market delivery. Their domain experience is in building online payment products in high-risk and emerging markets, remittance, prepaid cards, and mobile applications.

Research Contributors and Experts

Saeed Khan Founder, Transformation Labs Saeed Khan has been working in high tech for 30 years in both Canada and the US and has held a number of leadership roles in Product Management over that time. He speaks regularly at conferences and has been writing publicly about technology product management since 2005. Through Transformation Labs, Saeed helps companies accelerate product success by working with product teams to improve their skills, practices, and processes. He is a cofounder of ProductCamp Toronto and currently runs a Meetup group and global Slack community called Product Leaders, the only global community of senior-level product executives.

Hoi Kun Lo Product Owner Nielsen Hoi Kun Lo is an experienced change agent who can be found actively participating within the IIBA and WITI groups in Tampa, FL, and a champion for Agile, architecture, diversity, and inclusion programs at Nielsen. She is currently a Product Owner in the Digital Strategy team within Nielsen Global Watch Technology.

Research Contributors and Experts

Abhishek Mathur Sr Director, Product Management Kasisto, Inc. Abhishek Mathur is a product management leader, an artificial intelligence practitioner, and an educator. He has led product management and engineering teams at Clarifai, IBM, and Kasisto to build a variety of artificial intelligence applications within the space of computer vision, natural language processing, and recommendation systems. Abhishek enjoys having deep conversations about the future of technology and helping aspiring product managers enter and accelerate their careers.

Jeff Meister Technology Advisor and Product Leader Jeff Meister is a technology advisor and product leader. He has more than 20 years of experience building and operating software products and the teams that build them. He has built products across a wide range of industries and has built and led large engineering, design, and product organizations. Jeff most recently served as Senior Director of Product Management at Avanade, where he built and led the product management practice. This involved hiring and leading product managers, defining product management processes, solution shaping and engagement execution, and evangelizing the discipline through pitches, presentations, and speaking engagements. Jeff holds a Bachelor of Applied Science (Electrical Engineering) and a Bachelor of Arts from the University of Waterloo, an MBA from INSEAD (Strategy), and certifications in product management, project management, and design thinking.

Research Contributors and Experts

Vincent Mirabelli Principal, Global Project Synergy Group With over 10 years of experience in both the private and public sectors, Vincent Mirabelli possesses an impressive track record of improving, informing, and transforming business strategy and operations through process improvement, design and re-engineering, and the application of quality to business analysis, project management, and process improvement standards.

Oz Nazili VP, Product & Growth TWG Oz Nazili is a product leader with a decade of experience in both building products and product teams. Having spent time at funded startups and large enterprises, he thinks often about the most effective way to deliver value to users. His core areas of interest include Lean MVP development and data-driven product growth.

Research Contributors and Experts

Mark Pearson Principal IT Architect First Data Corporation Mark Pearson is an executive business leader grounded in the process, data, technology, and operations of software-driven business. He knows the enterprise software landscape and is skilled in product, technology, and operations design and delivery within information technology organizations, outsourcing firms, and software product companies.

Brenda Peshak Product Owner, Widget Industries, LLC Brenda Peshak is skilled in business process, analytical skills, Microsoft Office Suite, communication, and customer relationship management (CRM). She is a strong product management professional with a Master’s focused in Business Leadership (MBL) from William Penn University.

Research Contributors and Experts

Mike Starkey Director of Engineering W.W. Grainger Mike Starkey is a Director of Engineering at W.W. Grainger, currently focusing on operating model development, digital architecture, and building enterprise software. Prior to joining W.W. Grainger, Mike held a variety of technology consulting roles throughout the system delivery lifecycle spanning multiple industries such as healthcare, retail, manufacturing, and utilities with Fortune 500 companies.

Anant Tailor Cofounder & Head of Product Dream Payments Corp. Anant Tailor is a cofounder at Dream Payments where he currently serves as the COO and Head of Product, having responsibility for Product Strategy & Development, Client Delivery, Compliance, and Operations. He has 20+ years of experience building and operating organizations that deliver software products and solutions for consumers and businesses of varying sizes. Prior to founding Dream Payments, Anant was the COO and Director of Client Services at DonRiver Inc, a technology strategy and software consultancy that he helped to build and scale into a global company with 100+ employees operating in seven countries. Anant is a Professional Engineer with a Bachelor’s degree in Electrical Engineering from McMaster University and a certificate in Product Strategy & Management from the Kellogg School of Management at Northwestern University.

Research Contributors and Experts

Angela Weller Scrum Master, Businessolver Angela Weller is an experienced Agile business analyst who collaborates with key stakeholders to attain their goals and contributes to the achievement of the company’s strategic objectives to ensure a competitive advantage. She excels when mediating or facilitating teams.

Effective IT Communications

Empower IT employees to communicate well with any stakeholder across the organization.

Analyst perspective

There has never been an expectation for IT to communicate well.

Brittany Lutes
Research Director
Info-Tech Research Group

Diana MacPherson
Senior Research Analyst
Info-Tech Research Group

IT rarely engages in proper communications. We speak at, inform, or tell our audience what we believe to be important. But true communications seldom take place.

Communications only occur when channels are created to ensure the continuous opportunity to obtain two-way feedback. It is a skill that is developed over time, with no individual having an innate ability to be better at communications. Each person in IT needs to work toward developing their personal communications style. The problem is we rarely invest in development or training related to communications. Information and technology fields spend time and money developing hard skills within IT, not soft ones.

The benefits associated with communications are immense: higher business satisfaction, funding for IT initiatives, increased employee engagement, better IT to business alignment, and the general ability to form ongoing partnerships with stakeholders. So, for IT departments looking to obtain these benefits through true communications, develop the necessary skills.

Executive summary

Info-Tech Insight
No one is born a good communicator. Every IT employee needs to spend the time and effort to grow their communication skills as constant change and worsening IT crises mean that IT cannot afford to communicate poorly anymore.

Your challenge

Overall satisfaction with IT is correlated to satisfaction with IT communications

The bottom line? For every 10% increase in communications there 8.6% increase in overall IT satisfaction. Therefore, when IT communicates with the organization, stakeholders are more likely to be satisfied with IT overall.

Info-Tech Diagnostic Programs, N=330 organizations

IT struggles to communicate effectively with the organization:

• CIOs are given minimal time to present to the board or executive leaders about IT’s value and alignment to business goals.
• IT initiatives are considered complicated and confusing.
• The frequency and impact of IT crises are under planned for, making communications more difficult during a major incident.
• IT managers do not have the skills to communicate effectively with their team.
• IT employees do not have the skills to communicate effectively with one another and end users.

Common obstacles

IT is prevented from communicating effectively due to these barriers:

• Difficulty assessing the needs of the audience to inform the language and means of communication that should be used.
• Using technical jargon rather than translating the communication into commonly understood terms.
• Not receiving the training required to develop communication skills across IT employees.
• Frequently speak at organization stakeholders rather than engaging through dialogue.
• Beginning many communications from a blank page, especially crisis communications.
• Difficulty presenting complex concepts in a short time to an audience in a digestible and concise manner without diluting the point.

Effective IT communications are rare:

53% of CXOs believe poor communication between business and IT is a barrier to innovation.
Source: Info-Tech CEO-CIO Alignment Survey, 2022

“69% of those in management positions don’t feel comfortable even communicating with their staff.”
Source: TeamStage, 2022

Info-Tech’s approach

Effective communications is not a broadcast but a dialogue between communicator and audience in a continuous feedback loop.

The Info-Tech difference:

1. Always treat every communication as a dialogue, enabling the receiver of the message to raise questions, concerns, or ideas.
2. Different audiences will require different communications. Be sure to cater the communication to the needs of the receiver(s).
3. Never assume the communication was effective. Create measures and adjust the communications to get the desired outcome.

Common IT communications

And the less common but still important communications

Communicating Up to Board or Executives

• Board Presentations
• Executive Leadership Committee Meetings
• Technology Updates
• Budget Updates
• Risk Updates
• Year in Review

Communicating Across the Organization

• Townhalls – external to IT
• Year in Review
• Crisis Email
• Intranet Communication
• Customer/Constituent Requests for Information
• Product Launches
• Email
• Watercooler Chat

Communicating Within IT

• Townhalls – internal to IT
• Employee 1:1s
• Team Meetings
• Project Updates
• Project Collaboration Sessions
• Year in Review
• All-Hands Meeting
• Employee Interview
• Onboarding Documentation
• Vendor Negotiation Meetings
• Vendor Product Meetings
• Email
• Watercooler Chat

Insight Summary

Overarching insight
IT cannot afford to communicate poorly given the overwhelming impact and frequency of change related to technology. Learn to communicate well or get out of the way of someone who can.

Communication principles

Follow these principles to support all IT communications.

Two-Way

Incorporate feedback loops into your communication efforts. Providing stakeholders with the opportunity to voice their opinions and ideas will help gain their commitment and buy-in.

Timely

Frequent communications mitigate rumors and the spread of misinformation. Provide warning before the implementation of any changes whenever possible. Communicate as soon as possible after decisions have been made.

Consistent

Make sure the messaging is consistent across departments, mediums, and presenters. Provide managers with key phrases to support the consistency of messages.

Open & Honest

Transparency is a critical component of communication. Always tell employees that you will share information as soon as you can. This may not be as soon as you receive the information but as soon as sharing it is acceptable.

Authentic

Write messages in a way that embodies the personality of the organization. Don’t spin information; position it within the wider organizational context.

Targeted

Use your target audience profiles to determine which audiences need to consume which messages and what mediums should be employed.

Importance of IT being a good communicator

Don’t pay the price for poor communication.

IT needs to communicate well because:

• IT risk mitigation and technology initiative funding are dependent on critical stakeholders comprehending the risk impact and initiative benefit in easy-to-understand terms.
• IT employees need clear and direct information to feel empowered and accountable to do their jobs well.
• End users who have a good experience engaging in communications with IT employees have an overall increase in satisfaction with IT.
• Continuously demonstrating IT’s value to the organization comes when those initiatives are clearly aligned to overall objectives.
• Communication prevents assumptions and further miscommunication from happening among IT employees who are usually impacted and fear change the most.

“Poor communication results in employee misunderstanding and errors that cost approximately $37 billion.”
– Intranet Connections, 2019

Effective communication enables organizational strategy and facilitates a two-way exchange

What makes internal communications effective?

To be effective, internal communications must be strategic. They should directly support organizational objectives, reinforce key messages to make sure they drive action, and facilitate two-way dialogue, not just one-way messaging.

Measure the value of the communication

Communication effectiveness can be measured through a variety of metrics:

• Increase in Productivity
“When employees are offered better communication technology and skills, productivity can increase by up to 30%” (Expert Market, 2022).

• Increase in Understanding Decision Rationale
Employees who report understanding the rationale behind the business decisions made by the executive leadership team (ELT) are 3.6x more likely to be engaged, compared to those who were not (McLean & Company Engagement Survey Database, 2022; N=133,167 responses, 187 organizations).

• Increase in Revenue
Collaboration amongst C-suite executives led to a 27% increase in revenue compared to low collaborating C-suites (IBM, 2021).

• Increase in End-User Satisfaction
80.9% of end users are satisfied with IT’s ability to communicate with them regarding the information they need to perform their job (Info-Tech’s End-User Satisfaction Survey Database, N=20,617 end users from 126 organizations).

Methods to determine effectiveness:

• CIO Business Vision Survey
• Engagement surveys
• Focus groups
• Suggestion boxes
• Team meetings
• Random sampling
• Informal feedback
• Direct feedback
• Audience body language
• Repeating the message back

How to navigate the research center

This research center is intended to ensure that IT never starts their communications from a blank page again:

“‘Effectiveness’ can mean different things, and effectiveness for your project is going to look different than it would for any other project.”
– Gale McCreary in WikiHow, 2022

Audience: Organizational leadership

Speaking with Board and executive leaders about strategy, risk, and value

Keep in mind:

“Today’s CIOs have a story to tell. They must change the old narrative and describe the art of the (newly) possible. A great leader rises to the occasion and shares a vision that inspires the entire organization.”
– Dan Roberts, CIO, 2019

Communications for board presentations

Secure funding and demonstrate IT as a value add to business objectives.

DEFINING INSIGHT

Stop presenting what is important to you as the CIO and present to the board what is important to them.

Why does IT need to communicate with the board?

• To get their buy-in and funding for critical IT initiatives.
• To ensure that IT risks are understood and receive the funding necessary to mitigate.
• To change the narrative of IT as a service provider to a business enabler.

FRAMEWORK

CHECKLIST

Do’s & Don’ts of Communicating Board Presentations:

Do: Ensure you know all the members of the board and their strengths/areas of focus.

Do: Ensure the IT objectives and initiatives align to the business objectives.

Do: Avoid using any technical jargon.

Do: Limit the amount of data you are using to present information. If it can’t stand alone, it isn’t a strong enough data point.

Do: Avoid providing IT service metrics or other operational statistics.

Do: Demonstrate how the organization’s revenue is impacted by IT activities.

Do: Tell a story that is compelling and excited.

OUTCOME

Organization Alignment

• Approved organization objectives and IT objectives are aligned and supporting one another.

Stakeholder Buy-In

• Board members all understand what the future state of IT will look like – and are excited for it!

Awareness on Technology Trends

• It is the responsibility of the CIO to ensure the board is aware of critical technology trends that can impact the future of the organization/industry.

Risks

• Risks are understood, the impact they could have on the organization is clear, and the necessary controls required to mitigate the risk are funded.

Communications for business updates

Continuously build strong relationships with all members of business leadership.

DEFINING INSIGHT

Business leaders care about themselves and their goals – present ideas and initiatives that lean into this self-interest.

Why does IT need to communicate business updates?

• The key element here is to highlight how IT is impacting the organization’s overall ability to meet goals and targets.
• Ensure all executive leaders know about and understand IT’s upcoming initiatives – and how they will be involved.

FRAMEWORK

CHECKLIST

Do’s & Don’ts of Communicating Business Updates:

Do: Ensure IT is given sufficient time to present with the rest of the business leaders.

Do: Ensure the goals of IT are clear and can be depicted visually.

Do: Tie every IT goal to the objectives of different business leaders.

Do: Avoid using any technical jargon.

Do: Reinforce the positive benefits business leaders can expect.

Do: Avoid providing IT service metrics or other operational statistics.

Do: Demonstrate how IT is driving the digital transformation of the organization.

OUTCOME

Better Reputation

• Get other business leaders to see IT as a value add to any initiative, making IT an enabler not an order taker.

Executive Buy-In

• Executives are concerned about their own budgets; they want to embrace all the innovation but within reason and minimal impact to their own finances.

Digital Transformation

• Indicate and commit to how IT can help the different leaders deliver on their digital transformation activities.

Relationship Building

• Establish trust with the different leaders so they want to engage with you on a regular basis.

Audience: Organization wide

Speaking with all members of the organization about the future of technology – and unexpected crises.

Less than 50% of internal communications lean on a proper framework to support their communication activities.
– Philip Nunn, iabc, 2020

Communications for strategic IT initiatives

Communicate IT’s strategic objectives with all business stakeholders and users.

DEFINING INSIGHT

IT leaders struggle to communicate how the IT strategy is aligned to the overall business objectives using a common language understood by all.

Why does IT need to communicate its strategic objectives?

• To ensure a clear and consistent view of IT strategic objectives can be understood by all stakeholders within the organization.
• To demonstrate that IT strategic objectives are aligned with the overall mission and vision of the organization.

FRAMEWORK

CHECKLIST

Do’s & Don’ts of Communicating IT Strategic Objectives:

Do: Ensure all IT leaders are aware of and understand the objectives in the IT strategy.

Do: Ensure there is a visual representation of IT’s goals.

Do: Ensure the IT objectives and initiatives align to the business objectives.

Do: Avoid using any technical jargon.

Do: Provide metrics if they are relevant, timely, and immediately understandable.

Do: Avoid providing IT service metrics or other operational statistics.

Do: Demonstrate how the future of the organization will benefit from IT initiatives.

OUTCOME

Organization Alignment

• All employees recognize the IT strategy as being aligned, even embedded, into the overall organization strategy.

Stakeholder Buy-In

• Business and IT stakeholders alike understand what the future state of IT will look like – and are excited for it!

Role Clarity

• Employees within IT are clear on how their day-to-day activities impact the overall objectives of the organization.

Demonstrate Growth

• Focus on where IT is going to be maturing in the coming one to two years and how this will benefit all employees.

Communications for crisis management

Minimize the fear and chaos with transparent communications.

DEFINING INSIGHT

A crisis communication should fit onto a sticky note. If it’s not clear, concise, and reassuring, it won’t be effectively understood by the audience.

Why does IT need to communicate when a crisis occurs?

• To ensure all members of the organization have an understanding of what the crisis is, how impactful that crisis is, and when they can expect more information.
• “Half of US companies don’t have a crisis communication plan” (CIO, 2017).

FRAMEWORK

CHECKLIST

Do’s & Don’ts of Communicating During a Crisis:

Do: Provide timely and regular updates about the crisis to all stakeholders.

Do: Involve the Board or ELT immediately for transparency.

Do: Avoid providing too much information in a crisis communication.

Do: Have crisis communication statements ready to be shared at any time for possible or common IT crises.

Do: Highlight that employee safety and wellbeing is top priority.

Do: Work with members of the public relations team to prepare any external communications that might be required.

OUTCOME

Ready to Act

• Holding statements for possible crises will eliminate the time and effort required when the crisis does occur.

Reduce Fears

• Prevent employees from spreading concerns and not feeling included in the crisis.

Maintain Trust

• Ensure Board and ELT members trust IT to respond in an appropriate manner to any crisis or major incident.

Eliminate Negative Reactions

• Any crisis communication should be clear and concise enough when done via email.

Audience: IT employees

IT employees need to receive and obtain regular transparent communications to better deliver on their expectations.

Keep in mind:

“IT professionals who […] enroll in communications training have a chance to both upgrade their professional capabilities and set themselves apart in a crowded field of technology specialists.”
– Mark Schlesinger, Forbes, 2021

Communications for IT activities and tactics

Get IT employees aligned and clear on their daily objectives.

DEFINING INSIGHT

Depending on IT goals, the structure might need to change to support better communication among IT employees.

Why does IT need to communicate IT activities?

• To ensure all members of the project team are aligned with their tasks and responsibilities related to the project.
• To be able to identify, track, and mitigate any problems that are preventing the successful delivery of the project.

FRAMEWORK

CHECKLIST

Do’s & Don’ts of Communicating IT Activities:

Do: Provide metrics that define how success of the project will be measured.

Do: Demonstrate how each project aligns to the overarching objectives of the organization.

Do: Avoid having large meetings that include stakeholders from two or more projects.

Do: Consistently create a safe space for employees to communicate risks related to the project(s).

Do: Ensure the right tools are being leveraged for in-office, hybrid, and virtual environments to support project collaboration.

Do: Leverage a project management software to reduce unnecessary communications.

OUTCOME

Stakeholder Adoption

• Create a standard communication template so stakeholders can easily find and apply communications.

Resource Allocation

• Understand what the various asks of IT are so employees can be adequately assigned to tasks.

Meet Responsibly

• Project status meetings are rarely valuable or insightful. Use meetings for collaboration, troubleshooting, and knowledge sharing.

Encourage Engagement

• Recognize employees and their work against critical milestones, especially for projects that have a long timeline.

Communications for everyday IT

Engage employees and drive results with clear and consistent communications.

DEFINING INSIGHT

Employees are looking for empathy to be demonstrated by those they are interacting with, from their peers to managers. Yet, we rarely provide it.

Why does IT need to communicate on regularly with itself?

• Regular communication ensures employees are valued, empowered, and clear about their expectations.
• 97% of employees believe that their ability to perform their tasks efficiently is impacted by communication (Expert Market, 2022).

FRAMEWORK

CHECKLIST

Do’s & Don’ts of Communicating within IT:

Do: Have responses for likely questions prepared and ready to go.

Do: Ensure that all leaders are sharing the same messages with their teams.

Do: Avoid providing irrelevant or confusing information.

Do: Speak with your team on a regular basis.

Do: Reinforce the messages of the organization every chance possible.

Do: Ensure employees feel empowered to do their jobs effectively.

Do: Engage employees in dialogue. The worst employee experience is when they are only spoken at, not engaged with.

OUTCOME

Increased Collaboration

• Operating in a vacuum or silo is no longer an option. Enable employees to successfully collaborate and deliver holistic results.

Role Clarity

• Clear expectations and responsibilities eliminate confusion and blame game. Engage employees and create a positive work culture with role clarity.

Prevent Rumors

• Inconsistent communication often leads to information sharing and employees spreading an (in)accurate narrative.

Organizational Insight

• Employees trust the organization’s direction because they are aware of the different activities taking place and provided with a rationale about decisions.

Case Study

Amazon

INDUSTRY
E-Commerce

SOURCE
Harvard Business Review

Jeff Bezos has definitely taken on unorthodox approaches to business and leadership, but one that many might not know about is his approach to communication. Some of the key elements that he focused on in the early 2000s when Amazon was becoming a multi-billion-dollar empire included:

• Banning PowerPoint for all members of the leadership team. They had to learn to communicate without the crutch of the most commonly used presentation tool.
• Leveraging memos that included specific action steps and clear nouns
• Reducing all communication to an eighth-grade reading level, including pitches for new products (e.g. Kindle).

Results

While he was creating the Amazon empire, 85% of Jeff Bezos’ communication was written in a way that an eighth grader could read. Communicating in a way that was easy to understand and encouraging his leadership team to do so as well is one of the many reasons this business has grown to an estimated value of over $800B.

“If you cannot simplify a message and communicate it compellingly, believe me, you cannot get the masses to follow you.”
– Indra Nooyi, in Harvard Business Review, 2022

Communication competency expectations

Communication is a business skill; not a technical skill.

Source: Skills Framework for the Information Age, 2021

Key KPIs for communication with any stakeholder

Measuring communication is hard; use these to determine effectiveness.

Standard workshop communication activities

Introduction
Communications overview.

Plan
Plan your communications using a strategic tool.

Compose
Create your own message.

Deliver
Practice delivering your own message.

Contact your account representative for more information. workshops@infotech.com 1-888-670-8889

Research contributors and experts

Anuja Agrawal
National Communications Director
PwC

Anuja is an accomplished global communications professional, with extensive experience in the insurance, banking, financial, and professional services industries in Asia, the US, and Canada. She is currently the National Communications Director at PwC Canada. Her prior work experience includes communication leadership roles at Deutsche Bank, GE, Aviva, and Veritas. Anuja works closely with senior business leaders and key stakeholders to deliver measurable results and effective change and culture building programs. Anuja has experience in both internal and external communications, including strategic leadership communication, employee engagement, PR and media management, digital and social media, and M&A/change and crisis management. Anuja believes in leveraging digital tools and technology-enabled solutions, combined with in-person engagement, to help improve the quality of dialogue and increase interactive communication within the organization to help build an inclusive culture of belonging.

Nastaran Bisheban
Chief Technology Officer
KFC Canada

A passionate technologist, and seasoned transformational leader. A software engineer and computer scientist by education, a certified Project Manager that holds an MBA in Leadership with Honors and Distinction from University of Liverpool. A public speaker on various disciplines of technology and data strategy with a Harvard Business School executive leadership program training to round it all. Challenges status quo and conventional practices; is an advocate for taking calculated risk and following the principle of continuous improvement. With multiple computer software and project management publications she is a strategic mentor and board member on various non-profit organizations. Nastaran sees the world as a better place only when everyone has a seat at the table and is an active advocate for diversity and inclusion.

Heidi Davidson
Co-Founder & CEO
Galvanize Worldwide and Galvanize On Demand

Dr. Heidi Davidson is the co-founder and CEO of Galvanize Worldwide, the largest distributed network of marketing and communications experts in the world. She also is the co-founder and CEO of Galvanize On Demand, a tech platform that matches marketing and communications freelancers with client projects. Now with 167 active experts, the Galvanize team delivers startup advisory work, outsourced marketing, training, and crisis communications to organizations of all sizes. Before Galvanize, Heidi spent four years as part of the turnaround team at BlackBerry as the Chief Communications Officer and SVP of Corporate Marketing, where she helped the company move from a device manufacturer to a security software provider.

Eli Gladstone
Co-Founder
Speaker Labs

Eli is a co-founder of Speaker Labs. He has spent over six years helping countless individuals overcome their public speaking fears and communicate with clarity and confidence. When he’s not coaching others on how to build and deliver the perfect presentation, you’ll probably find him reading some weird books, teaching his kids how to ski or play tennis, or trying to develop a good-enough jumpshot to avoid being a liability on the basketball court.

Francisco Mahfuz
Keynote Speaker & Storytelling Coach

Francisco Mahfuz has been telling stories in front of audiences for a decade and even became a National Champion of public speaking. Today, Francisco is a keynote speaker and storytelling coach and offers communication training to individuals and international organizations and has worked with organizations like Pepsi, HP, the United Nations, Santander, and Cornell University. He’s the author of Bare: A Guide to Brutally Honest Public Speaking and the host of The Storypowers Podcast, and he’s been part of the IESE MBA communications course since 2020. He’s received a BA in English Literature from Birkbeck University in London.

Sarah Shortreed
EVP & CTO
ATCO Ltd.

Sarah Shortreed is ATCO’s Executive Vice President and Chief Technology Officer. Her responsibilities include leading ATCO’s Information Technology (IT) function as it continues to drive agility and collaboration throughout ATCO’s global businesses and expanding and enhancing its enterprise IT strategy, including establishing ATCO’s technology roadmap for the future. Ms. Shortreed’s skill and expertise are drawn from her more than 30-year career that spans many industries and includes executive roles in business consulting, complex multi-stakeholder programs, operations, sales, customer relationship management, and product management. She was recently the Chief Information Officer at Bruce Power and has previously worked at BlackBerry, IBM, and Union Gas. She sits on the Board of Governors for the University of Western Ontario and is the current Chair of the Chief Information Officer (CIO) Committee at the Conference Board of Canada.

Eric Silverberg
Co-Founder
Speaker Labs

Eric is a co-founder of Speaker Labs and has helped thousands of people build their public speaking confidence and become more dynamic and engaging communicators. When he’s not running workshops to help people grow in their careers, there’s a good chance you’ll find him with his wife and dog, drinking Diet Coke, and rewatching iconic episodes of the reality TV show Survivor! He’s such a die-hard fan, that you’ll probably see him playing the game one day.

Stephanie Stewart
Communications Officer & DR Coordinator
Info Security Services Simon Fraser University

Steve Strout
President
Miovision Technologies

Mr. Strout is a recognized and experienced technology leader with extensive experience in delivering value. He has successfully led business and technology transformations by leveraging many dozens of complex global SFDC, Oracle, and SAP projects. He is especially adept at leading what some call “Project Rescues” – saving people’s careers where projects have gone awry; always driving “on-time and on-budget.” Mr. Strout is the current President of Miovision Technologies and the former CEO and board member of the Americas’ SAP Users” Group (ASUG). His wealth of practical knowledge comes from 30 years of extensive experience in many CxO and executive roles at some prestigious organizations such as Vonage, Sabre, BlackBerry, Shred-it, The Thomson Corporation (now Thomson Reuters), and Morris Communications. He has served on boards including Customer Advisory Boards of Apple, AgriSource Data, Dell, Edgewise, EMC, LogiSense, Socrates.ai, Spiro Carbon Group, and Unifi.

Info-Tech Research Group Contributors:

Plus an additional two contributors who wish to remain anonymous.

Related Info-Tech Research

Boardroom Presentation Review

• You will come away with a clear, concise, and compelling board presentation that IT leaders can feel confident presenting in front of their board of directors.
• Add improvements to your current board presentation in terms of visual appeal and logical flow to ensure it resonates with your board of directors.
• Leverage a best-of-breed presentation template.

Build a Better Manager

• Management skills training is needed, but organizations are struggling to provide training that makes a long-term difference in the skills managers actually use in their day to day.
• Many training programs are ineffective because they offer the wrong content, deliver it in a way that is not memorable, and are not aligned with the IT department’s business objectives.

Crisis Communication Guides

During a crisis it is important to communicate to employees through messages that convey calm and are transparent and tailored to your audience. Use the Crisis Communication Guides to:

• Draft a communication strategy.
• Tailor messages to your audience.
• Draft employee crisis communications.

Bibliography

“Communication in the Workplace Statistics: Importance and Effectiveness in 2022.” TeamStage, 2022.

Gallo, Carmine. “How Great Leaders Communicate.” Harvard Business Review, 23 November 2022

Guthrie, Georgina. “Why Good Internal Communications Matter Now More than Ever.” Nulab, 15 December 2021.

Lambden, Duncan. “The Importance of Effective Workplace Communication – Statistics for 2022.” Expert Market, 13 June 2022.

“Mapping SFIA Levels of Responsibilities to Behavioural Factors.” Skills Framework for the Information Age, 2021.

McCreary, Gale. “How to Measure the Effectiveness of Communication: 14 Steps.” WikiHow, 31 March 2023.

Nowak, Marcin. “Top 7 Communication Problems in the Workplace.” MIT Enterprise Forum CEE, 2021.

Nunn, Philip. “Messaging That Works: A Unique Framework to Maximize Communication Success.” iabc, 26 October 2020.

Picincu, Andra. “How to Measure Effective Communications.” Small Business Chron. 12 January 2021.

Price. David A. “Pixar Story Rules.” Stories From the Frontiers of Knowledge, 2011.

Roberts, Dan. “How CIOs Become Visionary Communicators.” CIO, 2019.

Schlesinger, Mark. “Why building effective communication skill in IT is incredibly important.” Forbes, 2021.

Stanten, Andrew. “Planning for the Worst: Crisis Communications 101.” CIO, 25 May 2017.

State of the American Workplace Report. Gallup, 6 February 2020.

“The CIO Revolution.” IBM, 2021.

“The State of High Performing Teams in Tech 2022.” Hypercontex, 2022.

Walters, Katlin. “Top 5 Ways to Measure Internal Communication.” Intranet Connections, 30 May 2019.

Redesign Your IT Organizational Structure

Designing an IT structure that will enable your strategic vision is not about an org chart – it’s about how you work.

EXECUTIVE BRIEF

Analyst Perspective

Structure enables strategy.

Allison Straker

Research Director,

Organizational Transformation

Brittany Lutes

Senior Research Analyst,

Organizational Transformation

An organizational structure is much more than a chart with titles and names. It defines the way that the organization operates on a day-to-day basis to enable the successful delivery of the organization’s information and technology objectives. Moreover, organizational design sees beyond the people that might be performing a specific role. People and role titles will and often do change frequently. Those are the dynamic elements of organizational design that allow your organization to scale and meet specific objectives at defined points of time. Capabilities, on the other hand, are focused and related to specific IT processes.

Redesigning an IT organizational structure can be a small or large change transformation for your organization. Create a structure that is equally mindful of the opportunities and the constraints that might exist and ensure it will drive the organization towards its vision with a successful implementation. If everyone understands why the IT organization needs to be structured that way, they are more likely to support and adopt the behaviors required to operate in the new structure.

Executive Summary

Your Challenge

Your organization needs to reorganize itself because:

• The current IT structure does not align to the strategic objectives of the organization.
• There are inefficiencies in how the IT function is currently operating.
• IT employees are unclear about their role and responsibilities, leading to inconsistencies.
• New capabilities or a change in how the capabilities are organized is required to support the transformation.

Common Obstacles

Many organizations struggle when it comes redesigning their IT organizational structure because they:

• Jump right into creating the new organizational chart.
• Do not include the members of the IT leadership team in the changes.
• Do not include the business in the changes.
• Consider the context in which the change will take place and how to enable successful adoption.

Info-Tech’s Approach

Successful IT organization redesign includes:

• Understanding the drivers, context, and strategies that will inform the structure.
• Remaining objective by focusing on capabilities over people or roles.
• Identifying gaps in delivery, sourcing strategies, customers, and degrees of centralization.
• Remembering that organizational design is a change initiative and will require buy-in.

Info-Tech Insight

A successful redesign requires a strong foundation and a plan to ensure successful adoption. Without these, the organizational chart has little meaning or value.

Your challenge

This research is designed to help organizations who are looking to:

• Redesign the IT structure to align to the strategic objectives of the enterprise.
• Increase the effectiveness in how the IT function is operating in the organization.
• Provide clarity to employees around their roles and responsibilities.
• Ensure there is an ability to support new IT capabilities and/or align capabilities to better support the direction of the organization.
• Align the IT organization to support a business transformation such as becoming digitally enabled or engaging in M&A activities.

Organizational design is a challenge for many IT and digital executives

69% of digital executives surveyed indicated challenges related to structure, team silos, business-IT alignment, and required roles when executing on a digital strategy.

Source: MIT Sloan, 2020

Common obstacles

These barriers make IT organizational redesign difficult to address for many organizations:

• Confuse organizational design and organizational charts as the same thing.
• Start with the organizational chart, not taking into consideration the foundational elements that will make that chart successful.
• Fail to treat organizational redesign as a change management initiative and follow through with the change.
• Exclude impacted or influential IT leaders and/or business stakeholders from the redesign process.
• Leverage an operating model because it is trending.

To overcome these barriers:

• Understand the context in which the changes will take place.
• Communicate the changes to those impacted to enable successful adoption and implementation of a new organizational structure.
• Understand that organizational design is for more than just HR leaders now; IT executives should be driving this change.

Succeed in Organizational Redesign

75% The percentage of change efforts that fail.

Source: TLNT, 2019

55% The percentage of practitioners who identify how information flows between work units as a challenge for their organization.

Source: Journal of Organizational Design, 2019

Organizational design defined

If your IT strategy is your map, your IT organizational design represents the optimal path to get there.

IT organizational design refers to the process of aligning the organization’s structure, processes, metrics, and talent to the organization’s strategic plan to drive efficiency and effectiveness.

Understand the organizational differences

Organizational Design

Organizational design the process in which you intentionally align the organizational structure to the strategy. It considers the way in which the organization should operate and purposely aligns to the enterprise vision. This process often considers centralization, sourcing, span of control, specialization, authority, and how those all impact or are impacted by the strategic goals.

Operating Model

Operating models provide an architectural blueprint of how IT capabilities are organized to deliver value. The placement of the capabilities can alter the culture, delivery of the strategic vision, governance model, team focus, role responsibility, and more. Operating model sketches should be foundational to the organizational design process, providing consistency through org chart changes.

Organizational Structure

The organizational structure is the chosen way of aligning the core processes to deliver. This can be strategic, or it can be ad hoc. We recommend you take a strategic approach unless ad hoc aligns to your culture and delivery method. A good organizational structure will include: “someone with authority to make the decisions, a division of labor and a set of rules by which the organization operates” (Bizfluent, 2019).

Organizational Chart

The capstone of this change initiative is an easy-to-read chart that visualizes the roles and reporting structure. Most organizations use this to depict where individuals fit into the organization and if there are vacancies. While this should be informed by the structure it does not necessarily depict workflows that will take place. Moreover, this is the output of the organizational design process.

Sources: Bizfluent, 2019; Strategy & Business, 2015; SHRM, 2021

The Technology Value Trinity

All three elements of the Technology Value Trinity work in harmony to delivery business value and achieve strategic needs. As one changes, the others need to change as well.

How do these three elements relate?

• Digital and IT strategy tells you what you need to achieve to be successful.
• Operating model and organizational design align resources to deliver on your strategy and priorities. This is done by strategically structuring IT capabilities in a way that enables the organizations vision and considers the context in which the structure will operate.
• I&T governance is the confirmation of IT’s goals and strategy, which ensures the alignment of IT and business strategy and is the mechanism by which you continuously prioritize work to ensure that what is delivered is in line with the strategy.

Too often strategy, organizational design, and governance are considered separate practices – strategies are defined without teams and resources to support. Structure must follow strategy.

Info-Tech’s approach to organizational design

Like a story, a strategy without a structure to deliver on it is simply words on paper.

Books begin by setting the foundation of the story.

Introduce your story by:

• Defining the need(s) that are driving this initiative forward.
• Introducing the business context in which the organizational redesign must take place.
• Outlining what’s needed in the redesign to support the organization in reaching its strategic IT goals.

The plot cannot thicken without the foundation. Your organizational structure and chart should not exist without one either.

The steps to establish your organizational chart - with functional teams, reporting structure, roles, and responsibilities defined – cannot occur without a clear definition of goals, need, and context. An organizational chart alone won’t provide the insight required to obtain buy-in or realize the necessary changes.

Conclude your story through change management and communication.

Good stories don’t end without referencing what happened before. Use the literary technique of foreshadowing – your change management must be embedded throughout the organizational redesign process. This will increase the likelihood that the organizational structure can be communicated, implemented, and reinforced by stakeholders.

Info-Tech uses a capability-based approach to help you design your organizational structure

Once your IT strategy is defined, it is critical to identify the capabilities that are required to deliver on those strategic initiatives. Each initiative will require a combination of these capabilities that are only supported through the appropriate organization of roles, skills, and team structures.

Embed change management into organizational design

Change management practices are needed from the onset to ensure the implementation of an organizational structure.

For each phase of this blueprint, its important to consider change management. These are the points when you need to communicate the structure changes:

• Phase 1: Begin to socialize the idea of new organizational structure with executive leadership and explain how it might be impactful to the context of the organization. For example, a new control, governance model, or sourcing approach could be considered.
• Phase 2: The chosen operating model will influence your relationships with the business and can create/eliminate silos. Ensure IT and business leaders have insight into these possible changes and a willingness to move forward.
• Phase 3: The new organizational structure could create or eliminate teams, reduce or increase role responsibilities, and create different reporting structures than before. It’s time to communicate these changes with those most impacted and be able to highlight the positive outcomes of the various changes.
• Phase 4: Should consider the change management practices holistically. This includes the type of change and length of time to reach the end state, communication, addressing active resistors, acquiring the right skills, and measuring the success of the new structure and its adoption.

Info-Tech Insight

Do not undertake an organizational redesign initiative if you will not engage in change management practices that are required to ensure its successful adoption.

Measure the value of the IT organizational redesign

Given that the organizational redesign is intended to align with the overall vision and objectives of the business, many of the metrics that support its success will be tied to the business. Adapt the key performance indicators (KPIs) that the business is using to track its success and demonstrate how IT can enable the business and improve its ability to reach those targets.

Strategic Resources

The percentage of resources dedicated to strategic priorities and initiatives supported by IT operating model. While operational resources are necessary, ensuring people are allocating time to strategic initiatives as well will drive the business towards its goal state. Leverage Info-Tech’s IT Staffing Assessment diagnostic to benchmark your IT resource allocation.

Business Satisfaction

Assess the improvement in business satisfaction overall with IT year over year to ensure the new structure continues to drive satisfaction across all business functions. Leverage Info-Tech’s CIO Business Vision diagnostic to see how your IT organization is perceived.

Role Clarity

The degree of clarity that IT employees have around their role and its core responsibilities can lead to employee engagement and retention. Consider measuring this core job driver by leveraging Info-Tech’s Employee Engagement Program.

Customer & User Satisfaction

Measure customer satisfaction with technology-enabled business services or products and improvements in technology-enabled client acquisition or retention processes. Assess the percentage of users satisfied with the quality of IT service delivery and leverage Info-Tech’s End-User Satisfaction Survey to determine improvements.

Info-Tech’s methodology for Redesigning Your IT Organization

Insight summary

Overarching insight

Organizational redesign processes focus on defining the ways in which you want to operate and deliver on your strategy – something an organizational chart will never be able to convey.

Phase 1 insight

Focus on your organization, not someone else's’. Benchmarking your organizational redesign to other organizations will not work. Other organizations have different strategies, drivers, and context.

Phase 2 insight

An operating model sketch that is customized to your organization’s specific situation and objectives will significantly increase the chances of creating a purposeful organizational structure.

Phase 3 insight

If you follow the steps outlined in the first three phases, creating your new organizational chart should be one of the fastest activities.

Phase 4 insight

Throughout the creation of a new organizational design structure, it is critical to involve the individuals and teams that will be impacted.

Tactical insight

You could have the best IT employees in the world, but if they aren’t structured well your organization will still fail in reaching its vision.

Blueprint deliverables

Each step of this blueprint is accompanied by supporting deliverables to help you accomplish your goals:

Communication Deck

Communicate the changes to other key stakeholders such as peers, managers, and staff.

Workbook

As you work through each of the activities, use this workbook as a place to document decisions and rationale.

Reference Deck

Definitions for every capability, base operating model sketches, and sample organizational charts aligned to those operating models.

Job Descriptions

Key deliverable:

Executive Presentation

Leverage this presentation deck to gain executive buy-in for your new organizational structure.

Blueprint benefits

IT Benefits

• Create an organizational structure that aligns to the strategic goals of IT and the business.
• Provide IT employees with clarity on their roles and responsibilities to ensure the successful delivery of IT capabilities.
• Highlight and sufficiently staff IT capabilities that are critical to the organization.
• Define a sourcing strategy for IT capabilities.
• Increase employee morale and empowerment.

Business Benefits

• IT can carry out the organization’s strategic mission and vision of all technical and digital initiatives.
• Business has clarity on who and where to direct concerns or questions.
• Reduce the likelihood of turnover costs as IT employees understand their roles and its importance.
• Create a method to communicate how the organizational structure aligns with the strategic initiatives of IT.
• Increase ability to innovate the organization.

Executive Brief Case Study

IT design needs to support organizational and business objectives, not just IT needs.

INDUSTRY: Government

SOURCE: Analyst Interviews and Working Sessions

Situation

IT was tasked with providing equality to the different business functions through the delivery of shared IT services. The government created a new IT organizational structure with a focus on two areas in particular: strategic and operational support capabilities.

Challenge

When creating the new IT structure, an understanding of the complex and differing needs of the business functions was not reflected in the shared services model.

Outcome

As a result, the new organizational structure for IT did not ensure adequate meeting of business needs. Only the operational support structure was successfully adopted by the organization as it aligned to the individual business objectives. The strategic capabilities aspect was not aligned to how the various business lines viewed themselves and their objectives, causing some partners to feel neglected.

Info-Tech offers various levels of support to best suit your needs.

DIY Toolkit

"Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful."

Guided Implementation

"Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track."

Workshop

"We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place."

Consulting

"Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project."

Diagnostics and consistent frameworks are used throughout all four options.

Guided Implementation

What does a typical GI on this topic look like?

A Guided Implementation (GI) is a series of calls with an Info-Tech analyst to help implement our best practices in your organization. A typical GI is 8 to 12 calls over the course of 4 to 6 months.

Phase 1

Call #1: Define the process, understand the need, and create a plan of action.

Phase 2

Call #2: Define org. design drivers and business context.

Call #3: Understand strategic influences and create customized design principles.

Call #4: Customize, analyze gaps, and define sourcing strategy for IT capabilities.

Call #5: Select and customize the IT operating model sketch.

Phase 3

Call #6: Establish functional work units and their mandates.

Call #7: Translate the functional organizational chart to an operational organizational chart with defined roles.

Phase 4

Call #8: Consider risks and mitigation tactics associated with the new structure and select a transition plan.

Call #9: Create your change message, FAQs, and metrics to support the implementation plan.

Workshop Overview

Contact your account representative for more information.

workshops@infotech.com 1-888-670-8889

This blueprint is part one of a three-phase approach to organizational transformation

Risk Management: Create, implement, and monitor risk management plan.

HR Management: Develop job descriptions, conduct job evaluation, and develop compensation packages.

Monitor and Sustain Stakeholder Engagement

Phase 1

Establish the Organizational Redesign Foundation

This phase will walk you through the following activities:

1.1 Define the organizational redesign driver(s)

1.2 Create design principles based on the business context

1.3a (Optional Exercise) Identify the capabilities from your value stream

1.3b Identify the capabilities required to deliver on your strategies

1.4 Finalize your list of design principles

This phase involves the following participants:

• CIO
• IT Leadership
• Business Leadership

Embed change management into the organizational design process

Articulate the Why

Changes are most successful when leaders clearly articulate the reason for the change – the rationale for the organizational redesign of the IT function. Providing both staff and executive leaders with an understanding for this change is imperative to its success. Despite the potential benefits to a redesign, they can be disruptive. If you are unable to answer the reason why, a redesign might not be the right initiative for your organization.

Employees who understand the rationale behind decisions made by executive leaders are 3.6 times more likely to be engaged.

McLean & Company Engagement Survey Database, 2021; N=123,188

Info-Tech Insight

Successful adoption of the new organizational design requires change management from the beginning. Start considering how you will convey the need for organizational change within your IT organization.

The foundation of your organizational design brings together drivers, context, and strategic implications

All aspects of your IT organization’s structure should be designed with the business’ context and strategic direction in mind.

Use the following set of slides to extract the key components of your drivers, business context, and strategic direction to land on a future structure that aligns with the larger strategic direction.

REDESIGN DRIVERS

Driver(s) can originate from within the IT organization or externally. Ensuring the driver(s) are easy to understand and articulate will increase the successful adoption of the new organizational structure.

BUSINESS CONTEXT

Defines the interactions that occur throughout the organization and between the organization and external stakeholders. The context provides insight into the environment by both defining the purpose of the organization and the values that frame how it operates.

STRATEGY IMPLICATIONS

The IT strategy should be aligned to the overall business strategy, providing insight into the types of capabilities required to deliver on key IT initiatives.

Understand IT’s desired maturity level, alignment with business expectations, and capabilities of IT

Where are we today?

Determine the current overall maturity level of the IT organization.

Where do we want to be as an organization?

Use the inputs from Info-Tech’s diagnostic data to determine where the organization should be after its reorganization.

How can you leverage these results?

The result of these diagnostics will inform the design principles that you’ll create in this phase.

Leverage Info-Tech’s diagnostics to provide an understanding of critical areas your redesign can support:

CIO Business Vision Diagnostic

Management & Governance Diagnostic

IT Staffing Diagnostic

Consider the organizational design drivers

Consider organizational redesign if …

Effectiveness is a concern:

• Insufficient resources to meet demand
• Misalignment to IT (and business) strategies
• Lack of clarity around role responsibility or accountability
• IT functions operating in silos

New capabilities are needed:

• Organization is taking on new capabilities (digital, transformation, M&A)
• Limited innovation
• Gaps in the capabilities/services of IT
• Other external environmental influences or changes in strategic direction

Lack of business understanding

• Misalignment between business and IT or how the organization does business
• Unhappy customers (internal or external)

Workforce challenges

• Frequent turnover or inability to attract new skills
• Low morale or employee empowerment

These are not good enough reasons …

• New IT leader looking to make a change for the sake of change or looking to make their legacy known
• To work with specific/hand-picked leaders over others
• To “shake things up” to see what happens
• To force the organization to see IT differently

Info-Tech Insight

Avoid change for change’s sake. Restructuring could completely miss the root cause of the problem and merely create a series of new ones.

1.1 Define the organizational redesign driver(s)

1-2 hours

1. As a group, brainstorm a list of current pain points or inhibitors in the current organizational structure, along with a set of opportunities that can be realized during your restructuring. Group these pain points and opportunities into themes.
2. Leverage the pain points and opportunities to help further define why this initiative is something you’re driving towards. Consider how you would justify this initiative to different stakeholders in the organization.
3. Questions to consider:
1. Who is asking for this initiative?
2. What are the primary benefits this is intended to produce?
3. What are you optimizing for?
4. What are we capable of achieving as an IT organization?
5. Are the drivers coming from inside or outside the IT organization?
4. Once you’ve determined the drivers for redesigning the IT organization, prioritize those drivers to ensure there is clarity when communicating why this is something you are focusing time and effort on.

Record the results in the Organizational Design Communications Deck

Frame the organizational design within the context of the business

Workforce Considerations:

• How does your organization view its people resources? Does it have the capacity to increase the number of resources?
• Do you currently have sufficient staff to meet the demands of the organization? Are you able to outsource resources when demand requires it?
• Are the members of your IT organization unionized?
• Is your workforce distributed? Do time zones impact how your team can collaborate?

Business context considerations

Business context considerations

Business context considerations

Business context considerations

Business context considerations

1.2 Create design principles based on the business context

1-3 hours

1. Discuss the business context in which the IT organizational redesign will be taking place. Consider the following standard components of the business context; include other relevant components specific to your organization:

• Culture
• Workforce Considerations
• Control and Governance
• Financial Constraints
• Business Perspective of IT
• Business Organization Structure and Growth
• Sourcing Strategy
• Change Tolerance
• Stakeholder Engagement and Focus
• Business Vision, Services, and Products

Record the results in the Organizational Design Communications Deck

How your IT organization is structured needs to reflect what it must be built to do

Structure follows strategy – the way you design will impact what your organization can produce.

Designing your IT organization requires an assessment of what it needs to be built to do:

• What are the most critical capabilities that you need to deliver, and what does success look like in those different areas?
• What are the most important things that you deliver overall in your organization?

The IT organization must reflect your business needs:

• Understand your value stream and/or your prioritized business goals.
• Understand the impact of your strategies – these can include your overall digital strategy and/or your IT strategy

1.3a (Optional Exercise) Identify the capabilities from your value stream

1 hour

1. Identify your organization’s value stream – what your overall organization needs to do from supplier to consumer to provide value. Leverage Info-Tech’s industry reference architectures if you haven’t identified your value stream, or use the Document Your Business Architecture blueprint to create yours.
2. For each item in your value stream, list capabilities that are critical to your organizational strategy and IT needs to further invest in to enable growth.
3. Also, list those that need further support, e.g. those that lead to long wait times, rework time, re-tooling, down-time, unnecessary processes, unvaluable processes.*
4. Capture the IT capabilities required to enable your business in your draft principles.

Source: Six Sigma Study Guide, 2014

Record the results in the Organizational Design Communications Deck

Your strategy will help you decide on your structure

Ensure that you have a clear view of the goals and initiatives that are needed in your organization. Your IT, digital, business, and/or other strategies will surface the IT capabilities your organization needs to develop. Identify the goals of your organization and the initiatives that are required to deliver on them. What capabilities are required to enable these? These capabilities will need to be reflected in your design principles.

Sample initiatives and capabilities from an organization’s strategies

1.3b Identify the capabilities required to deliver on your strategies

1 hour

1. For each IT goal, there may be one or more initiatives that your organization will need to complete in order to be successful.
2. Document those goals and infinitives. For each initiative, consider which core IT capabilities will be required to deliver on that goal. There might be one IT capability or there might be several.
3. Identify which capabilities are being repeated across the different initiatives. Consider whether you are currently investing in those capabilities in your current organizational structure.
4. Highlight the capabilities that require IT investment in your design principles.

Record the results in the Organizational Design Communications Deck

Create your organizational design principles

Your organizational design principles should define a set of loose rules that can be used to design your organizational structure to the specific needs of the work that needs to be done. These rules will guide you through the selection of the appropriate operating model that will meet your business needs. There are multiple ways you can hypothetically organize yourself to meet these needs, and the design principles will point you in the direction of which solution is the most appropriate as well as explain to your stakeholders the rationale behind organizing in a specific way. This foundational step is critical: one of the key reasons for organizational design failure is a lack of requisite time spent on the front-end understanding what is the best fit.

1.4 Finalize your list of design principles

1-3 hours

1. As a group, review the key outputs from your data collection exercises and their implications.
2. Consider each of the previous exercises – where does your organization stand from a maturity perspective, what is driving the redesign, what is the business context, and what are the key IT capabilities requiring support. Identify how each will have an implication on your organizational redesign. Leverage this conversation to generate design principles.
3. Vote on a finalized list of eight to ten design principles that will guide the selection of your operating model. Have everyone leave the meeting with these design principles so they can review them in more detail with their work units or functional areas and elicit any necessary feedback.
4. Reconvene the group that was originally gathered to create the list of design principles and make any final amendments to the list as necessary. Use this opportunity to define exactly what each design principle means in the context of your organization so everyone has the same understanding of what this means moving forward.

Record the results in the Organizational Design Communications Deck

Example design principles

Your eight to ten design principles will be those that are most relevant to YOUR organization. Below are samples that other organizations have created, but yours will not be the same.

Phase 2

Create the Operating Model Sketch

This phase will walk you through the following activities:

2.1 Augment the capability list

2.2 Heatmap capabilities to determine gaps in service

2.3 Identify the target state of sourcing for your IT capabilities

2.4 Review and select a base operating model sketch

2.5 Customize the selected overlay to reflect the desired future state

This phase involves the following participants:

• CIO
• IT Leadership

Embed change management into the organizational design process

Gain Buy-In

Obtain desire from stakeholders to move forward with organizational redesign initiative by involving them in the process to gain interest. This will provide the stakeholders with assurance that their concerns are being heard and will help them to understand the benefits that can be anticipated from the new organizational structure.

“You’re more likely to get buy-in if you have good reason for the proposed changes – and the key is to emphasize the benefits of an organizational redesign.”

Source: Lucid Chart

Info-Tech Insight

Just because people are aware does not mean they agree. Help different stakeholders understand how the change in the organizational structure is a benefit by specifically stating the benefit to them.

Info-Tech uses capabilities in your organizational design

We differentiate between capabilities and competencies.

Capabilities

• Capabilities are focused on the entire system that would be in place to satisfy a particular need. This includes the people who are competent to complete a specific task and also the technology, processes, and resources to deliver.
• Capabilities work in a systematic way to deliver on specific need(s).
• A functional area is often made up of one or more capabilities that support its ability to deliver on that function.
• Focusing on capabilities rather then the individuals in organizational redesign enables a more objective and holistic view of what your organization is striving toward.

Competencies

• Competencies on the other hand are specific to an individual. It determines if the individual poses the skills or ability to perform.
• Competencies are rooted in the term competent, which looks to understand if you are proficient enough to complete the specific task at hand.

Source: The People Development Magazine, 2020

Use our IT capabilities to establish your IT organization design

2.1 Augment the capability list

1-3 hours

1. Using the capability list on the previous slide, go through each of the IT capabilities and remove any capabilities for which your IT organization is not responsible and/or accountable. Refer to the Operating Model and Capability Definition List for descriptions of each of the IT capabilities.
2. Augment the language of specific capabilities that you feel are not directly reflective of what is being done within your organizational context or that you feel need to be changed to reflect more specifically how work is being done in your organization.

• For example, some organizations may refer to their service desk capability as help desk or regional support. Use a descriptive term that most accurately reflects the terminology used inside the organization today.

• For example, organizations that leverage DevOps capabilities for their product development may desire to designate this in their operating model.

Record the results in the Organizational Design Workbook

Gaps in delivery

Identify areas that require greater focus and attention.

Assess the gaps between where you currently are and where you need to be. Evaluate how critical and how effective your capabilities are:

• Criticality = Importance
• Try to focus on those which are highly critical to the organization.
• These may be capabilities that have been identified in your strategies as areas to focus on.
• Effectiveness = Performance
• Identify those where the process or system is broken or ineffective, preventing the team from delivering on the capability.
• Effectiveness could take into consideration how scalable, adaptable, or sustainable each capability is.
• Focus on the capabilities that are low or medium in effectiveness but highly critical. Addressing the delivery of these capabilities will lead to the most positive outcomes in your organization.

Remember to identify what allows the highly effective capabilities to perform at the capacity they are. Leverage this when increasing effectiveness elsewhere.

High Gap

There is little to no effectiveness (high gap) and the capability is highly important to your organization.

Medium Gap

Current ability is medium in effectiveness (medium gap) and there might be some priority for that capability in your organization.

Low Gap

Current ability is highly effective (low gap) and the capability is not necessarily a priority for your organization.

2.2 Heatmap capabilities to determine gaps in delivery

1-3 hours

1. At this point, you should have identified what capabilities you need to have to deliver on your organization's goals and initiatives.
2. Convene a group of the key stakeholders involved in the IT organizational design initiative.
3. Review your IT capabilities and color each capability border according to the effectiveness and criticality of that capability, creating a heat map.

• Green indicates current ability is highly effective (low gap) and the capability is not necessarily a priority for your organization.
• Yellow indicates current ability is medium in effectiveness (medium gap) and there might be some priority for that capability in your organization.
• Red indicates that there is little to no effectiveness (high gap) and the capability is highly important to your organization.

Record the results in the Organizational Design Workbook

Don’t forget the why: why are you considering outsourcing?

There are a few different “types” of outsourcing:

1. Competitive Advantage – Working with a third-party organization for the knowledge, insights, and best practices they can bring to your organization.
2. Managed Service– The third party manages a capability or function for your organization.
3. Staff Augmentation – Your organization brings in contractors and third-party organizations to fill specific skills gaps.

Weigh which sourcing model(s) will best align with the needed capabilities to deliver effectively

Your strategy for outsourcing will vary with capability and capacity

Use these criteria to inform your right sourcing strategy

2.3 Identify capabilities that could be outsourced

1-3 hours

1. For each of the capabilities that will be in your future-state operating model, determine if it could be outsourced. Review the sourcing criteria available on the previous slide to help inform which sourcing strategy you will use for each capability.
2. When looking to outsource or co-source capabilities, consider why that capability would be outsourced:

• Competitive Advantage – Work with a third-party organization for the knowledge, insights, and best practices they can bring to your organization.
• Managed Service – The third party manages a capability or function for your organization.
• Staff Augmentation – Your organization brings in contractors and third-party organizations to fill specific skills gaps.

Record the results in the Organizational Design Workbook

What is an operating model?

Leverage a cohesive operating model throughout the organizational design process.

An IT operating model sketch is a visual representation of the way your IT organization needs to be designed and the capabilities it requires to deliver on the business mission, strategic objectives, and technological ambitions. It ensures consistency of all elements in the organizational structure through a clear and coherent blueprint.

The visual should be the optimization and alignment of the IT organization’s structure to deliver the capabilities required to achieve business goals. Additionally, it should clearly show the flow of work so that key stakeholders can understand where inputs flow in and outputs flow out of the IT organization. Investing time in the front end getting the operating model right is critical. This will give you a framework to rationalize future organizational changes, allowing you to be more iterative and your model to change as the business changes.