05 Okt

From Project to Product

From project to product touches the mindset of goal setting, performance measurement, organization and budgeting.

By just calling a software development project now a product development the idea is not fully covered. Projects are limited in time by a fixed goal that a temporary team will reach in a planned amount of time and money. The goal, performance and as well as the success is measured if the team manages to produce the software towards the 2-year-old spec in the proposed time and spend the money as accurate as possible.

BUT success is value of the resulting software (the product) instead of the accuracy of real live to a plan that was generated inside of the own organization.

Changing the temporary team structure of the project into a stable organization change the mindset of the team. The new org fight for long term funding as part of the company organization itself. This product becomes a purpose. Measurement of success of such a product must take the customer into account – not the own plan.

Larger organizations change their way of budgeting from target-budget for an organization to a charging-based model (see Alex Adamopoulos “The Role Of IT Leaders Through A Project-To-Product Transformation“) . Products and services are financially evaluated and charged across in the organization.  That will foster the mindset of a valuable product and the market principles inside of a larger organization. That drive a shift to continually fund your products like an investment portfolio. Investing will be done wherever you think you’ll create the most positive change within your organization. This is a trend I’m seeing across organizations as well as in various sectors.

Organizations follow purpose. Products are the purpose. Performance will be measured based on value the products will produce. Organizations are more fluently than products. In larger companies the transparency of value generating products will be enhanced.

Processes will become less important. The product teams can optimize themselves how they will produce the products. Efficiency management like the last 30 years on enterprise wide organizations will be replaced by effectiveness management of the product portfolio. Product funding will replace organization budgeting on the long run.

Efficiency Project management process of a stable organization will be transformed into a portfolio of self-organized product teams. Enterprises optimize on large scale on effectiveness of their product portfolio. Self-organized product teams optimize for efficient product development.

see also “Project to Product” by Mik Kersten

 

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