Insights
Project to products: The strategic transition in digital app development
UST Product Engineering
In today’s highly demanding world, making this approach switch can prove crucial in improving the odds for both individuals and organizations as they set themselves up for success and sustained growth.
UST Product Engineering
In an era marked by inflation, talent shortages, and supply chain complexities, 80% of CEOs recognize the critical importance of digital transformation, as per Gartner. According to IDC, global spending on digital transformation could soar to $3.9 trillion in 2027, boasting a CAGR of 16.1%.
Driven by the pursuit of business success and resilience in an increasingly volatile environment, organizations invest heavily in digital transformation. To ensure the payoff of these IT investments, senior leadership, along with technology heads and teams, must prioritize delivering value to target users and achieving tangible business outcomes. A pivotal question arises: What does it take to create a service, website, app, game, or digital product that not only proves effective today but also remains future-ready?
This blog explores the significance of user-centricity and the resolution of specific challenges for target users in current business scenarios, whether internal issues within the workforce or customer-facing challenges. In either case, an app or service is at risk of failure if it fails to fulfill its original purpose and provide substantial or immediate value to the intended users.
The key to app success lies in delivering value based on a profound understanding of what prospective users genuinely need. This forms the core philosophy of the product mindset in app development, supported by research indicating that organizations embracing a product mindset are more likely to outpace their competitors successfully.
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Why should organizations build a product mindset toward app development?
Organizations with a product mindset have several advantages extending past the opportunity to edge out the competition.
Gartner reveals that 80% of CEOs have digital technology on their agendas, underlining the strategic importance on technological advancements. Historically, organizations tended to classify products as customer-facing and apps as inward-facing. For example, an insurance company might build apps or tools to simplify processes for their workforce, brokers, sellers etc., but not consider these as products that can be offered to the external market.
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The essence of user-centricity
In current business scenarios, the success of an app is contingent upon its ability to serve the original purpose and demonstrate immediate value for users. The underlying philosophy of the product mindset is rooted in the delivery of value through a deep understanding of user needs.
Organizations adopting a product mindset treat projects as products and navigate them with a corresponding management approach. These entities construct their apps on principles, sensitivity, and empathy, prioritizing user needs and expectations. Placing significant emphasis on comprehending customers and prospective users, they prioritize prompt and efficient feedback-driven improvements, continuous validation, adaptability, and resilience in the face of setbacks. This approach is inherently value-driven and isn't confined by the mere completion of tasks.
This improves their likelihood of success overall, as they’re building towards long-term capabilities, engaging better and continuously with users, saving costs, and getting to market faster than others. Unsurprisingly, even CIOs are switching from project-based IT service delivery to a product development approach focused on value-based business outcomes.
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What is a product mindset?
Like product-centric development, traditional project management sets out to solve a specific problem. There is a predefined project plan to focus on and achieve milestones. Projects are typically limited-duration engagements controlled by fixed budgets and timelines by the end of which stakeholders expect a defined outcome. Although iterations are involved, the project team doesn’t continuously build on the existing version. As Gartner points out here, project-driven IT delivery does not always consider an organization-wide strategy and roadmap.
As illustrated in the table, several reasons make the product mindset more expansive and far-sighted in scope when compared to a legacy project management mindset. Given the economic uncertainty, profitability challenges, frequent supply chain disruptions, labor shortfalls etc we face, the product-centric approach lends greater flexibility, agility, and innovation capabilities to cope with these modern-day challenges.
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What does it take to build the product mindset?
The Economist Intelligence Unit in 2019 found that organizational culture and individual mindsets posed a major roadblock to effective technology adoption across the enterprise, especially in older organizations.
For it to be truly effective, the organizational culture must be geared towards fostering the product mindset. Often, this starts from the top and proliferates across the organization. As McKinsey research suggests (refer to chart), those who lead with a growth strategy share certain mindsets and characteristics that can be linked back to the guiding principles of product-centric development.
Source: McKinsey
Across industry segments, start-ups and established brands are gearing themselves for application/software development challenges by switching to a product mindset.
An iconic brand like Levi Strauss & Co. had to let go of century-old habits and instill more alignment, collaborative practices across the executive leadership, and cultural agility everywhere in the organization. For instance, for their Ship-from-Store offering, they switched from a perfectionist culture to a fail-fast culture that approaches perfection as evolutionary and leaves room for continuous improvement.
The American healthcare company CVS Health, which set off on a tech-led transformation path in healthcare, developed a more practical definition of ‘product’ to align more closely with customer needs and business outcomes. They’ve transitioned from short-term to long-term planning and function-centric teams to cross-functional teams where every member has a stake in the final outcome. While the transition has not been easy, they have implemented an Objectives and Key Results (OKR) framework, which defines goals, timelines, and success metrics at each stage to level the path. We use OKRs to define what we are aiming for, by when, and how we measure success, step by step.
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Cultivating a tolerant and forward-looking culture
As these transitions are underway, it’s also important that the workforce is on board with the new mindset and what it entails. They can be prepared to transition from traditional project management through training and awareness-building sessions and gain hands-on experience with support from various communities of practice.
A product mindset uses failure as a steppingstone. Such organizations have a high tolerance for setbacks they might experience during experimentation and product development. They continue to learn and adapt from each event, whether affirmative or adverse. Like Steve Jobs at Apple, leaders of these organizations have the far-sightedness to steer others from the realm of ‘what an app/product is’ to the realm of ‘what it could be.’
In today’s highly demanding world, making this approach switch can prove crucial in improving the odds for both individuals and organizations as they set themselves up for success and sustained growth.
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Resources
https://www.ust.com/en/ust-product-engineering
https://www.ust.com/en/ust-product-engineering/softwareproductengineering
https://www.ust.com/en/insights/pursue-digitalization-while-accelerating-time-to-value