Digital Product Enablement

To best meet the needs of financial institutions' digital strategy, IT organizations must expand their operating model to include capabilities that enable the ideation, creation, launching and scaling of digital product. This expansion of the operating model enables IT to be partners in the execution of digital strategy.

We have boiled down to the simplest terms exactly what that means and how Chief Digital Officers can define whether the right direction and leadership are in place for IT to create a digital execution engine and evolve its operating model for DevOps/Cloud/Agile product development.

Score: 100-80

Section Scoring

100 - 80 PTS

The IT organization has expanded their IT operating model capabilities enabling an effective digital execution engine made of agile, product development, DevOps, cloud, and cross-functional teams. This execution engine engages and forms partnerships with digital business leaders and ultimately effectively executes digital strategy.

An easy test of maturity in IT’s operating model is the presence of business and technical product owners who together own translating strategy and business targets to execution and their ability to iterate product investments without losing time on multiple approvals.

Digital Execution Ready

100 - 80 PTS

Your IT organization has begun shifting from a service operating model with requirements gathering, investment decisions and approvals, and turnaround SLAs to a product incubation, deployment, and continuous iteration model. Some gaps may include:

Individual product owners exist, but there is no dedicated product organization or center of excellence to ensure consistency at scale. Product governance processes are emerging.
Business leaders are not fully adopting digital or may be skeptical about IT abilities to deliver and, therefore, still outsource builds.

Digital in Process

80-60 PTS

IT’s portfolio is heavily based on keeping the lights on/fixing technical debt. Product management workflows and the product owner role is not established. IT is using legacy service mentality and workflows. Delivery fails to achieve digital relevance, much less speed. Digital transformation of IT’s operating model is scattered and absorbed as part of pre-existing structures and governance mechanisms that resists changes needed.

Digital Gaps

60-0 PTS

Questions & Answers

The question-and-answer section outlines why the questions are important, how they are weighted, and what best practice looks like.

Choose the answer that best describes how your digital execution engine approaches digital product enabling and work management:

Why we ask this:

Many of our clients retrofit existing funding and project management processes for digital product delivery. Processes built to deliver a requirement based on a project timeline and budget are not conducive to digital delivery. Most IT organizations struggle to build new workflows to support product lifecycle management over service project delivery.

How we weighed this question:

Your transition to a product over a project/services approach to managing work indicates how willing or effective your digital execution transition is.

What best looks like:

Product owners use lifecycle management workflows from incubation, bringing products to market, scaling and then sunsetting. Digital funding decisions and prioritized development focus are visible and accessible on demand. Ticket or requirements gathering are not the mechanisms that drive delivery teams’ work. Update meetings and presentations are unnecessary for anyone to know the decisions, priority focus, and in-process features.

Next Steps:

Have your peers take the Digital Readiness Work. Use the results to open discussions on a short list to move to a more value-based/digital product lifecycle management process.
If you lack the internal transformational experience or transformation is stuck in politics, bring in partners who have specific experience in building out DevOps/Cloud/Agile digital execution engines for financial institutions.

Which best describes how IT is building your digital execution engine?

Why we ask this:

Transformation specifically needs to focus on extending the IT operating model and building out digital capabilities in DevOps/Agile/Cloud. Historical reliance on internal leaders from PMO might miss the mark. Continued emphasis, as evidenced by IT portfolio and how much spending is going to digital, also shows whether a needed transformation is happening.

How we weighed this question:

While IT PMO leaders might be effective partners in tracking project progress, they may not have the right mindset or experience to design and drive evolution to a digital, product-based operating model.

What best looks like:

There is a dedicated leader with experience building a digital execution engine (the Agile/Cloud/DevOps triad). A core skill is an ability to influence change. The digital transformation leader should have a view of what digital ready means for the organization and manage the roadmap to building a sustainable engineering execution engine.

Next Steps:

If there is no digital transformation leader, establish an MVP as a starting point for change and the level they need to operate at. The person needs to be able to influence and motivate change across functions they do not directly own.
Consider what investment is necessary to make any internal/legacy leader successful. This may include your sponsorship and bringing in advisors with experience building out DevOps/Cloud/Agile operating models in financial institutions.

Which option best describes how the enterprise has adapted funding models for digital product?

Why we ask this:

Digital is an investment in new capabilities and new technologies. For enterprises starting the digital journey, we would expect to see a shift in funding models from project to product and increased spend on new technologies and foundational capability transformations.

How we weighed this question:

The shift to more on-demand/product-oriented funding models over fiscal year budgeting and project funding is a journey.

What best looks like:

Perpetual product funding allows dedicated teams end-to-end accountability for the full product lifecycle, from introduction to sunset. Teams determine the highest value ways to invest on the business’ behalf. Progress is measured in terms of business outcomes achieved. Funding can be discontinued or reallocated by the business as needs change more on demand.

Next Steps:

Engage with your peers in Finance. The move from project (CapEx) to product (OpEx) may cause ripples. You need to have a strong partnership to work through issues like cost center attribution.

Select the most mature product team(s) to pilot and define the “persistent” funding model with only the most critical checks and balances.

Put in place metrics and targets that allow you to iterate and improve how the persistent model impacts business value.

How are business leaders embracing digital in their strategy?

Why we ask this:

In the digital age, business strategy is technology strategy. As an executive for one of our clients said, “We are not just a bank, we are a technology company now.” Digital strategy extends well beyond migrating to the cloud, automating or focusing primarily on more efficient/low-cost means of delivering core services.

How we weighed this question:

Chief Digital Officers have dual transformation accountability. This may mean pushing traditional business banking executives on how to expand access to markets or consumers with digital channels.

What best looks like:

Business leaders see digital strategy as core to growth and access to new markets, not just to make the back end more efficient. They naturally partner closely or include technology and delivery in strategy development and design. This ensures top-down alignment on the direction and what is possible. Furthermore, the business is a key stakeholder and partner in IT transformation, including prioritizing capability investment.

Next Steps:

Use tools like the Digital Readiness scorecard to discuss with your IT organization peers how they see transformation priorities and what they need to move to a more value-based/digital product orientation.
Do a manager math review of the IT portfolio – use this in discussions to illustrate whether spending is aligned to technical debt/keep the lights on vs. digital product strategy and IT transition.
Have whiteboarding sessions with your peers – ideally, at the executive, operating management, and staff level – to define good enough alignment and engagement. Encourage non-meeting-based mechanisms for collaboration, transparency, and (re)alignment.

Select the option that best describes how aligned IT’s budget is to digital product priorities and transformation initiatives:

Why we ask this:

Question 3 deals with funding models. This question expands on the funding model to look at IT’s portfolio and whether allocations are aligned with digital business strategy.

How we weighed this:

Typically, we see clients underinvest in digital product and enablement relative to their importance and ROI potential. This is easy to see by reviewing IT spend portfolio and allocation.

What best looks like:

IT’s spend is aligned in terms of investment in digital execution foundations (DevOps/Cloud/Agile) and allocation on new technologies and offerings.

Next steps:

Talk with your Finance and IT peer group to define a portfolio approach that is more in line with digital business needs and transformation investments relative to risk/uncertainty over traditional services/cost or efficiency spend.
Enable a lightweight governance model – what would you measure, how often would you track, and where can you reallocate existing spend.

Resources

For more detail, check out BreakFree’s point of view on IT product ownership.

Relevant Blog Posts:

The IT Product Owner: A Make-or-Break Role for Digital Transformation

Why Treating Your Platforms as Product is Crucial for Digital Transformation

Are Your Product Teams Focused or Revolving?

Workbook Sections