The Microsoft ISD team is helping thousands of customers across the globe to accelerate their digital transformation journeys through Product Centric principles and approaches.
An article by: Ankush Rathore & Anurag Vij, Azure Cloud and AI Practice, Microsoft Industry Solutions
Fixed outcomes vs. Business agility?
Consider the age-old methodology of a hospital’s plan to upgrade its patient management system detailing the desired specifications and feature-set, identifying the right partner, and managing the project over multiple years with pre-defined milestones, and a few years down, going live only to realize how much has changed during the course. Compare this with a hospital that aspires to provide meaningful experiences at every stage of a patient’s journey from enrollment to recovery and leads the planning and development of the underlying platform that accommodates for the rapidly changing dynamics ranging from technological evolution to pandemics.
Organizations that adopt the latter approach stand the chance to benefit from being able to adopt to changes and evolving constraints in the surrounding environment, make course corrections with changes in expectations or learning along the way, and overall, realizing faster business outcomes for the benefit of their customers.
The recent rapid acceleration in digital transformation of organizations makes this approach even more important as the digital agendas evolve swiftly. In 2020 alone, Microsoft saw many of its customers achieve 2 years of digital transformation in just 2 months. Organizations around the world have started to change the way they think and respond to customer needs. Projects are no longer multi-year planning, development, testing, and implementation cycles. Rather, each customer need is viewed as a product in itself and is approached with rapid prototyping, parallel dev-test processes, minimal viable product (MVP) testing, followed by production releases. The trend is not just a symptomatic representation of COVID-19 times but has rapidly evolved over the last few years. To note a few studies:
- In an October 2018 Gartner study , it was observed that IT department of Companies have started the transition from Projects to Products.
- In a July 2019 study . Gartner forecasted that by 2024 more than three-quarters of digital business leaders would have benefited from product management practices, up from a third that had already done so in 2018. It was also projected that by 2024, 80% of IT organizations would have undergone radical restructuring and changes to their missions as they embraced product-centric operating models.
- In an April 2020 Gartner survey , 85% of respondents said their organization has adopted or plans to adopt a product-centric model, further confirming the market trends and movements.
From running Projects to delivering Products
The basic premise of a product-centric model is based on five key principles:
a) Outcome Focused: Focus on specific desired outcomes and not a set of certain predefined outputs that may or may not lead to the desired outcome.
b) Continuous Value Realization: Business and customer value must be realized in an ongoing fashion like a flywheel motion versus an approach that pivots on fixed scope, duration, quality, and budget consumption.
c) Adaptive Approach: An approach that’s agile to adopt to changes in the surrounding environment or factors versus one that’s stringent, pre-defined, and prescriptive that does not take market and customer movements into account.
d) Perpetual Development: A development build-and-release approach based on demand cycles versus an artificially prescribed end-date.
e) Value Driven: Investments are based on ongoing value realization and growth versus promises of a future ROI.
This product-centric model has been followed by the largest technology companies throughout the world and almost every product company that operates in the Cloud or offers services in the Cloud.
Microsoft Delivery Approach: Rapid Customer and Business Outcomes
Microsoft has had the longest run of releasing enterprise products in the commercial market and has used the product-centric approach for speed to market and demonstrating agility when faced with changes, aside from earning trust currency and customer satisfaction. With these years of learnings, Microsoft devised the product-centric model into an operational entity i.e., Product Centric Operational Model as demonstrated in Figure 1.
Microsoft’s Industry Solution Delivery (ISD) team is chartered with helping Microsoft’s customers realize their full potential by driving rapid business outcomes in their respective industries. Microsoft ISD leverages this Product Centric Operational Model and helps its customers respond to market movements with its best of breed industry focused talent that operationalizes this knowledge in real-time. It’s worth noting that this shift in approach requires a significant mindset-shift, with these alterations being quite profound, like that of mindset change from a fixed-mindset to a growth-mindset. Given this shift represents a big change in how enterprises view their change management and project charters, measures of success, and resource allocation. Microsoft ISD is working closely with its customers through the Microsoft Delivery Approach, which helps organizations manage four critical areas for success with a product-centric approach:
a) Project centric to Product centric: Assisting the organizations move away from predefined scope with predetermined beginning and end in mind to desired outcomes predicated on business value, speed, continuous learning, and agility to adopt.
b) Recognizing outputs to Recognizing outcomes: Helping organizations to lead with a model that drives results-based value and recognition for outcomes delivered and moves away from activity-based recognition on predetermined outputs.
c) Inside-out to Outside-in: Enabling the organizations to lead with their customers’ perspective and needs versus leading with internal thinking, past experiences, and intuition.
d) Individual based staffing to Team based staffing: Helping the organizations adopt agile models that focus on forming core feature teams offering stable entities, progressive efficiencies, and continuous learning.
Whilst a product-centric mindset is at the heart of the Microsoft Delivery Approach, there are four other key principles that truly bring it to life:
a) Start fast, deploy for use, and iterate quickly: To fail early, learn rapidly and realise instant value.
b) Deliver using cross-functional delivery teams: To develop functional redundancies and manage point of failures.
c) Seek data driven continuous improvement: To generate telemetry for benchmarking delivery and conducting metric-based retrospectives.
d) Secure and quality by design: To generate value with inherent quality and security at each MVP.
A senior executive of a large insurance company, a Microsoft customer, recently shared with us:
“It’s been a painful learning for me and my organization, but I am glad we finally switched out of driving a series of fixed-scope, fixed-fees projects with our technology partners such as Microsoft.
Our teams today are literally working as if we are technology product company and not a traditional internal IT department for an Insurer. Sprints are keeping us honest to the rapid outcomes business expects, we can experiment and fail fast, and most importantly, we are not burning massive holes in our budget before realizing course-corrections are required.
Digital transformation is not so much about technology as it is about driving a wholescale change in how people and processes work in tandem for technology to become a competitive differentiator.
I can clearly see how organizations that adapt such agile methodologies, supported by people and process shifts required, will stand a robust chance to win.”
The Microsoft ISD team is helping thousands of customers across the globe accelerate their digital transformation journeys through the unique Microsoft Delivery principles and approach. And yet, no approach set in stone. We continue to push ourselves to keep our growth mindsets on and learn as we work through our customer’s journeys in their respective industries. Watch this space as we share specific industry scenarios leveraging the Microsoft Delivery Approach for success in future posts.
1. Swanton, B., Hotel M., Wan D. 2018, Gartner: “Survey Analysis: IT Is Moving Quickly From Projects to Products, ID: G00373896, October 23, 2018, refreshed 20 April 2020, <https://www.gartner.com/document/3891887?ref=lib>
2. Wan D. 2019, Gartner: “A Day in the Life of a Digital Product Manager”, ID G00400672, July 31, 2019, <https://www.gartner.com/en/documents/3955809/a-day-in-the-life-of-a-digital-product-manager>