OPERATIONALIZING THE SHIFT FROM PROJECT

TO PRODUCT
Findings from the 2023 State of the Industry Report

Dr. Mik Kersten, Chief Technology Officer

Mara Puisite, VP, Transformation Solutions

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 Meet the Presenters

Mara Puisite Dr. Mik Kersten

VP, Transformation Solutions Chief Technology Officer
Author, Project to Product

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 Why Are We Here?
Executives are being asked to prioritize IT investments that ensure the organization transforms
and will be a strong performer throughout the current economic downturn and beyond.

Most organizations are off-track and at risk of not completing the transformational work
required to meet the strategic objectives, and thus will be unable to achieve desired
improvements in time-to-market, predictability, or delivery efficiency.

Shortcuts or surface-level changes are proving insufficient, and the hyper-focus on engineering
productivity metrics (e.g., Agile, DORA) is a distraction from business impact.

Without a mature product operating model in place, only 30% of software budgets are spent
on innovation and 40% of development efforts deliver no business value.

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 Why Now?

2018 Gartner Study

• 85% of companies had adopted or
said they planned to adopt a product- Project to Product: How
centric operating model. to Survive and Thrive in
the Age of Digital
Disruption with the Flow
2023 McKinsey Survey
Framework
• Organizations capture less than 1/3 of
Dr. Mik Kersten, 2018
the value expected from digital
transformations & initiatives.

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 Survey Demographics
Survey data collected from April–December 2022. Respondents self-assessed their organization’s progress across the seven dimensions described above
and were assigned a score between 0 and 3 for each response. Based on their total scores, respondents were benchmarked into o ne of the five
stages. Anonymized systems data was aggregated from over 3,600 value streams from 34 organizations using the Planview Tasktop Viz ™ product.

Geographies Job Levels Functional Areas

Engineering/IT 50%
North America 53% Manager/Sr Mgr 67%
PMO 13%
UK/Europe 28%
Director Other 11%
14%

APAC 15% Consultant 10%

Executive 10% Product Mgmt 6%

South America 3%
Executive 5%
Consultant 9%
Africa 2% Transformation 4%

(Note: The survey includes multiple responses from a single organization. The respondent’s different perspectives often resul t in different responses and thus stages).
N = 326 individuals from 253 unique companies.

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 A multi-stage process: 5 stages of the shift

1 2 3 4 5

Starting out Experimenting Expanding Operationalizing Approaching Maturity

• Intent to change • Single product or • More products and • All external and • Every product is
• Establish and portfolio piloting portfolios are internally consumed measuring flow and
measure baselines the product model applying the offerings are is accountable for
for core metrics to create a playbook operating under a business results
playbook • Finding solutions product model • Ingrained practice of
to reduce • Fast feedback loops continuous
dependencies improvement

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 Traditional Enterprises Have Not
Operationalized the Product Model
46%
The shift is a multi-year
transformation, requiring a Project 29% Product
sustained effort and a concrete
17%
roadmap
6%
2%
After five years, only 8% have
fully operationalized a product
model

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 Where Are the Challenges?
Definition of Value: Delivery Team Metrics:
52% have no programmatic feedback 50% measure IT’s success with quality
mechanisms in place with customers and cost metrics

Dependency Management:
Team Organization & Resourcing: 87% are impacted by technical, process, and
37% fund all IT assets through annual skill dependencies or are delayed by
projects and "run" budgets handoffs and coordination with shared
services

Customer Centricity:
Feedback Speed:
52% do not apply the principles of
46% cannot incorporate customer feedback
customer-centricity across all
within a quarter
product lines, internal and external

Backlog Management & Prioritization:

41% report that a primary business
stakeholder dictates desired features and
development priorities

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Source: Planview’s 2023 Project to Product State of the Industry Report
 Why Are Transformations Failing?
Insights from 3,600+ value streams

Business leaders believe IT 40% of team efforts are 30-40% of end-to-end delivery
teams can deliver 10X more wasted due to overload and time is spent on software testing
than their actual capacity bottlenecks and release activities

Test & Release

Lead Time

40%

80% of value streams do not 90% of value streams

proactively invest in tech debt measure outputs instead
of impact

80%

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Source: Planview’s 2023 Project to Product State of the Industry Report
 Analysis of survey results and systems data
identified five attributes that increase the
likelihood of operationalizing the shift: WHAT FACTORS INCREASE
THE CHANCES OF SUCCESS?
Team Organization and Resourcing

Dependency Management

Rapid Customer Feedback Loops

Backlog Management and Prioritization

Measuring Flow and Business Outcomes

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 Build-and-Run Teams: Survey Data

Survey Question: How are teams organized and resourced?

Project
All IT assets are funded annually by Despite its importance, only 12% of
37% projects and "run" budgets
respondents report that they use a
continuous, flexible funding model.

Internal platforms and shared services are

operationally funded; external-facing
31% products are delivered by cross-functional
teams
37% of respondents—more than one-
Most of our portfolio, including some third—still use exclusively annual project
internal platforms, is delivered by cross-
20% functional build-and-run teams; funding is
annual or semi-annual
budgets, and another 31% continue to fund
internal platforms and shared services
operationally.
The entire portfolio is organized in
12% continuously funded cross-functional
build-and-run teams

Product

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 Build-and-Run Teams: Systems Data

Business leaders believe IT teams can deliver Only 8% of what's planned by Agile teams
10X more than their actual capacity gets delivered

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 Understand True Delivery Capacity

32 items in work in progress Looking beyond one metric, if it

does not seem as much takes us more than 180 days The load is a lot more daunting
and 96 days on average… in context of our delivery

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 Visibility into Dependencies: Survey Data

Survey Question: How are dependencies managed?

Project
The execution path involves SLAs with functional
8% areas 87% of respondents are impacted by
technical, process, and skill dependencies
or are delayed by handoffs and
coordination with shared services.
Technical, process, and skill dependencies slow
58% down most deliveries

Some internally consumed capabilities are 5% of respondents have transitioned

29% self-service but others still require handoffs
and coordination
to a full self-service model for
internally consumed capabilities.

All internally consumed capabilities are

5% available as self-service

Product

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 Visibility into Dependencies: Systems Data

Lead Time Test & Release

40%
30-40% of end-to-end delivery time is spent on Completed code commonly idles for 3+
software testing and release activities months before it's released

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 One Team Bottleneck vs. Systemic Bottleneck

Systemic view of team

of teams

Across teams, work

gets stuck in release
processes

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 Incorporating Customer Feedback: Survey Data

Survey Question: How rapidly can customer feedback revise planning?

Project

16% An enterprise schedule provides highly

governed release windows a few times a year
30% In case of emergency, applications can
release independently to production
30% of organizations opt to release
quickly but only in cases of emergency,
like bugs or outages. This suggests their
limitations are not technical, but rather
governance- or process-driven.

Some applications have an independent path Over half—54%—indicate that some or

44% to production and are able to incorporate
all products have an independent path to
customer feedback within a quarter
production along with a faster feedback
cycle, with 10% incorporating customer
All products have an automated, an feedback within weeks.
10% independent path to production and are able to
incorporate customer feedback within weeks
Product

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 Incorporating Customer Feedback: Systems Data

40%

Untenable workloads Constant reprioritization

55% of value streams have twice as When new work arrives, in-flight work is
much work as they can handle put on hold to the point of diminishing
returns, resulting in 40% wasted efforts

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 Cost of Unshipped Code

About a quarter of our feature work has been

sitting in progress for 121 to ~900 days!!!!
Imagine all the value realization you’ve missed
out on

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 Backlog Management and Prioritization: Survey Data

Survey Question: How are backlogs managed and prioritized?

A project mentality prevails in nearly one

Project
quarter of organizations with decisions
23% Programs, projects, and Gantt
charts drive the backlog
driven by project plans and time-bound
schedules.

A primary business stakeholder dictates

41% desired features, and portfolio managers
commit teams to the work
Most respondents—41%—report that a
primary business stakeholder still dictates
desired features and development priorities.
Product managers create execution plans to
21% deliver desired capabilities on an annual
planning cycle

36% of respondents testify to a stronger

Product managers are the long-term role for product managers, a positive sign.
15% custodians of product vision, roadmap
and viability

Product

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 Backlog Management and Prioritization: Systems Data

80% of value streams do not proactively 90% of value streams do not proactively allocate
allocate capacity to technical debt capacity to security and compliance work

80% 90%

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 Invest With Intent

Investment should match

the product lifecycle
stage and your strategic
goals

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 Measuring Flow and Business Outcomes: Survey Data

Survey Question: How are delivery teams measured?

Project 51% of respondents still measure IT's

success with quality and cost metrics,
51% Primarily with quality and cost metrics
which are considered too one-
dimensional for a product model.

Despite their popularity, Agile, DORA and

29% Agile, DORA and Engineering metrics
Flow Metrics are measured in addition to
12% Agile, DORA, and Engineering metrics
8% Flow Metrics and business outcomes are
incorporated in operational reviews at all levels
Engineering metrics on their own do not
increase the likelihood of operationalizing
the shift.
Since Flow Metrics were only introduced
in 2018 in Project to Product, it is
encouraging that 20% of respondents
report using these metrics.

Product

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 Measuring Flow and Business Outcomes: Systems Data

Less than 10% of value streams regularly review Flow Metrics in the context of business results.
This gap between strategy and execution is emblematic of the gulf that separates business from
IT in organizations that are in the early stages of their transition to a product model.

10x

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 A Toolkit for the Project to Product Shift

Stay aligned to your

strategic objectives

Start aligning planning

with delivery

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 Assess your progress

Identify the bottlenecks

Learn how to measure FIVE RECOMMENDATIONS

Build a practical roadmap

Develop a business case

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Project to Product Maturity Assessment
• Benchmark where your organization is in the
shift from project to product.
• Answer seven questions in under five minutes
to unlock your maturity stage and get
substantive advice on how to advance in the
journey.
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Personalized Assessment + Roadmap
Offering
In this complimentary offering, Planview experts
will work with your leadership team to develop a
practical roadmap to operationalize and sustain a
mature product model.
planview.info/assess-my-org
// 28
 THANK YOU

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