There used to be a clear line between the IT department and other business units – and a clear line between application development and IT operations teams.  Innovative, cloud-based digital technology has changed that:

• Tech-savvy business leaders are taking the driving seat.
• Innovation rates and market demand leave little time to plan, build and run technology solutions, forcing IT groups to integrate their build and run cycles.
• Success depends on fast, multi-functional teams, including resources from every part of the organization.

Many IT groups are experiencing turbulence as groups who have been used to managing IT operations as services, work side by side with groups who have been used to developing applications as products.  The good news is that, unlike weather, business and IT leaders can determine the outcome.

So which approach should these organizations favor?  A product management approach, such as LEAN, Agile, or 6 Sigma; or a service management approach such as those outlined in ITIL or ETOM?

Here are some principles to help guide that decision:

Principle 1:  The purpose is business management, not technology management

Digital strategies are those strategies where an organization depends on digital technology to manage all or part of their business.

IT is moving away from being a service provider that takes orders from the business.  “IT” is a set of specialized skills which are used together with other skills to enable the organization to meet its objectives.  Whatever approach is used must be based on the business practices of the organization, augmented by technology management specializations.

These do not exist off the shelf, but require that each organization develops its own approach to managing business and technology together.

Principle 2:  Do not limit yourself to one external framework

This type of approach requires a hybrid of multiple approaches, refined according to the needs of each organization and the business it is in.

Trying to limit confusion by saying “we’re an Agile shop” or “we follow ITIL” is limiting.  These approaches don’t cover everything.  They were designed within a specific context and for specific reasons.  Most organizations are too diverse to be limited by a single approach.

Principle 2:  You will need to manage both products and services

Products and services are not the same, and they often need to be managed differently, even if they are part of the same overall solution.  Digital technology management approaches must include elements of both product and service management.

Products are best managed using techniques developed in manufacturing environments (like defect management and incremental build and improvement).  Without arguing specific definitions, a product is something that can be built and managed as a tangible entity.  It typically has value even when it is not being used.  Examples of products include applications, end user devices, disaster recovery plans.

Services are best managed using techniques developed in organizations such as financial services, hospitals, and hospitality organizations (like incident management, demand management and workload management).  Demand and supply happen dynamically in real time – you can’t order a service and have it delivered later.  They have no value unless they are being used in real time.

Principle 3:  Techniques must be translated from their original context

It may not seem like, it but the digital technology industry is still in its early days.  Tools and techniques are still evolving.  When using a technique from sources like LEAN or ITIL, it is important to adapt it to the context where it will be used.

For example, value stream mapping was originally developed to reduce waste and time in manufacturing processes, but with adaptation it can be very helpful in quantifying how teams contribute to value in both products and services – mapped to how the customer perceives value.

Principle 4:  Avoid using tools that force you to work in a specific approach

The market is filled with tools based on one or another popular approach, with the promise that it is designed for managing digital technology.  This promise is true if digital technology only uses a single approach – often a reworked version of a decades-old methodology.

Don’t use a tool that forces you to use service management workflows to manage products.  Or one that forces you to use agile approaches to manage service outages.

Principle 5: Don’t over-assert emerging practices

There is a tendency to give undue weight to emerging practices.  A frequent practice is to make a new technique the center of all initiatives, even giving it senior governance authority.  This has the short term impact of raising awareness, but the long term effect of losing valuable proven practices and stifling innovation.

For example, soon after design thinking was introduced, some organizations appointed a Chief Design Thinking Officer, and forced all product development through the Office of Design Thinking.

The best way to use emerging practices is to introduce them to the appropriate place in the existing framework, and only discard proven practices if they are no longer relevant.

Conclusion

The best approach to managing digital technology has yet to be completely defined.  But what we know is:

• It must be based on the way the organization conducts business
• Established approaches of product and service management will both be needed, but in a new hybrid way of working
• Everyone will need to give up some old ways of doing things and learn new ways of doing things
• All frameworks have some strengths and weaknesses. Trust framework champions who can guide the organization on how to use the areas they know.  Do not trust framework bigots who want the organization to implement a framework because it is “the best” or because other frameworks “are failures”
• Choose approaches that encourage adaptation and agility, but do not sacrifice good governance