App development to shift from projects to products

The shift from project-based to product-based application organizations will affect how they are governed, according to Gartner, Inc.

"Rapid evolution is coming for most application organizations," said Matt Hotle, vice president and distinguished analyst at Gartner. "Shifts in how the business will consume applications, and the increasing demand that software delivery must not slowdown the business, are refocusing application organizations. Before, they delivered change by funding projects and were organized primarily around those projects. The coming revolution will shift the delivery metaphor from project to product."

Todays application organizations are taking different paths toward product-based delivery. Some organizations are on a cost reduction or reallocation road; some are attempting to create a platform of common applications; others are reeling under the fast-growing demand for new and changed functions from their business colleagues. Regardless of the path they are following, they all have the same destination: the product-based organization.

"To begin to understand this shift to the product-based application organization, its important to understand what the 'container' organizations deliver," said Hotle. "For most organizations today, that's a project. The project is a collection of business capabilities.

Projects and products share some characteristics, but also have key differentiators. A project is a transient principle around which to organize, while a product is a long-lasting set of capabilities that has a life cycle linked tightly to the business capabilities it provides. Supporting the product life cycle drives substantial changes to funding and delivery methods, organizational structures and the relationship between the business and IT.

In a project world, the focus is on the incremental change to the business. Organizations that have succeeded in moving to an application portfolio approach, talk about an asset having a life that mirrors the business process it supports. In the product world, product life cycle management (PLM) includes the steps that take the product from idea to reality and onward through enhancement to retirement. In the application world, however, there has traditionally been a design phase, a development phase and an ongoing, seemingly endless, operation phase.

"This is the evolution of how we organize and manage the work and people in IT and application organizations. It's a major transition, but not one that has to be made all at once," Hotle said. "Many organizations are already on one of the roads leading to the product-based organization. Others are taking more cautious steps. It requires a shift in interaction patterns within the business, a cultural remap of the applications organization, a shift in the way the organization itself is designed, and a shift in the way people are assigned to work."

Gartner analysts will further discuss the outcomes of programs and portfolios at the Gartner PPM & IT Governance Summit 2012, to be held in London from June 19 to 20.

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