Six Ways Product Engineering Principles Can Save Your Digital Transformation

Until the early 2000s, software applications and products used to be built the way technology initiatives were executed in the 80s and 90s – one-shot, big-bang. The outcome was unsurprisingly similar. Applications and products were built out completely, sometimes over several years.  Features were packed into the product and launched, only to discover that they were not exactly what users were looking for, or what customers would pay for. 

Big Initiatives, Expensive Learnings

Digital transformations were executed in parallel across processes and lines of business in multi-year programs. In the end, they often failed to deliver the desired business results. Net result: years lost and millions of dollars gone without the expected ROI. 

Some digital transformation programs are still on the same path, but most organizations have learned from their sometimes-gargantuan mistakes.  They’ve started taking a more cautious, more iterative approach successfully practiced by product engineering teams for the last two decades.

The Agile Manifesto Replaces the Big Launch

Software product companies learned, rather quickly, that it is not a great idea to develop the entire bundle of features that Product Management thought the market wanted, and then do a big launch. It was much smarter to first build what is now known as an MVP, or the Minimum Viable Product.  

MVPs offer enough features to attract early-adopter customers and validate a product idea early. Once the organisation was sure it was headed in the right direction, it could then iteratively build more features from the product roadmap and offer additional value to customers with each release, all while tweaking the roadmap itself based on market response. 

The Agile Manifesto – released in 2001 – also validated the learnings of these organizations and helped them better structure their efforts approach with the Agile process. This ensured that every sprint delivered something of value.  Sprint retrospectives helped the product teams incorporate learnings from the previous sprints to make the product better and in turn, more successful. 

The rigor of engineering in small chunks aligned to an overall roadmap has indeed built some of the most successful products and platforms in history, some used by billions of people around the world. 

When Digital Transformation Fails to Transform

According to a recent Gartner survey, 63% of business leaders indicated they don’t really know the true possibilities of next-generation technologies. Not surprisingly, just 13% of respondents said they have identified the next major digital business technology investment for their transformation programs. 

Many large organizations went on a spending spree in the last decade trying to make their businesses go from legacy to digital in one, large transformation push.  The roadmap, which was typically drawn up by a Tier 1 consulting organization, led many into unforeseen pitfalls. 

And many failed, at least to some extent, precisely because of the inherent challenges that a huge transformation across the business brings. 

The common hurdles that these organizations faced included:

1.   Lack of an overall vision of how the business would look like and work when it indeed became “digital”;

2.   Resistance to change, both internally and on the customer and partner side;

3.   Lack of skills to manage such large programs, especially when executed across multiple lines of businesses, geographies, and varied technology stacks;

4.   Rate of change of technology as well as changing customer expectations during the execution of these multi-year transformation programs;

Many organizations shelved their transformation programs mid-way or at some stage, clearly seeing the terrible spectacle of having burnt a lot of money without achieving anything close to what they set out to achieve.

However, the current pandemic has accelerated the push to digital once again, with the force and scale that has most businesses scrambling to get their digital transformation programs restarted, completed or some even embarking on them for the first time.   

Whatever the driver, most businesses now need to become fully digital on the double, without repeating mistakes of the past. Applying the agile principles of software product engineering offers the best way forward.

Where the Rubber Meets Reality

The key to achieving success still remains what it has always been — start small, learn from mistakes, course-correct, repeat — until the overall objectives have been achieved. 

To apply the principles of software product engineering to digital transformation initiatives, organizations need to do the following:

1.    Be adaptable.  While the entire feature list for a product is drawn up at the outset, product teams keep adding and removing features, changing technology components, revising release timelines as and when required, as a practice. For your transformation program, you need to be flexible too. Customer expectations might change (e.g. higher use of mobile instead of PC), technologies might mature or fail to live up to their hype, budgets might increase or decrease based on quarterly or annual performance of the company. 

2.    Focus on business objectives.Going Digital” should not be about adopting the latest technologies but to ensure that your business can operate (preferably completely) online so your services can be accessed anywhere, anytime by your customers. And this needs to drive every decision related to the transformation program. 

3.     Deliver value quickly and regularly. As each step (think sprints in product engineering) of the transformation program is executed, business and customers should see clearly identifiable value. And this needs to happen with the regularity and frequency of software product releases to ensure the overall program is indeed successful when all the sprints are done.

4.    Improve continuously. As the product engineering teams conduct “sprint retrospectives”, your transformation team needs to do a review of each complete stage/step to learn what was done right and what was not. Learnings need to be incorporated for all future stages.

5.    Communicate constantly. The product engineering teams have a Scrum or stand-up call practically every day so that all the stakeholders can meet, discuss on the progress, identify roadblocks and next tasks and resolve issues quickly to keep moving steadily and rapidly. In any transformation initiative business, technology, and management representatives need to constantly communicate to ensure that everyone is aligned on the plans, tasks, issues and success criteria. 

6.    Build small, expert teams.  Software product teams are organized into really small teams of expert resources (variously called squads, tribes, pods, etc.) who add up to a great combination of skills.  These include those from development, operations, project management and quality assurance to ensure that, together, they deliver high-quality software that is innovative, on time, high value and within budget. Digital transformation teams need to also be forged from the best and brightest across the organization — from program management, technology, operations, and customer service, to emulate the success of software products. 

Launching a digital transformation initiative involves a series of critical decisions, none of which are irreversible if you take cues from successful product introductions. Stay agile, keep small teams and a flat organization, make decisions quickly, adjust often and find easy wins to keep up motivation and momentum.  Learn from product engineers and their minimal viable products and you may turn your transformation initiative into a major value driver.