The Product vs. IT Mindset

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Topics: Governance, Innovation, Requirements Management, Strategy, ProjectsAtWork

Problems emerge when a company tries to create products for external customers using processes meant for internal technology development. Here’s an explanation of the vast differences between the IT and product organization models, from mindset to metrics.

There are two basic models for technology organizations: the IT organization model and the product organization model.

IT organizations often provide consulting and implementation services to other organizations for the purposes of decreasing costs, increasing employee productivity, and so on. They tend to focus on implementing enterprise resource planning solutions, communication systems (telecommunications, email, and the like), and customer relationship management solutions. Often they work to elicit a set of requirements from internal customers (other employees) to implement packaged or homegrown solutions to meet organizational objectives. IT groups are often viewed as cost centers and are run accordingly. Their primary objectives are to reduce the cost basis of the company by employing technology solutions rather than by expanding headcount to similar activities. In turn, IT organizations may be evaluated based on their costs to the enterprise. This may be done by determining costs as a percentage of revenue, as a percentage of total operating (non-gross margin) costs, or on a cost-per-employee (per capita) basis …

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