For many IT companies, the classic credo “The customer is king” applies. This often means that these companies are constantly trying to optimize their productivity or the quality of their IT products. However, in addition to fast and good delivery conditions, the nature of the offer should not be disregarded. Because for an IT company to be successful, it is first and foremost about reacting correctly to the customer. This means knowing exactly the needs and requirements of your own target group and responding to them in a targeted manner. In order to achieve this, one thing is needed above all: an efficient IT product organization.

With the proliferation and understanding of Agility as well as the steadily increasing Implementation of agile strategies , many IT companies have already recognized the importance and benefits of an IT product organization. But also for those companies that are just about to introduce such an IT product organization or a agile product culture think about it, there are still many benefits. Based on the best practices of other companies, a standard scheme for the optimal implementation of an IT product organization has emerged in recent years.

If you would like to learn more about agile products and agility in companies, then read on the following articles from me:

What does “IT production organization” actually mean?

Well and good the theory you might be thinking now! But what is the term actually all about? Before this article shows ways of a possible integration, I would like to give you an understanding of the value of an IT product organization.

The importance of an IT production organization

Many companies have departments that focus on product management. Often, however, these are only slightly or not at all linked to the IT department. While the latter is kept flexible through the implementation of agile methods such as Scrum and is mainly viewed as a support department, it usually has little influence on the product culture within the organization. Many companies even completely forego the management of a product culture and instead rely on project management for these issues.

As a result, companies often assume that they are customer-oriented, but, realistically, implement this in a much more limited way than possible and necessary for the success of the company. The reasons for such behavior range from top-down objectives to areas such as cost reduction through data-based decisions regarding value creation or market development.

Although many IT companies recognize the profitability of agile methods and allow them to be promoted and expanded within the company’s IT department, the distance between this department and product management often results in a weakening of these measures in the area of IT production organization. Instead, specially employed product managers are given the task of customer management. They try to analyze and derive customer requirements in the form of resource management. As a result, the development of products depends solely on the availability of resources. Accordingly, it is less oriented towards the customer himself.

How is an IT production organization defined?

An optimal IT product organization is primarily based on the wishes of the customers. She focuses on constantly being able to understand what the customer’s requirements are. But also which new products he would like or which he would accept. With the inclusion of these parameters, everything in an IT product organization revolves around the product itself. Aspects such as customer benefit or user experience contribute significantly to the success of the company.

Basically, an IT product organization is divided into two important roles:

  • the Chief Information Officer and
  • the Chief Technical Officer / Vice President Product Development / VP Engineering

The Chief Information Officer acts as the head of the IT organization. The Chief Technical Officer / Vice President Product Development / VP Engineering, on the other hand, is responsible for the actual product development organization.

The IT product organization thus differs significantly from the traditional product organization. The latter typically implements three roles in the areas of product development, product management and design, and marketing.

Build IT product organization

For the optimal and efficient structure of an IT product organization, companies should consider the following steps:

  1. Structure the distribution of tasks

Companies should first of all bring order and structure to the distribution of tasks within the company. This is heavily based on the introduction of new organizational models that are committed to more effective execution of processes with regard to customer requirements.

2. Introduce roles and their descriptions

In the course of this, roles such as Chief Information Officer and Chief Technical Officer / Vice President Product Development / VP Engineering should be introduced and their tasks and duties should be worked out in detail. With this role structure, competencies can be better used and clear delimitations can be implemented.

3. Define areas of responsibility

With regard to the various roles, however, the areas of responsibility should also be precisely determined and defined. If each of your employees knows for which area within the It product organization they are responsible and which authority they have, internal efficiency can be significantly increased.

4th Link the T department with product management and culture

Ultimately, companies must ensure that the wall between the IT department and the product organization is permeable, transparent and communicative, so that an agile product culture based on customer requirements can also arise across departments.

Conclusion

By implementing an IT product organization, a company can generally increase its agility. At the same time, however, it can also respond much more efficiently to customer requirements. Defining roles and their areas of responsibility can also help motivate the workforce. dThis is due to the fact that tasks and objectives are clearly defined.

Even if the implementation of an IT product organization sounds comparatively simple, there are many pitfalls. IT companies should therefore focus on the following areas in particular:

  • Cooperation with the customer: Only those who work with and close to the customer can really understand their wishes, requirements and the benefits derived from a product.
  • The budget for the procurement of information should be spent sensibly in order not to ignore the actual customer requirements and not to draw wrong conclusions.
  • Roles and their tasks cannot be transferred to every employee. Select from your workforce those whose character and competencies match the respective roles and who have an understanding of customer requirements and a desire to solve problems.

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Dr. Dominic Lindner
Author

I blog about the influence of digitalization on our working world. For this purpose, I provide content from science in a practical way and show helpful tips from my everyday professional life. I am an executive in an SME and I wrote my doctoral thesis at the University of Erlangen-Nuremberg at the Chair of IT Management.

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