Most Companies Unable to Achieve Project-to-Product Transformation

Many companies are unable to complete transformational work due to immature operating models and management systems, according to the 2023 Project to Product State of the Industry Report from Planview.

The report found that only 8% of organizations have successfully operationalized their project to product transformation. The low success rate contradicts the previously optimistic outlook from a 2018 report claiming that 85% of executives said they had either adopted or had plans to adopt a product-centric model, motivated by a desire to improve speed to market and agility and to support the move to digital business. Five years later, the report's data underscores the complexity of this multi-year process and its required buy-in and commitment across all levels of the organization.

"In boardrooms across the globe, executives are being mandated to prioritize technology investments that ensure their companies transform and emerge from the current downturn stronger. While some enterprise initiatives are managed as projects, a product-based operating model holds the key to increased efficiency, better customer outcomes, and profitable growth for digital portfolios," said Dr. Mik Kersten, CTO, Planview and author of Project to Product: How to Survive and Thrive in the Age of Digital Disruption with the Flow Framework. "The consequences of slow delivery and technical debt can be seen in very public profit losses and system-wide malfunctions. While there are no shortcuts, there is a roadmap of best practices that accelerates the transition, which the report outlines."

The report reveals that five years into the shift from project to product:

■ 92% of businesses do not have the foundation for a product-oriented model, causing their digital transformation efforts to fail.

■ Business leaders believe their IT and software development teams, in charge of transformation efforts, can deliver 10x more than their actual capacity, leading to team burnout.

■ 40% of digital innovation work from IT and engineering teams are wasted due to shifting priorities at the C-level.

■ Only 8% of what's planned by IT and software development teams gets delivered, inefficiency that can no longer be ignored given today's cost and performance pressures.

Given the criticality of this shift for the future success of traditional companies versus early adopters, the report outlines the critical steps needed to accelerate this transition: a partnership between executives and senior product and development leadership to do the following:

1. Benchmark their progress versus their competitors.

2. Understand and implement best practices to shorten the time it takes to capture the ROI of transformation efforts.

3. Identify the organizational attributes that increase the likelihood of operationalizing the product model by learning which efforts to prioritize.

Methodology: The report combines survey data from 326 respondents with systems data from 3,600+ software development value streams in 34 of the world's leading enterprises

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Most Companies Unable to Achieve Project-to-Product Transformation

Many companies are unable to complete transformational work due to immature operating models and management systems, according to the 2023 Project to Product State of the Industry Report from Planview.

The report found that only 8% of organizations have successfully operationalized their project to product transformation. The low success rate contradicts the previously optimistic outlook from a 2018 report claiming that 85% of executives said they had either adopted or had plans to adopt a product-centric model, motivated by a desire to improve speed to market and agility and to support the move to digital business. Five years later, the report's data underscores the complexity of this multi-year process and its required buy-in and commitment across all levels of the organization.

"In boardrooms across the globe, executives are being mandated to prioritize technology investments that ensure their companies transform and emerge from the current downturn stronger. While some enterprise initiatives are managed as projects, a product-based operating model holds the key to increased efficiency, better customer outcomes, and profitable growth for digital portfolios," said Dr. Mik Kersten, CTO, Planview and author of Project to Product: How to Survive and Thrive in the Age of Digital Disruption with the Flow Framework. "The consequences of slow delivery and technical debt can be seen in very public profit losses and system-wide malfunctions. While there are no shortcuts, there is a roadmap of best practices that accelerates the transition, which the report outlines."

The report reveals that five years into the shift from project to product:

■ 92% of businesses do not have the foundation for a product-oriented model, causing their digital transformation efforts to fail.

■ Business leaders believe their IT and software development teams, in charge of transformation efforts, can deliver 10x more than their actual capacity, leading to team burnout.

■ 40% of digital innovation work from IT and engineering teams are wasted due to shifting priorities at the C-level.

■ Only 8% of what's planned by IT and software development teams gets delivered, inefficiency that can no longer be ignored given today's cost and performance pressures.

Given the criticality of this shift for the future success of traditional companies versus early adopters, the report outlines the critical steps needed to accelerate this transition: a partnership between executives and senior product and development leadership to do the following:

1. Benchmark their progress versus their competitors.

2. Understand and implement best practices to shorten the time it takes to capture the ROI of transformation efforts.

3. Identify the organizational attributes that increase the likelihood of operationalizing the product model by learning which efforts to prioritize.

Methodology: The report combines survey data from 326 respondents with systems data from 3,600+ software development value streams in 34 of the world's leading enterprises

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