Gartner: 85% of organizations favor a product-centric application delivery model

Eighty-five percent of organizations have adopted, or plan to adopt, a product-centric application delivery model, according to a survey by Gartner, Inc. (www.gartner.com). Although full adoption is rare, overall, survey respondents use the product-centric model for 40%  of their work in 2018, adds therreseasrch group. Gartner predicts that this figure will reach 80% by 2022.
“The increase in how quickly and broadly organizations are adopting the product-centric application model doesn’t arise randomly. It goes hand-in-hand with the adoption of agile development methodologies and DevOps,” said Bill Swanton, distinguished research vice president at Gartner. “In addition, an increasing number of applications that IT teams develop are used by external parties, such as clients or partners, and require the increased customer focus that characterizes the product-centric model.”
The survey found that over half (54%) of respondents expect to fully adopt the product-centric application model over time, while roughly one-third (32%) plan partial adoption. Managing everything as a product is unlikely to be justified, as some IT activities, such as initial implementation of a large software package, may well be better managed as projects.
“Business leaders are generally unhappy with the speed at which they get application improvements and how they work,” Swanton added. “Given that no IT organization gets anywhere near enough funding to do everything everyone wants when they want it, product-centric approaches allow faster delivery of the most important capabilities needed. They also force the business to prioritize the work, and to reprioritize it as requirements are better understood or the market changes.”
Business leaders are generally unhappy with the speed at which they get application improvements and how they work, he says. Given that no IT organization gets anywhere near enough funding to do everything everyone wants when they want it, product-centric approaches allow faster delivery of the most important capabilities needed. 
“They also force the business to prioritize the work, and to reprioritize it as requirements are better understood or the market changes,” Swanton says.
Thirty-two percent of the survey respondents identified a need to deliver more quickly as their main driver of adoption of a product-centric application approach. They said that speed to market was the main driver of their transformation process.
Digital business came second (31%of respondents). 
When organizations start a digital transformation journey, they often find that traditional project methods are not suitable for the uncertainties of a transformative business model. They discover a need to adopt agile methods and to treat the results as products, since they will be used by external customers.
The shift from a project-centric to a product-centric application approach does not come without challenges, however. Concerns about project-based funding and the culture clash between “the business” and “IT” were the top challenges for 55% of the respondents.
Forty-six percent of the respondents said their organization had already appointed a product manager, while 15% plan to introduce this role by the end of 2018. Ten percent have no plans to introduce this role.
According to the majority of respondents, product managers report, or will report, to the IT organization or project management office. At the same time, respondents said they expect the role of application leader to change. For 43% of respondents the role will reside in the IT organization, while for 32% it will migrate into business teams where the application leader will lead a product line or be a group or single product manager.
“As organizations gain more experience with product-centric delivery models, we expect product and technical leadership to separate from administrative line management. This will have an impact on the prospects of holders of the application leader role, who will need to choose between product management, engineering team management and administrative people management,” Swanton said.
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