Over the last 15 years, I’ve come across many IT organisations that are structured to operate as a set of silos aligned to business divisions. Each silo often has a high degree of autonomy, is organised differently and has unique methodologies, global ways of working and customer interaction models.
I’ve seen these organisations struggle with the same problem: limited visibility of common technology requirements between teams. And this leads to a rise in the number of solutions that do the same thing. Teams tend to design their own development patterns and templates instead of following or creating reusable best practices for the whole organisation.
Introducing Agile operating methods and self-organising teams will certainly deliver the expected benefits of faster delivery, fewer defects and lower costs. But it may also increase the speed at which solutions multiply and diverge.
So how can organisations address these challenges while getting the most value out of moving to a common, Scaled Agile way of working? I’ve found the answer lies in implementing a consistent and global product or service operating model, which consists of the following:
Creating standing, Agile delivery teams
Organisations such as Spotify, Netflix and Amazon already do this well, perhaps because they've always been set up this way. More broadly, we’re seeing larger organisations with older, legacy structures now move to this model, particularly when it comes to developing and delivering front-line customer products and services – which brings me to my next point.
Aligning delivery teams to IT products, and products to business capabilities
These standing teams must be aligned to activities that deliver value to the business. I’ve found that alignment to the usual organisational structure, such as HR, operations or marketing, doesn’t help teams to focus on delivering value. Instead, teams should be aligned to the business capabilities that generate value for the organisation – for example, those that help to win market share or improve customer experience. And by business capability, I mean the overarching idea that brings together all the activities that allow an organisation to create value. Take an order fulfillment business capability for a retailer. This will focus on everything required to fulfill a customer order end-to-end – irrespective of the type of product a customer purchased or how and where they placed the order from.
These business capabilities are in turn supported by products that include everything needed to deliver the end-to-end service to the business capability. This includes people, technical product components (eg applications, infrastructure and data) as well as service components (eg processes, governance and service levels).
By aligning products to the business capabilities, instead of projects to business divisions, we can prevent duplication of effort, encourage collaboration across business divisions and enable IT to address the doubling-up of solutions that already exist.
Supporting delivery teams with shared technical services and communities of practice
Practices and communities are essential. They support the development of individuals within these teams and promote the adoption of best practices and common standards. Global shared services can help product teams leverage platforms and services in the most efficient manner while ensuring a stable and risk controlled operating environment. The members of the communities encourage each other to share and adopt good practices and collaborate across departmental, national and regional borders.
So if you’re in the middle of your own transformation journey, or about to embark on one, think about how you design your Agile teams. Are you just converting existing project teams to be Agile and hoping to scale up or are you thinking of longer-term standing product teams aligned to business capabilities?