I started my career in a consulting/services firm, moved on to various product firms like CallidusCloud, IBM, Informatica, BEA/Oracle, VMware etc. Then I started a SaaS product firm myself, subsequently, started a consulting / services firm as well.

It took me a long time to understand the differences in product engineering vs IT projects mindsets. Understanding these differences helped me market, sell, hire, train, build teams around these mindset differences accordingly.

I have had a few senior leaders from both kinds of companies ask me how to bridge this gap.

Arguably one side of the fence was, and still is, struggling with the mandate of “innovating for business advantage”. The other side of the fence was, and still is, struggling to bring “unprecedented value” as their buyer is asking them to – so they can gain a “trusted advisor“ status.

Based on my personal observations + experiences, my question to the question above, has been the same.

“Why are you trying to bridge the gap”? In more cases than not, I haven’t received a convincing answer.

My expectation in each case was that senior IT leaders would understand that their need to bridge the gap is really stemming from the fact that they need to innovate and they need to innovate faster.

My expectation was that, more fundamentally, they would know why they need to innovate better, cheaper, faster.

The need to survive.

Over the last few years, the fundamentals of doing business have started shifting. The consumerization of almost everything has been happening for the past few years and the demographics of a large chunk of their addressable market has changed.

Leaders in the traditional businesses in various industries are certainly feeling the pressure of consumerization. Their customer base is changing, along with their customers’ expectations of how they want to experience each brand.

Most organizations are simply not even prepared to make this fundamental shift.

Today’s customer is always ON, always connected and leaves digital footprints everywhere. They want to access your services anytime, anywhere and in their own terms. They want to feel that they can tweet/email/chat/call customer support anytime, anywhere and they’ll get a response. They don’t want to wait for 3 seconds for your web page or app screen to load. They don’t want to place and order and not be getting push notifications on where exactly it is.

Customer loyalty is declining and a vast majority would switch brands at the drop of a hat.

How each organization is choosing to respond to this (either as an opportunity or a threat), however, is up for grabs (my findings).

So how does product engineering fundamentally differ from IT projects engineering?

One quick way to understand this is to look at the differences between IT “in-house” products vs the consumer products.

“In-house” software operates under a very, very controlled environment (even if you have 100K employees). You can provide user manuals, guides, provide training, force your users to use the software etc.. and can control the environment (and the times) that it is being used.

Consumer software / customer facing software doesn’t have that luxury.

Even with consumer facing software that these organizations produce – it still is an interface to the fundamental service that the organization is providing.. So, even if the software is not the best, consumers still do use it (yes, attrition happens because of bad experience with that as well).

As an example – I don’t buy software from a bank. I use their banking interface to access my money. Sure, if it is crappy, I will switch banks but I am not fundamentally buying the banking software that my bank created.

Never would this banking software be in a situation where millions of users are using it everyday.

The scale is different, the resiliency requirements are different, the user experience expectations are different (you must have noticed vast changes in your own bank’s user interface lately).

Traditionally, an in-house IT mindset worked just fine, until consumerization threatened everyone’s existence.

But with majority of such talent being used to creating software for pre-consumerization, captive customer base.. Will they be able to make this fundamental shift to creating consumer software?

Do they actually need to?

These companies are not in the business of software. They are not in the business of selling software to consumers. They solve a non-software related consumer need and the software they create, augments that need.

Think about it – you probably use banking software. But what’s it that you went to the bank for?

To handle your money.

Traditionally, you didn’t go to the bank to get a mobile app that keeps and moves your money around. You went to the bank to keep your money.. Safe..

However, if banking is banking.. And there’s no real, tangible way to differentiate yourself from another bank from a business function point of view.. How do you compete as a bank?

You can’t run your rates higher than the next guy.

So, what do you compete with?

Sure, you can choose to answer with “customer service”, “customer relationship management”, “ease of access”.. etc

But, what’s underlying all of these? Software?

Of course, every competitor of yours can also provide the same “customer service”, “customer relationship management”, “ease of access” via software.

So, what’s next?

Innovation. … business model innovation, customer service innovation, customer access innovation.. Whatever your choice be, for that competitive edge and to stay relevant.

Without innovation, no matter the value you create for your customers, new customer acquisition and current customer retention is going to be a challenge.

But, how do you innovate in a traditionally, IT minded organization? Is that even possible? More importantly, is that even feasible when business continuity still overrules innovation?

Can a traditional, IT project mindset really produce business model innovation, customer service innovation, customer access innovation?

What are your thoughts?