For years, enterprise IT has been built around projects. A requirement comes in, a team is formed, money is approved, the system gets delivered, and everyone moves on.
The problem starts after that.
Customers change. Business priorities shift. Technology gets older. Yet the team that built the system may already be working on something else. The enterprise then starts another project to fix what the last project could not keep up with.
That cycle is pushing CIOs toward a different model.
According to McKinseyโs Global Tech Agenda 2026, one out of every ten high performing firms has completely embraced the product and platform model in all their teams compared to four times the percentage in other firms. Almost half of the high performing firms have over half of their teams embracing this model.
The product focused IT operating model is a change in the way that teams operate, products are funded, and IT adds value.
What Is a Product-Centric IT Operating Model?
An example of an alternative IT operational model based on the concept of a product would be to structure technology around products and platforms, rather than project work.
Though it seems like a straightforward change, it brings about major transformations.
As opposed to this, in the case of a project-oriented organizational model, there will be a team formed specifically for that particular project and they work towards achieving a deadline and working within a budget. After completing that project, the people involved in it go on to their next highest priority.
If following a product-based approach, the same team that creates the product goes along for the ride. The product management team includes all these but is not limited to product managers, developers, data scientists, designers and others who have operational knowledge.
The project model asks whether something was delivered on time and within budget. The product model asks a tougher question. Is it actually creating value?
That means success can include adoption, customer experience, reliability, revenue, efficiency or another outcome tied to the product.
The shift is therefore not just from projects to products. It is from temporary delivery to continuous ownership.
The 4 Pillars of a Product-Centric IT Organization
Changing the label on an IT team is easy. Changing how that team operates is the real work.
Persistent Cross-Functional Teams
Product teams have to stick together rather than being formed from common resource pools for every new project.
This team might consist of product management, engineering, design, data and operations. It all depends on the particular product. The crucial point is that the team that understands the issue well will also be able to decide on it.
McKinsey further adds that product and platform models create more cross-functional teams that make decisions in days, not months. In addition, reduced transitions provide a positive impact on the flow of information, return on investments in technology and innovation process.
That is the practical benefit. Less waiting. Fewer people passing work around. More people who understand the full picture.
Value-Stream Alignment
The next step is to connect IT teams to a business or customer journey.
Take a payments product. Its team should know more about the application than the application itself. They should know about your customer, about when and where payments fall down, and about what you need from your payment experience.
This provides the team a motivation to exist over executing some technical work.
Continuous Funding
A product does not stop requiring investment just because a project finishes.
This means annual project funding doesnโt work well for things where the product requires continuous adjustment. A product focus can hold off and look at funding as it evolves and as evidence emerges.
A product that makes money can be funded better. A product that takes too long to get adopted can be challenged.
What is not to abandon discipline in funding. Is to relate funding more directly to results.
Customer-Centricity
Internal IT products have customers too.
Employees using an HR platform, developers using an internal platform and sales teams using a CRM all experience the product as users. Their problems matter.
Once teams start treating those users as customers, the conversation changes. IT has to care about friction, adoption and experience, not just whether the system technically works.
Why CIOs Must Lead the Transition
The case for change is not only about faster software delivery. It is also about lost business value.
IBMโs 2026 IBV research says one in five dollars of AI value is lost to friction between business and IT.
That should concern CIOs.
A business team may see an opportunity while the technology team sees a backlog. Both teams can be doing their jobs while the opportunity sits in the gap between them.
A product-centric IT operating model brings those sides closer. Product teams have clearer ownership and a better view of the business outcome they are expected to deliver.
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There is also a stronger sense of accountability.
In situations where the same team develops and operates a product, it is impossible for the team to pass on any problems to another team once it has gone live. Reliability becomes a task that needs to be accomplished. Customer feedback becomes a task. Technical debt becomes an issue that the team has to deal with.
This is what makes the CIOโs position important. This is not just an Agile implementation. This requires a shift in ownership, funding, decision-making, and measurement.
A 5-Step Blueprint for Adopting the Model
Step 1: Define Your IT Products
Start by working out what IT actually owns.
Customer-facing products are obvious. Internal platforms count too. Developer platforms, data platforms, identity services and employee systems can all be products when they have clear users and ongoing demand.
Each one needs a clear owner, purpose and customer.
Step 2: Rethink Roles and Leadership
A product manager is not supposed to be a project coordinator under a different name.
A product manager must understand customer problem, business priorities and product performance. Technology executives must preserve technology quality and architecture. Business executives must remain engaged with results rather than just providing requirements and leaving.
The roles can stay distinct. The ownership cannot.
Step 3: Implement Agile and DevOps Culturally
Buying tools is the easy part.
The difficult part will be allowing teams the ability to deploy, learn, and adapt without having to go through multiple layers of approvals for everything they do.
Agile and DevOps can help with this, but they canโt deliver this alone. Engineering skills, automation, and a culture that allows for lessons learned from mistakes is required.
Otherwise, you will get an enterprise Agile process on top of your existing project process.
Step 4: Establish New Metrics
On-time delivery and budget still matter. They just cannot be the whole scorecard.
A product can launch on schedule and still fail because customers do not use it.
A February 2026 Google Cloud case study with John Lewis Partnership makes this point well. The company found that platform adoption alone did not show whether the platform was creating value. Its measurement evolved from lead-time measures to DORA metrics and then toward broader technical-health assessment.
The result was tangible. Service creation could be reduced to single-digit hours compared with weeks under the traditional approach.
Thatโs the transition CIOs should focus on. It must be what the product has achieved, and not what the team has done. The measure can therefore differ according to the nature of the product, which could be anything like delight of customers, availability, adoption, lead times or whatever.
Step 5: Support Talent Through the Change
Product teams need different skills and behaviors.
Engineers need to understand more about the product and its users. Product managers need enough technical knowledge to make sensible trade-offs. Business leaders need to stay engaged beyond the requirements stage.
That means training matters. So does change management.
People who have dedicated all their careers to providing services might take some time to adjust to being owners of the product. The management must make sure that the expectations are clear and give the team sufficient time to adjust.
Otherwise, the organization will end up setting up product teams on paper but work like project teams in reality.
Overcoming Resistance and Common Pitfalls
The biggest risk is changing the language without changing the system.
Middle managers may resist because decision-making becomes more distributed. Finance teams may struggle with continuous funding because annual project budgets are easier to plan. Teams may also push back because they now own products after launch instead of handing them over.
Then there is the fake Agile problem.
Microsoft found in its own engineering work that improving individual developer productivity did not automatically improve team productivity. The surrounding processes and handoffs were still getting in the way.
That is the part many transformations miss. New tools do not fix old workflows. New titles do not create ownership. New ceremonies do not create accountability.
If funding, decision rights and incentives stay the same, the organization has changed its vocabulary, not its operating model.
Future-Proofing Enterprise IT
A product-centric IT operating model will not fix an enterprise by itself. It works only when leadership is willing to change how technology decisions are made.
That means giving teams real ownership. It means funding products based on evidence instead of habit. It means measuring business and customer outcomes instead of celebrating delivery activity.
The harder question for CIOs is whether the rest of the organization is ready for that level of accountability.
If business leaders still throw requirements over the wall, if finance still treats every technology investment as a short-term project and if IT still gets measured mainly on delivery, the product model will struggle.
The real transformation starts when leadership changes those conditions. That is when IT can stop behaving like a delivery department and start operating as a business capability.