Written by Anant Dhavale
on June 15, 2021

With the advent of Agile Product practices, there has been an ever-increasing focus in the Public sector to move away from heavily projectized structures to a Product-centric approach. Many commercial enterprises have demonstrated that a Product-centric mindset can create more seamless and collaborative enterprises that deliver value faster to their customers. However, transformations take time and require broad cultural and mindset changes to embrace new ways of operating.

For Public sector enterprises a Product transition presents unique challenges. They are often large, heavily regulated, mission driven entities with a wide stakeholder spectrum and techno-functional silos that developed organically over time. A mix of legacy and modern technology typically found in Public sector enterprises adds further complexity to a transformation effort. For a successful Agile Product transformation, it is necessary to understand and navigate this complex landscape. Below, I’ll illustrate key issues and challenges Public sector enterprises face. Part 2 of this series will explore ways to successfully tackle these challenges.


Key issues in adopting the Product model in the Public sector

Hierarchical Structure
A Product approach features wider autonomy with self-governing teams than can operate and react with agility. This can be a challenge within the traditional hierarchical structures prevalent in the public sector. Longer chains of command can bring additional layers of approval required to get things done. Traditional budget controls, often driven by regulatory compliance, can hinder the participative style of budgeting and prioritization required when moving toward a Product-driven structure.

Compliance and Regulatory Policies
Compared to the Commercial sector, Public sector enterprises operate in more complex regulatory environments. Compliance activities are necessary and ever-present considerations that impact most ongoing initiatives. Within this regulatory complexity, an Agile mindset has shown promising potential. According to the Boston Consulting Group, Agile approaches can help cut IT spending by 20% to 30% and help streamline regulatory projects significantly.

Resistance to Change
All enterprises that undertake transformation encounter some degree of resistance. People are comfortable with the status quo and are often skeptical of anything that threatens it. Uncertainty about future roles can be associated with change and result in overly cautious and fearful staff.

Lack of Buy-In Across Levels
While there can be enthusiasm and buzz associated with an Agile Product transformation, lack of concrete research inputs can lead to top Executives not fully trusting the new direction. Similarly, subject matter experts on both the business and IT side can have different perspectives of the transformation vision. Lean Agile practices require an open and generative culture which thrives on greater stakeholder participation and harmony. Without leadership support and stakeholder buy-in at all levels, product teams will be hindered.

Myopic Focus of Transformation Efforts
Enterprises are unique systems and require a holistic approach toward optimization. Optimizing one component does not optimize the entire system. Often, this holistic view is missing, and there is an overt focus on optimizing development functions only. One manifestation of this myopic focus is seen in terms of how progress is measured, with metrics centered entirely around measuring a Scrum team’s performance while neglecting larger issues at hand. There needs to be a broad perspective that includes the enterprise’s lateral functions (such as Legal, contracting, Security, Marketing etc.) so that optimization actions are geared toward the entire system.

Incomplete View of the Problem Space
The user base for a Public sector enterprise can be large and multi-layered and include both internal and external entities as well as lateral constituents. Key issues around the Product Vision and strategy, feedback channels from user communities, or alignment between enterprise capabilities, business processes and the product backlog can be overlooked. This leads to a poorly defined Problem Space, which can set back transformation efforts.


From an ecosystem standpoint, the issues faced by Public sector enterprises are not entirely different from those that any large commercial enterprise faces. They are unique, nuanced versions of challenges that most enterprises face and can be successfully remediated with a structured approach and contextual implementation of Lean Agile practices. In Part 2 of this series, we will look at effective strategies to successfully navigate these complexities in Public Sector enterprises.