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“Since we are funding things at a product perspective, reviewing things from a product perspective, we can increase speed to market.”
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“Since we are funding things at a product perspective, reviewing things from a product perspective, we can increase speed to market.”
Modernizing processes and accelerating Agile delivery are key drivers for businesses to continuously deliver value and remain competitive within the market. For Lowe’s, these factors became instrumental in their journey of achieving faster speed to market, stronger strategic alignment, and increased team productivity.
Lowe’s Companies is one of the largest home improvement retailers in the world. Founded in 1921, Lowe’s has grown from a single store in North Wilkesboro, North Carolina, into an international enterprise with over 300,000 associates committed to helping homeowners, renters, and professionals improve their homes and businesses.
Staying on top in a competitive industry requires focus and agility. In 2017, the IT leadership team at Lowe’s recognized changes were needed within the technology organization for the company to accelerate value creation and drive sustainable growth.
This led the organization to pursue a technology transformation with bold goals. The IT leaders wanted to gain full control over everything that impacts the customer experience, including architecture, development, and performance. They desired to get early feedback from the business and make real-time decisions, focusing on incremental, modular delivery. Leaders sought to change the way the organization managed delivery by moving away from measuring output and activity to moving toward measuring tangible value delivered.
“We wanted to own the experiences that matter, get faster at delivering value, and operate with a value-driven focus,” said Kelley Wendelborn, senior manager of Technology Business Management at Lowe’s.
To accomplish these objectives meant the organization needed to embrace Agile across the organization. At the time, however, only a few engineering and delivery teams were following Agile methods.
“Back then, it was a grassroots effort,” said Anita Selman, senior manager of Technology Business Management at Lowe’s. “But we were starting to look at product management and how our operational processes needed to change to support a product model as well as Agile delivery.”
According to Selman, the biggest catalyst for change was shifting how the company funded the tech organization. Historically, Lowe’s operated using a cost-center approach to manage technology spending. But this created a siloed view of costs with no connection to business value.
“It was very hierarchical and focused on the ownership of departments or the ownership of pools of spend,” said Chris Ross, manager of technology finance at Lowe’s. “We really needed to understand the products we were investing in and the value those products delivered to the business.”
As Lowe’s pressed forward with its transformation, the leaders recognized the importance of proper tooling. They needed better visibility into the company’s technology spend and an application that would enable them to manage the work of teams and align spending with strategic initiatives. To satisfy this need, Lowe’s turned to Apptio.
The organization implemented ApptioOne and Apptio Targetprocess. ApptioOne helped Lowe’s better understand its IT spend by combining financial and operational data into a unified cost model using an industry-standard taxonomy of cost categorization. Apptio Targetprocess enabled Lowe’s to dynamically manage work, resources, and portfolios and keep them aligned with the company’s strategy.
“We are highly leveraging ApptioOne to integrate a lot of information around our infrastructure, service desk, application development, and more and pulling that over into Apptio Targetprocess,” said Wendelborn.
A major capability of Enterprise Agile is that it helps organizations shift from a project focus to product thinking. The combination of ApptioOne and Apptio Targetprocess has been a strong enabler for Lowe’s in its move to a product approach by increasing collaboration between finance and IT, simplifying the forecasting process, and providing holistic views of costs with connection to business value.
“We definitely don’t want a tool to drive our processes, but our previous tool prior to Apptio Targetprocess was very project heavy and project oriented,” said Wendelborn. “But with Apptio Targetprocess, it’s team oriented. Even though we had shifted to products and teams, still having that old tool kept a little bit of an older mindset for a lot of people. Shifting to teams — and teams allocated to products — has helped in our journey.”
One of the most significant benefits to come out of this transformation has been Lowe’s ability to adjust quickly and deliver new capability based on changes in the marketplace. Unlike project-based funding, which can limit flexibility, product-based funding is more dynamic.
“Since we are funding things at a product perspective, reviewing things from a product perspective, we can increase speed to market,” said Ross. “For example, when COVID came around, we had to shift to a buy online, pick up in store model. Since we were funding stable teams and products, instead of being locked in by a project funding approach, it was easy for us to be dynamic, switch our priorities, and go that way.”
According to Ross, the importance of productivity to Lowe’s cannot be understated. “Increasing productivity is massive,” he said. And the company uses Apptio Targetprocess in a number of ways to help the teams maximize it.
“Our technology teams capture time in Apptio Targetprocess,” Ross said. “We are then able to identify the task, the time spent on that task, and then aggregate the time and turn it into a capital value. And then we can work with our technology partners to identify what work has been completed.”
Ross added, “We have been able to optimize the alignment of our workforce by making sure they are working on the right products and simplifying how they enter time. That’s really increased their productivity. Making things easier for our developers, for our technology partners, really drives productivity.”
Targetprocess has helped reduce administrative tasks, enabling teams to maximize their time on work that is meaningful to the company, and that has been a tremendous benefit to Lowe’s. As Ross put it, “Letting tech do tech is a big benefit.”
With the shift to a product approach supported by Apptio applications, Lowe’s has been able to increase cost visibility, alignment of work with strategic initiatives, and granular insight into tech spending. And this has enabled them to eliminate some legacy applications, contributing to margin improvement for the company.
“Looking at things through a product lens has enabled us to rationalize applications and reduce our legacy application pool by 10%,” said Ross.
The process of becoming more agile continues at Lowe’s with Apptio Targetprocess. While the company has made tremendous progress in transforming its technology organization, the marketplace is continuously changing, and the company’s leaders are focused on ways to deliver more value to its customers every day.
Today, Apptio continues to help Lowe’s pursue its goal of increasing value creation by supporting resource management, time management, and product operations as well as delivering cost transparency across the technology organization.
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