The Simple Formula to IT Modernization

Having instigated and led through the digital transformation of, and then moving to Target where we have been completely modernizing IT across the entire company, I’ve learned the simple formula to IT success.  While the formula is simple, the execution is what is inherently difficult.

In my first year at Best Buy, I spent months pitching how we would rebuild and move it to the cloud back in 2010 and 2011.  At the time, this was a radical idea as clouds were new and unstable, and were considered highly insecure by corporate IT leaders.  The pitch was centered on the standard IT formula of People, Process and Technology.  This formula is good, but it also has a big miss, there is no emphasis on outcomes.  The pitch worked and I was granted $13M to start the rebuild of, a project that took four years and well over $100M to complete.

While we continued to use the People, Process and Technology formula in our decks and communication to leadership, I managed my team of 200+ engineers to outcomes.  We had to deliver a flexible, maintainable, layered cloud ecommerce platform that scaled infinitely or we were failures.  We implemented Product Management and Agile and morphed into a Product Engineering team that brought into the modern world and did our part in the overall turnaround of the company.

For more on that see my 22 part series on the Digital Transformation of

The People, Process, Technology formula was great for selling to VPs and EVPs, but the dissonance between the sales pitch and the implementation kept me wondering about a better way.  Then I moved to Target which helped me understand that I had found a better way, I just didn’t have the name for it yet.

At Target, our CIO is the most architecture centric CIO that’s ever existed.  Most CIOs pay lip service to architecture, but then hand it off to an Enterprise Architecture team and say “go implement architecture.”  But when the architects try, they are constantly overruled or ignored because all good architecture decisions require tradeoffs in feature delivery in the short term.  Without an overarching vision, no business or IT leaders will make feature tradeoffs.

With little support or understanding from the CIO, the various IT VPs are free to flout architecture rules or governance, and therefore go off and implement their locally optimized solutions.  This is the core cause of IT inconsistency and sprawl, and why every SOA ever designed failed at enterprise scale.

At Target, we’ve used a different formula consistently for the last four years:

  • Architecture First
  • Team Second
  • Value Third

How does this compare to People, Process and Technology, let’s analyze it.  

People and Team sound the same but they have different inferences.  People is generic and generally boils down to something about only hiring A players, and B players hire C players because they are insecure.  This assumes you already somehow have a bunch of A players, and that you are an A player too.  This is obviously ridiculous.

Team, however, is about getting people to work together of all types and capabilities.  It’s about maximizing talent by the group coming together and creating something more than its parts.  At Target we’ve strived to create a learning culture where the most granular breakdown of the organization is the team rather than the individual.  Inside the team, there are ranges of capabilities, often based on experience, the environment encourages helping each other through pairing or mobbing, increasing everyone’s capabilities.

Process isn’t even part of the new formula though it is important.  Process actually gets rolled up into Value.  Value is what you are striving for, it’s the outcome of working on features and technology.  But if a feature doesn’t resonate with the customer, no actual value is delivered, although we have learned something that didn’t work.  Value, in the end, is how the customer perceives it, and how you measure it.  Delivery of value uses a process, in Target’s case Product and Agile.  Making Value measurable is the hard part.  Saying you delivered value by adding a new payment type is great, but measuring the impact in incremental sales through an experiment which tests whether a new payment type actually increases sales is better.

Technology and Architecture are often tied together, but the reality is Architecture is technology independent.  Technologies are tools, or, as architects like to say, implementation details.  Architecture is the vision, strategy and principles underlying and overlaying how every system is built and how it fits into the larger picture.  Getting the architecture right gives every engineering team a place to fit their work into how Target’s guests benefit.  Too often, engineering teams have no idea how they fit into the enterprise, so they make choices and build solely to please themselves and their sponsors.  But if the team understands how they benefit the company, they have a higher calling and are willing to make architecture tradeoffs.  

Getting the architecture right allows the company to achieve both known and unknown outcomes.  If we learned anything from the last two months of COVID lockdowns, a good architecture allows you to flex, scale and build new capabilities overnight.  It allows you to withstand an instant 30% channel shift from store customer to online customer.  

Architecture, Team, Value is the simple formula to IT modernization.  Just look at the recent outcomes.