How can business be rewritten by software? This is the question, but what does it mean?
The trouble with most discussions around technology development is they descend into a dissertation populated by acronyms, but not very often capturing the truly exciting world, both business and personal, where everything is being reshaped by software.
These are the days of the fourth industrial revolution. The first used water and steam power to mechanise production; the second used electric power to create mass production; the third used electronics and IT to automate. The fourth is the digital revolution, which is characterised by a fusion of technologies that is blurring the lines between the physical, digital and biological spheres.
Rewritten by software
Disruption has arrived; it's everywhere. A bank is no longer just a bank, it is a purveyor of data, digital devices, and, of course, also financial services. A taxi company that is not a taxi company is another example: it doesn't own a solitary car, other than the driverless variety deployed in parts of the USA; nor does it employ drivers. It's an app... or is it? Well, actually, it is a business that has been rewritten by software.
Almost all companies today use software-based solutions for traditional systems such as ERP, logistics, etc, and these systems need to be managed. Once again, these have become legacy-type applications that have been around for years. What has changed is that companies worldwide are increasingly using software to drive their businesses forward and provide a competitive edge. They are either building these new capabilities internally or outsourcing this software development. This development is referred to as software factories.
So, the crux of the matter is not to ask: "Why do I need a modern software factory", but rather, to ask: "How can I get my business to build, test and deliver amazing apps that predict problems before they happen? How do I enable continuous delivery, frictionless security and agile across my business, from mobile all the way to mainframe? Most importantly, what is my business's potential to grow and compete if the apps it is delivering to customers do not deliver the service today's consumer, with so many choices, demands?"
A company should be asking itself all of the foregoing, otherwise the answer to the last question will be zero growth and a decline in business, as consumers hop between suppliers and are brutal in their lack of forgiveness for poor experiences; they do not come back.
Disruption has arrived; it's everywhere.
So, now that the message is clear: what does a company do to get into the picture?
Thriving on change
Change and the possibility of it can scare the hell out of many businesses. The company has a model that works, the business turns over nicely and is reflecting reasonable growth in a pretty slow economy. But, that's no longer good enough; all businesses are in a highly competitive race to win business, and even more so in a strained economy. Today, the most competitive firms are built to change, actually to thrive on it and adopt an approach of "be the change you wish to see". These are the companies built on software that allows them to thrive in a climate of constant disruption, short innovation cycles, and ever-changing customer expectations.
Research conducted by CA Technologies, in partnership with Freeform Dynamics, reveals important insights about those businesses that are not just building, but mastering, the modern software factory. Not only do 'masters' demonstrate a staggering 70% higher profit growth and 50% higher revenue growth, they also lead on a host of key business indicators, including:
* Exploitation of new software driven technologies;
* Better leadership decisions due to use of analytics, yielding valuable customer information; and
* Understanding customer needs and better aligning IT with the business.
What it comes down to is the ability to exploit the digital world and all of its opportunities to the hilt!
Of course, a company's next question is: "How do I create a modern software factory?"
Creating a modern software factory is no easy feat as it involves far more than just technology and processes. It demands a highly agile and collaborative working environment, which in turn requires the right people, culture and structure.
The key principles that underpin the modern software factory:
Agility
Delivering exceptional experiences to customers means being able to respond rapidly to their needs. Methodologies such as agile, DevOps and continuous delivery are essential to this capability.
Automation
The software development life cycle must be fully automated. This calls for consistent and standardised ways of working, capturing feedback from users and other stakeholders, and communicating it to developers.
Insights
Developers need processes to monitor, sense and respond effectively, and they need the analytical tools to enable them to receive feedback, improve software and track the impact of the changes they make.
Security
As cyber risks intensify and development becomes more automated, security must be integral to software creation, not just a feature that's bolted on at the end of the development process.
In my next Industry Insight I will present the principles on which the modern software factory is founded, and how to implement them.
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