Amid the fast-changing landscape of digital technology, it’s becoming easier for enterprise product teams to scale and adopt modern software practices. Yet, in nearly every industry, large companies are still being disrupted by fleet-footed, digitally-focused businesses.
Think about how Airbnb caught the hotel industry off-guard a decade ago. The internet, combined with widespread mobile access, helped launch a formidable competitor, observed Clayton Christiansen, author of The Innovator’s Dilemma. Today, digital platforms can disrupt any industry. Startups and forward-thinking companies use digital platforms to outflank slower-moving competitors to get in front of customers, listen to their problems, and quickly deliver solutions.
But many large companies are struggling to make the leap to digital technology in the Industry 4.0 era. For businesses challenged to remain competitive during the COVID-19 lockdown, speed, agility and extreme customer focus have also become the defining hallmarks of how enterprises can avoid technology disruption.
Whether it’s a pandemic, or other systemic problems facing enterprises, the pathway out is often unclear. Yet after working with scores of organizations with similar challenges in the past few years, we’ve identified three digital practice pitfalls that divert companies from adopting innovative software practices and a digital-first culture. These include such priorities as agile software practices, DevOps and cloud services, and making sure product development teams are aligned with the C-suite.
When company leaders rely on lengthy, outdated software development practices, you define success by output (code churn) instead of business outcomes (increased productivity). This practice results in teams that are more worried about their project plans than they are about the value they are delivering to customers. Ultimately digital investments need to yield results — such as lower operating costs or reducing the cost of conducting business.
In addition, teams using traditional software development methodologies have convoluted backlogs and create robust new features through lengthy release cycles without measuring their value to customers. Often, product teams feel pressure to move faster, but aren’t able to do so due to their inability to release software quickly. That’s why 80 percent of your customers use only 20 percent of software features, a long-held principle within software development.
On the other hand, agile software practices move teams closer to end-users, where customer feedback is prioritized, and success is measured by KPIs that reflect business objectives (growth). Today, companies can rely on numerous low-cost tools like questionnaires, surveys and email marketing to easily collect customer feedback and use it to quickly create and test prototypes.
Conversely, with long product development cycles, it could be weeks and months before customers have a chance to try new enhancements only to have your team discover that someone’s great idea for a new feature isn’t valued. Listening intently to customers helps companies avoid unnecessary development costs and technical debt, such as unused functionality or feature bloat.
Companies that move infrastructure to the cloud and implement continuous integration practices allow teams to quickly release and scale products as they grow without significant information technology and operational technology overhauls. What’s more, enterprises that employ agile development practices should be using tools such as AWS, Azure or Google’s cloud platforms. Each of these offerings includes specific tools that allow companies to scale, release and distribute digital products much faster than what’s possible through an on-premise data center.
Furthermore, by leasing powerful DevOps tools and cloud services, you’re free to redirect on-premise data center investments such as equipment and people—funneling that money into digital projects that earn a return and grow your customer base.
The road to establishing a digital culture starts at the top. Nerdery recommends executives align their product teams with company goals to ensure business-driven outcomes. Without alignment, there’s also little cohesion with your product teams.
In one example of how executive buy-in can unify strategic direction, the new CEO of Rockwell Automation publicly announced at a 2017 industry trade show the business would become a digital company, foreshadowing long-term plans to customers and prospects. Since then, a digital-first mentality has transformed how it defines design, operations and maintenance in the company’s offerings.
Once your software development product teams are aligned with C-suite business objectives, they are free to create KPIs and success metrics that measure real business results. This alignment usually leads to more collaboration, and support, from senior executives as new digital products are developed and delivered to customers.
In writing for the MIT Sloan Management Review, Amy Webb says there are 11 sources of disruption outside a leader’s control. One is technology. To be sure, you can create robust digital technology development capabilities to answer any competitive threat, regardless of industry. But we also believe disruption happens when you listen intently to your customers and respond with digital products that solve their problems. And do it faster than your competition.
The three keys are to move quickly with agile software practices, prioritize DevOps and cloud services, and align your product teams with the C-suite.
Looking to harness digital technology to disrupt your part of the world? Let’s collaborate.