Since the past two decades or so, the software development industry has seen unprecedented innovation in technology and its use across all functions of the application development lifecycle. Globalization, unprecedented levels of competition, the ever-evolving regulatory landscape, and the tech-savvy customers have brought in a sea of changes, and challenges. Because of this, the need for reliable, distributed, and quality applications has grown considerably. This is compelling application development companies to steer efforts towards operational delivery excellence to drive quality, productivity and value in this complex and highly dynamic environment.
In this blog, I have tried to apply some of the learnings from automobile, retail, and other such industries to the software industry and tried to elaborate on how those can help in achieving delivery excellence.
Operational delivery excellence, although critical, does not happen in isolation. Delivery teams need to take an integrated approach to application development; they need to leverage frameworks and tools for orchestration, automation and delivery management, and align with the overall business objectives. They also need to analyze their processes and work culture to boost collaboration.
Understanding the importance of the right planning, governance mechanisms, technology and culture, and optimizing processes holistically is what can help drive on time, within budget deliveries even for the most complex projects or operations.
Having said that, here are the five critical drivers of operational delivery excellence:
1. Faster time to market: What is Amazon’s biggest advantage? I believe it is faster time to market. Any product that is ready to reach the consumer is getting listed on Amazon much sooner than reaching the warehouse of companies like Walmart Retail Store. With Amazon one-day delivery programs, the consumer can get the product probably earlier than the product being displayed in Walmart aisles. The same competitive advantage is applicable for software applications as well. One company’s business gain is the business loss for the competition, and that has become a big driver for the competition. Not considering this might get the competition eliminated and for sustenance, it is a must.
2. Cost: Irrespective of your company strategy (differentiation, cost leadership), cost always reduces the profit. Companies with differentiation as a strategy have a lot more cushion as their margins are higher. However, for companies with cost leadership, there is no other choice but to reduce the cost. Economies of scale are not applicable in software production, and hence, the only way to reduce the cost is by eliminating the software manufacturing wastes. The companies (with cost leadership strategy) does not have a choice and it is a critical driver for the sustenance whether they realize it or not.
3. Uptime: How many times did you check Google search just to test the working of your internet connection? Have you heard of Amazon application being down? A few years back, when Flipkart launched Big Billion Sale, their system crashed multiple times leading to a massive business loss. For any business-critical application, even a short downtime translates into a loss of business. Companies who have realized this have started implementing even the systems upgrades without any downtime at all. Forget about unplanned downtimes, businesses are working towards not having even any planned downtime. This truly can be a differentiator and could be an implicit brand statement (Think - “Amazon can never be down.”)
4. Delivery risk: What is the loss of recall of products? How much Honda or the suppliers must have lost on the brakes recall? How much VW must have lost for correcting Emission issues? The same risk is applicable to software products. If the delivery is not with quality, then there is a higher cost to be paid for the recovery. How many times your production engineers have spent sleepless nights for correcting updated software issues. It is very critical to get it right the first time and at the same time, have a quick rollback plan in place just in case something goes wrong.
5. Throughput: Ford targeted efficiency (economies of scale) with a push model. Probably it could afford to take warehouses at a cheaper rate as well. On the flip side, Toyota targeted effectiveness with a pull model. Probably they couldn’t afford warehouses (Japan - space cost ) and forced them to focus on delivery based on only what is getting consumed. Now we know what is the state of both companies. Of course, this is not the only reason but definitely, this is one of the reasons for the current state of these companies. It is no brainer that Throughput (effectiveness-focussed) will give better business results as they don’t carry any inventory (feature completed and not delivered for consumption is also inventory). For software services companies, this is not a big challenge as they are driven by customer priorities. But, for product companies, this could be a big differentiator.
As the business landscape gets more and more complex, success comes to those who play by a different set of rules. Faster time-to-market, lower costs and getting products right the first time have all become critical to enhance customer satisfaction and achieve a competitive edge.
Businesses have come to realize the importance of operational delivery excellence, and the critical role Agile and DevOps play in the application development process – not just as an enabler, but as a strategic component to drive change and boost business outcomes.
As companies struggle to cope with misalignment of objectives between IT and business, and poor delivery outcomes, the right planning, governance, lifecycle management, tools and technologies, and the right culture can help boost delivery excellence in IT operations. When armed with the right tools and processes, organizations can drive innovation, and deliver complex applications that meet the time and quality requirements of today’s competitive world.
What are your drivers for achieving operational delivery excellence? Have you leveraged technology to help you achieve those? I am curious to hear your views.