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Be agile or be left behind: The future of IT (Part I)

Already read Part I? Head over to the follow up now.

Almost daily we’re subjected to newspaper headlines calling out the troublesome, inconvenient and sometimes devastating consequences of software failures.

Whether obtaining a bank balance, insuring a car, communicating with friends and family, trading stocks, or booking a holiday, it’s clear that software reaches into all aspects of our lives. It has become a critical enabler for organisations wanting to reach out, communicate with and sell to their target markets.

Developing correctly functioning software is, however, not a straightforward undertaking. With the rise of increasingly complex IT systems, the speed of technological change, and the potentially damaging effects of a software ‘glitch’, the need to assure quality is more important than ever.

Unfortunately, developing high quality IT systems on time and on budget, and subsequently maintaining and updating for years, presents a huge array of challenges.

In a bid to keep up with business-, consumer- and compliance-led IT changes, many organisations rely on an IT architecture made up of a static legacy backend, complex process-heavy middleware and constantly evolving function-rich front- end. Often, this IT architecture is crippled with technical debt, unnecessarily complex, and very slow to change.

Change, in this type of environment, can, at best, be compared to putting lipstick on a pig. At worst, to sticking a plaster over a cut to a major artery – the bleeding may be stemmed temporarily but, if the underlying problems are not addressed, the outcome will become irreversible and potentially life threatening.

Today’s sophisticated consumer demands an unprecedented rate of change

Greater access to and trust in technology is having a significant impact on consumer behaviour. Not only do consumers have more choice than ever before, they are also better informed and, with it, more demanding. Gartner identified the Power Customer who has “unprecedented access to the information they need to make more-informed decisions about switching between brands” .

This Power Customer can be fickle and transient when it comes to brand loyalty, and relies on recent experiences to inform brand choices. Increasingly, these experiences are online, either via a website or mobile app. For example, in retail banking, long gone are the days that consumers chose their bank because “my parents bank with them” or “they have the best interest rate”. Instead, mobile app or online functionality, and online reviews play a significant part in consumer decisions.

As consumer behaviour evolves, so does an organisation’s use of technology. Not only do organisations interact and transact with target markets in more ways than ever before, there is now constant pressure to meet demand for enhanced functionality, keep up with market trends and react quickly to competitive ‘topping’.

With increasingly sophisticated consumers, organisational agility is key

To further complicate matters, through cloud-based technologies, most organisations are, to a greater or lesser extent, on a technological par. Historically, technological advantage was dependent on an organisation’s IT budget – this is no longer the case. SMEs have access to the same powerful technology as larger multi-national conglomerates. The only difference is, in the majority of cases, the SME can identify a gap in the market and react far quicker than its larger competition.

What’s more, predictive analytics, based on big data solutions, is helping organisations remove the guesswork from decision making; enabling the comparison of marketing campaigns’ predicted impact against actual behaviours, and refining propositions in real-time.

With technological evolution accelerating and consumer-led demand increasing at an unprecedented rate, organisations must become more flexible and be able to deliver IT change into production quicker, at a lower cost and at little or no risk to the brand. Organisations that aren’t able to adapt quickly to consumer demands are being left behind and are losing market share.

The days of the two, three or even five year release schedule are dead. As are the days of the three, five or even eight (yes, eight!) year return on investment window.

Organisations, whilst they may accept the need to transform their IT architecture, may shy away from the process because it is expensive and time-consuming. It is, however, critical to an organisation’s success in an ever-changing and volatile business landscape.

Developing and maintaining high quality software to meet consumer demand is far from easy, with pressure exerted from five different sides:

1. Functionality – organisations are under pressure to continuously add new functionality, even after a project has started. A scope creep of 10 per cent during software development projects is not uncommon. Yet when the budget remains static, overall quality typically decreases since shortcuts are likely to be taken.

2. Time and budget – when shortening time-to-market and reducing budgets, development takes priority, with quality bolted on without being built into requirements.

3. Technical debt – for projects operating under tight time constraints, technical debt is likely to be created. Technical debt manifests itself either as poor architectural decisions and coding, or “optimising for the present, not the future.” If the removal of technical debt is deprioritised, it accumulates over time and makes changing and maintaining the system ever more cumbersome. Also, existing technical debt in legacy assets increases the pressure on delivering quality in legacy enhancement projects.

4. Technology push – the IT industry introduces new tools and methodologies frequently. Without adequate preparation, the promise of speeding up and simplifying development and design is often unfulfilled and increases project risk.

5. Skills – the quality of systems is under pressure from the lack of software development skills. Software development is an engineering discipline and there is a real need to pay attention to skills development and to selecting the right development team.

Every organisation should understand the impact of these software quality pressures. The metadata behind these pressures act as “pots of gold” providing much needed clarity and helping to understand the strength of existing IT estate. These “pots of gold” enable organisations to make informed decisions regarding skills development, project portfolio, and complexity-reduction measures based on hard facts, not perception or conjecture.

Standing still is not an option

Organisations need to put in place a new IT architecture that delivers agility and speed to market. A new IT architecture will increase the rate of business-led IT change into production; and enable an organisation to better connect with its customers. Through the new IT architecture, organisations can support the launch of new products/services quickly and effectively, and be able to react speedily to market trends by releasing new functionality in response to competitive “topping”. Ultimately, this IT change will provide an organisation with a competitive edge and, with it, greater revenues and increased profits.

What’s more, a new IT architecture de-risks team and technology issues from the current IT architecture, and reduces the complexity of the IT estate.

Last but by no means least, whilst increasing the top line, a new IT architecture will reduce the bottom line by reducing the total cost of IT delivery – at times, significantly.

Risk sharing through outsourcing

In reality it’s not practical, nor feasible to embark on this transformation journey alone. To deliver the change and realise the benefits quickly, while minimising the risk of rapid technology evolution, there is a need to outsource IT delivery to multiple suppliers.

Not only does outsourcing provide access to a greater pool of relevant IT (and, where necessary/appropriate, business) experience and expertise, it also enables an organisation to focus on its core business, whatever that may be, from insurance, banking to retail, media and aviation.

Technology is simply moving too fast for IT teams, as they struggle to command and implement the vast array of new technology. It is impossible for many organisations to keep up with the technology innovation curve, yet there is a critical need to use new technology to maintain a competitive edge.

Flexibility is key. The trend to outsource to a single supplier does not necessarily provide the best solution. It certainly does not provide flexibility. Neither does it provide the best in class supplier given the task at hand, nor commercial competition to ensure that an organisation is receiving the best value for money. It is, in fact, lazy outsourcing.

Typically, the driver for outsourcing is cost reduction. However, indiscriminate outsourcing of IT delivery as a whole, with cost reduction as the primary driver, often costs the organisation more – there is the pain of transition at the outset, increased management and rework costs, poor quality resulting in damage to the brand and the organisation’s reputation – this list is endless.

More often than not, outsourcing is driven by the need to pass on a problem (although very few will admit it) as opposed to realising a tactical improvement and a strategic advantage.

IT delivery should, in fact, be outsourced to multiple suppliers – each supplier is selected on their skills, experience and expertise in a specific area – mobile apps, e-commerce, legacy transformation, etc. – and their ability to meet the characteristics of the new IT architecture. For example, suppliers may be selected on their ability to support an agile approach to IT delivery and continuous delivery through automation of testing and deployment.

Ultimately, an organisation’s ability to accept that they are unable to keep up with new technology means that the organisation will look for external help. While sometimes seen as a negative, this is, in fact, a positive, empowering realisation.

Head over to Part II now, where Ben and David of SQS Software assess what approaches you can adopt to stay ahead of the IT curve.

SQS Software Quality Systems provides solutions for all aspects of the software product lifecycle and has over 7,000 completed projects under its belt with clients from all over the world.

Top image: Flickr (Infocux Technologies)