Friday, November 17, 2017

How Agile Methods can promote the Digital Transformation in Companies

Lately, much has been said about digital transformation, a concept that goes beyond automating processes, and shows that business models are no longer immobilized, that is, business models must be created and changed continuously. Technologies like Cloud Computing, Big Data, Mobile Payment, IoT (Internet of Things) and Artificial Intelligence offer a great potential for companies that are ready to invest into them and are willing to embrace change.


A new reality in the speed of business changes and disruptive technologies

For the longest time the organizational and management model of companies was based on the concept of operational stability, designed to withstand change. When these eventually arise, companies create long-term strategic projects that try to incorporate all the likely changes they see happening. The goal is to create a new model, also stable, that is long lasting. And the cycle repeats itself. The mental model is clear: long periods of stability, followed by a large break, adaptation to the new model and the consequent stabilization in the new context.

Obviously, this mental model permeated the IT governance guidelines and models. Their processes and methods clearly reflect the quest for stability and resistance to change. It is a vision of slow and gradual change, often backed by bureaucratic hurdles from an extensive list of management approvals.

Due to rapid technological evolution, companies are turning and creating unexpected competition for the market giants. For example, the creation of Uber in the taxi industry, Airbnb in the hotel industry, Netflix in the film and entertainment industry, Whatsapp in the communications industry, among others that directly influence previously stalled and changed business models using what technology currently has to offer as a way to position itself again in a competitive way in the market, causing a rupture in traditional business models, for new forms of business we named disruptive business models.

More and more business innovations are software based and digital businesses move very quickly simply because software changes much faster than physical things. This affects all business sectors. Some have already been affected, others will soon be affected. Rare will be those who will be more or less immune to these ruptures. And even sectors that are considered immune are subject to disruption when the boundaries between the industry sectors themselves begin to collapse. The competition may come unexpectedly from both a software company and from a completely different industry.
That is why many companies are adopting the agile methods in their way of working and are seeing that it is not only a process improvement, but a new strategic need. When it comes to agile methodology, the big challenge is to create agile mindset. It does not only mean having the skills and know-how, but also cultivating an agile team, being supported by the top management of the organization.

Digital Transformation needs Cultural Transformation

Numerous aspects involve organizational changes and new management practices and structure are resilient to be incorporated into corporate culture. Major changes are only possible if there is a change in the way of thinking. In speech, it is common to hear about innovative practices, but what you see in reality are organizations trying to embrace them in the old fashion. This fear is common even in companies that begin to adhere to the agile culture modestly in some areas, indicating that there is a concern in broadening the concept. As long as the transformation does not pass through the company as a whole, it will not produce results. It will only work when it reaches values and infects all employees.

Without this transformation, organizations will have more difficulty coping with the changing times of the digital economy. After all, it is no use bringing technologies that have been developed in this model if the company still does not live this reality. Technological solutions will not solve the way of thinking. So, what happens is a new product being used the old way. Agile Culture has a series of principles that help users receive the news and even direct projects for success, generating more business value and economy.

In times of crisis, recession and change, it is necessary to save, show results, be ready to change direction quickly, focus on delivering greater value in the shortest possible time and cost. It is a daily effort to try to achieve, with a single shot, the right target. Everyone looks for a way to be different, but it's no use just adopting technology. You have to conduct it and implement it in the right way, to the right audience and at the right time.

The beginning of the new dynamic is difficult and requires patience, but in times of need an opportunity to do something different is born. The change is continuous: what we heard as a trend yesterday has already become a reality today and the company can only grow if the organizational structure is ready to receive technological modernization.

Agile Methods to promote the Digital Transformation

Given this scenario of constant change, how can agile methodology help in the delivery of digital transformation? Simple: Unlike traditional methodologies, which require a lot of time to deliver something to the customer, one of the principles of the agile method is to satisfy the customer through deliveries in short timeframes in a continuous and advanced way, always keeping in mind the most important: The added value.

Often delivering something on the shortest time scale, between two to three weeks, causes the customer to see the added value and progress of the product. When we deliver value added, we need to keep three points in mind: 
  • Cost (how much does it cost to do this part of the product?)
  • Business (how much return will this part of the product bring to the business as a whole) and 
  • ROI (how long will it take to get the return on investment?)

Now imagine a project for mobile payment, following the traditional methodology, in which the customer would only receive the product ready, according to the agreed scope after a few months. Are the requirements raised by the client the same as those agreed upon at the beginning of the project? Did the technologies for this type of project have not changed during this period?

Using the agile method there is a better management of the change of requirements, since it assumes that the initial requirements will be altered, even later, that can create a competitive advantage for the client and still be a differential for the company that provides the service.

Another important point when we speak of agile method is the quality question, which is guaranteed through the correct application of best practices, in which frequent tests are performed on each of the functionalities, allowing the identification of any problem in advance necessary for the delivery product is completed within the deadline and specifications agreed with the customer.

Digital transformation today is a reality that has been growing and revolutionizing the IT market. Companies that still use development and delivery methodologies with bureaucratic practices and processes are bound to lose market share to competitors. To prevent this from happening, new processes work as allies and must be adopted by everyone in the company.

DevOps to facilitate the Digital Transformation

Fully integrated with the agility model, the DevOps concept when it comes to software development is also a process that facilitates Digital Transformation.

Traditionally, models such as ITIL have been used for a long time to control change processes by reducing the frequency of these changes and triggering controls if one occurs. In general the traditional process accumulates the changes and makes deliveries at once. The famous changes of releases. This expectation is one of the causes of many user areas investing not because they want to, but by necessity, in the famous "Shadow IT" initiatives, leveraged by offering new cloud alternatives, beyond the reach of IT rigidity. Delivering too late is the same as not delivering, because it does not meet the demand of the business: it was the solution to the problem of yesterday, not to today!

DevOps has another vision: its philosophy is of continuous delivery, with small pieces of code each time. It believes that changes in the business context happen so quickly and so often that waiting to accumulate all of them is putting the business at risk.
Adopting DevOps is not something that happens from one day to another. It is a conceptual change and a mental model. Demand knowledge of new practices and intensive use of technology to automate the software development process to the fullest. Many companies will have greater difficulties due to regulatory issues. Others with an immense legacy of systems are likely to maintain traditional processes in some of their systems and adopt methods such as DevOps in customer facing systems that exploit mobility.

Agility is a mental model. You need to embrace it in your mind before you can start to employ it in your business processes. 

Conclusion

The first step is to recognize that the traditional model has already aged. The second is the decision to embrace change. Agile and DevOps involves new practices such as continuous delivery of new features in small doses, use of dedicated, cross-functional and small teams, loose coupling architecture, automated environment processes, integration and continuous testing and interactive and collaborative environment, with users, operation and development acting together, without friction between sectors, as we see today.

From there, fill the gap of expertise, adopt technologies to automate processes and make cultural and organizational changes, dealing with the inevitable psychological barriers (adverse reaction to changes in the status quo, disbelief, etc.). 

Do you embrace and promote change and adoption of new and agile working patterns in your organization, or do you sit back and watch those who are imprisoned in their old thinking models manage it towards it's collapse?

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