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Digital Transformation: Business Operations

How can we lower costs, increase output, and continue to innovate while making our product available to the largest audience possible? These are common questions in meetings, from leadership, or by the watercooler. These same questions were faced by Henry Ford in the early 1900’s. His answer was the assembly line. While not the inventor, Ford saw that by conducting Business Operations differently and in a more efficient way, he could best drive these goals. He led Ford Motor Company to become the first manufacturer to use an assembly line. This reduced costs and freed up capital for further innovation, allowing the organization to grow. 

Fast forward over 100 years and business leaders still face these time-tested challenges. In a time where the cloud brings unparalleled scalability, the internet enables instant delivery, and consumerism demands new features and high value – these questions remain. Business Operations continue to evolve and are a key component of today’s Digital Transformation initiatives.
 
In the spring, we kicked off this series with Digital Transformation: A practical guide. As a continuation from that series, this blog will look at three ways Business Operations are changing software development:

  1. Skillsets
  2. Technologies
  3. Processes

In the last few years, we’ve seen organizations move from investing in and focusing on highly proprietary code bases in wholly owned data centers to more integrated solutions that leverage cloud infrastructure, software as a service (SaaS), platform as a service (PaaS) and other solutions, which allow Business Operations to scale through the use of services. In reality, these changes may be more of a mindset shift than a technical shift. 

Skillsets

While many IT operations staff has previously focused on managing local servers, applications, and services, they are now tasked with learning the capabilities, controls, and limitations of cloud based services. While some have suggested that IT operations are going away, rest easy… it’s not. It’s simply transforming. The introduction of infrastructure as a service and a quickly growing list of code management, build, deploy, confirmation management, and monitoring tools are causing IT operations and Software Development to converge. 

This convergence has been slow for some organizations. Sometimes resistance exists due to data security or reliability concerns. As often occurs during a period of transformation, certain regulated industries such as Health Care, Education, and Finance have frequently been the slowest to adopt. Rest assured that IT operations will not disappear. Instead, it’s becoming more powerful, adaptive, and cost effective than ever before.

Technologies 

Not long ago, if a company wanted to produce a new product, the first step was to build a new factory. This isn’t the case today. Shifts have occurred in global manufacturing where suppliers and contract manufacturers have spawned entire businesses that specialize in providing a very specific service. Together, entire cities have grown around these service providers. While the service provided is specialized, the products produced and business models served can be very different.

The same can be true for software companies. Whether it’s a simple transactions service or an entire system, organizations have the opportunity to leverage technology services as part of the products they create. For example, companies such as Coca-Cola, Activision and The Red Cross all utilize CRM software services from Salesforce.com. These companies couldn’t be more different.  However, they all have relationships to manage and have found that specialized services from Salesforce.com provide a very effective way to improve the way they interact with the people that are important to their operations.    

Correctly implemented services can make a dramatic impact on an organization’s performance. The Business Operations impact of technologies, such as cloud based services, has allowed companies like Instagram to grow to over 30M users with a total employee count of 13. While not typical, this example highlights the potential of using technology to transform your Business Operations.

Processes

It’s almost a guarantee that you have witnessed or contributed to a project that spent months or even years of resources, only to never deliver to customers. Perhaps you’ve been on a project that delivered a complex piece of software only to find out users leverage 1 or 2 features. Some studies say 68% of all IT projects fail and 60% of software features go unused. 

How can this happen? Agile was used, regular user feedback was given, and the team worked in small just-in-time planned iterations – yet the project still failed. One of the shortcomings of the Agile process is that it stops at development. 
 
Enter “DevOps,” a term used to define a portion of Business Operations that deals with the lifecycle of software creation from the management of code through monitoring the software in production environments. Correctly implemented, DevOps tools can make a dramatic impact on an organization’s performance.  At the enterprise level, the gap is only widening between low and high performing organizations.

When compared with low performing companies, higher performing companies have:

  • 200 times more frequent code deployments
  • 2,555 times faster lead times
  • 24 times faster mean time to recover
  • 3 times lower change failure rate

In the same way Agile provides user feedback, DevOps provides system feedback. Organizations that are able to harness this information and create visibility to it are better able to make decisions about their IT spend. 

What can you do?

So what can you do to speed up your organization’s Business Operations to shorten the gap between your company and the high performers?  Start by taking a closer look at the parts of your application or even your day to day technical tasks to discover ways to get started.  

Does your IT staff leverage modern Business Operations tools today? If not, why? What value would it bring and how much investment would be required?  Through training and tools could you maintain headcount with even better results? Would your staff be happier working with modern tooling that will help them grow their knowledge base?

It’s possible you experience regular or patterned technical inefficiencies. Maybe you’re finally fed up using SSH to access a server to review logs. One option would be to create a log aggregation using the ELK stack. Perhaps the VM that holds your organization’s core business logic is failing again. You could examine infrastructure as code implementations like Ansible to increase stability.

Maybe you’re not getting all the benefits from Agile delivery that you expected. Why? Is it because the codebase isn’t under control? Is it because build or deploys are complex and time consuming with a high error rate? How well is the software tested and how much of that testing is automated? Are your customers often the first to notice issues? Application monitoring tools can help you develop a proactive approach by surfacing issues before your customers are impacted.

Examining these areas can help you make incremental improvements in your Business Operations which will provide a high rate of return and help your organization win at Digital Transformation.

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Stay Tuned! 

This is the second in a four-part series where we will explore how sdg helps our customers embrace digital transformation. In the upcoming installments, we’ll take a deeper dive into digital transformation using concrete examples of how we’ve helped our customers create and implement their vision. We’ll look at what digital transformation means to different companies; from large scale integration projects that surface existing data to customers through new channels, to completely reshaping the face of a company’s flagship product. Watch for the next segment this fall!