Top players set the stage.
In a context of market acceleration powered by technology, there are only more top players challenging the existing ones.
“Software defines the speed at which business can deliver change and innovation”
—Drew Lanham, CEO at Cypress.io
Organizations are facing numerous challenges to deliver impactful and sustainable transformations:
- Continuously deliver value to remain competitive in a challenging ecosystem;
- Make choices of investment and priorities in a world with low predictability;
- Deliver a successful experience to “users” we don’t directly know or interact with;
- Deliver rapid increments that are hard to express and adapt them based on experimentation;
- Streamline end-to-end processes that are becoming more complex and interdependent.
These factors of accelerated changes with disruptive innovations in a globalized context is digitalization.
In this context where best practices are easily replicated, competitive advantages through operational excellence are at best, temporary. Thus, lasting competitive advantages reside in the unique way an organization delivers Quality at Speed on a hard to imitate set of activities: Quality Engineering.
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Continuously deliver value to remain competitive in a challenging ecosystem
The last decade has profoundly changed the innovation landscape. New actors emerge and expand globally in shorter cycles, supported by more investment and lowered barriers to entry. The disruption started with social media platforms and has already expanded to other areas such as banking and insurance; all sectors now have a “Tech” acronym.
Players are now growing to a valuation of a billion dollars in less than 2 years, creating a real pressure for the existing actors. The economies of scale coming from our industrial revolution are evolving to consider speed as important to survive. “Too big to fail” falls short; this is a profound change.
Successful actors now have to catch both Economies of Scale and Economies of Speed.
Traditional business approaches of the industrial era were to capture economies of scale with cost advantages from the scale of operation. In this logic, companies with access to large investments are able to optimize their unit production costs for more profits. This model works in a predictable environment with high barriers to entry and relatively slow innovation. Examples are Ford, Coca-cola, McDonalds. The only risk for these structures was to contain complexity due to their increased size to avoid suffering from diseconomies of scale.
But the main risk today is to be disrupted by new actors, fast.
Inspired by Porter’s 5 forces analysis, the convergence of technological, societal and financial evolution drastically changed the rules of the game. With simplified access to investment and accelerated innovation worldwide, actors quickly capture value within existing or new markets. Gregor Hohpe coined the term economies of speed to describe this new requirement of speed for companies survival.
Digital companies do in a few minutes what legacy ones take months to try to accomplish (e.g. Cloud adoption). Additionally, the converging forces of social networks and technology accelerates information flow, creating much more dynamic ecosystems. As a result, actors with a valuable proposition benefit from network effects rapidly scaling their offer across markets.
The emergence of Web3.0 powered by decentralized virtual currencies, large scale automation & AI will change these forces in the coming years. The reality of current digital market dynamics is a “winner’s take all” model where successful actors are able to capture both economies of scale and speed (take Amazon, Google, Netflix).
Make choices of investment and priorities in a world with low predictability
New players become unicorns in less than 2 years, disrupting the markets in which existing actors are trying to evolve.
VUCA, standing for Volatility, Uncertainty, Complexity, Ambiguity represents that instability of our ecosystem. It is hard to predict the positive outcomes of multi-year investments, hence requiring a different approach to digital capital expenditures. Companies need to direct their investment in continuous value delivery capabilities, leading us to the need of Quality Engineering.
Deliver a successful experience to users we don’t directly know or interact with
Customer experience (CX) is the vital fuel of digital growth to attract and retain the users. The mastery of user experience increments is therefore a requirement for survival in the digital world. A company that exceeds the customer expectations and its competitors quickly capture the majority of the demand.
The winner’s take all and network effects are a reality of the ecosystem, continuously increasing the level of exigence for all the actors. The numbers in the below graph talk by themselves; leaders just outperform their competitors in customer attraction and retention. Unsatisfied users switch to alternative experiences in a matter of seconds.
But crafting a user experience at the high-standard is hard. An organization must successfully iterate on two interdependent flows of “Customer to Code” and “Code to Customer”.
Deliver rapid yet complex increments and adapt them based on experimentation
Software requirements are hard to express, hence complexifying the task of defining, implementing and testing their potential value.
Companies need to rely on two main flows to achieve this challenge of continuous value delivery through experimentation :
- Lean Design Thinking to imagine, select, and define experiments that could be valuable.
- Lean Software Factory to rapidly implement, scale and evolve the user experience.
Done right, the results are fast end-to-end feedback loops allowing to identify and scale the elements of a successful user experience. The true complexity lies in the composition of teams, expertises and technologies to implement this high-standard. An organization must combine Design, UX, engineering, analytics, and personalization among other practices to reach that goal.
Streamline end-to-end processes becoming more complex and interdependent
Existing companies face the additional challenge of speed. New entrants are not only providing a successful user experience, they have a sustained rhythm of continuous and disruptive innovation. It is very hard for a slow runner to follow a marathoner running at a sprint velocity. As a comparison and inspiration, Amazon was performing 27,000 deploys a day back in 2010. Organizations need to experiment new ways of serving their customers to survive, accelerating and expanding the valuable user experience.
We can talk about Quality at Speed when companies need to reinvent themselves fast while delivering quality. Various industry reports correlate the capability of performing reliable changes quickly with business performance. The Accelerate report is the most known, using KPIs to categorize performers from Low to Elite. Similarly to the user experience, the Elite “winner takes all” category outperforms the following ones with a hard to cope difference.
Existing software engineering practices have evolved to support these requirements: DevOps seems now a de-facto practice to adopt, while SRE is a dedicated reliability area. DevOps is a good example of a cultural set of practices applying the Quality Engineering principle, enabling to deliver fast with more quality and confidence on a specific perimeter.
Complementarily, the technological landscape evolved for more speed, scaling, and control with Cloud platforms, containers, to name a few. From a technology perspective, these advances are quite powerful.
Who will now wait for 4 months for a server when they can get one in less than 10 seconds in the Cloud? (hoping they fully understand the implications of Cloud like security, governance and business model).
But while technology is evolving, one question remains: what is changing for our customers? This question is too rarely asked in organizational silos optimizing technology for the sake of technology or cost. What is the value of clean code if no one can or would use it?
Quality Engineering, the force constraining to Quality at Speed
Quoting Einstein, “We can’t solve problems by using the same kind of thinking we used when we created them”. To that effect, Quality Engineering includes factors that are forgotten by acting on the entire software lifecycle.
Organizations have to change their leitmotif from “Build faster and better” to “Build better to go faster”. As a note, this article is an excerpt from On Defining Quality Engineering: Thrive your business with Quality at Speed software.
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References
¹Meyer, C. (1993). Fast cycle time: How to align purpose, strategy, and structure for speed. Free Press ; Maxwell Macmillan Canada ; Maxwell Macmillan International.
²The World’s Unicorns Are Now Valued At $3T — Up By A Trillion In The Past Year. Who Invested?, Crunchbase.
³Nicholas D. Evans, How digital business disrupts the five forces of industry competition, CIO.com
⁴Gregor Hohpe, The Software Architect Elevator, O’Reilly.
⁵Leading in a VUCA world, How 21st-century leaders can find success amid volatility, uncertainty, complexity, and ambiguity (VUCA). Deloitte.
⁶U.S. Army Heritage and Education Center (February 16, 2018). “Who first originated the term VUCA (Volatility, Uncertainty, Complexity and Ambiguity)?”.
⁷Study Shows Great Customer Experiences Are Rewarded by Main Street and Wall Street : BusinessWire news
⁸Yves Caseau, The Lean Approach to Digital Transformation: From Customer to Code and From Code to Customer. Routeledge (2022).
⁹How large companies deliver software on a daily basis and other key metrics https://imgur.com/a/3uBZKBN
¹⁰2019 Accelerate State of DevOps Report, https://research.google/pubs/pub48455/
¹¹SRE is the acronym for Site Reliability Engineering, a set of practices that emerged from Google. More information is available in the glossary.