In the software-defined economy, businesses must be adaptable. This requires increasing delivery frequency, eliminating constraints, shortening cycles, and adopting a fearless attitude to experimentation. From the boardroom to the call center, companies must empower individual creativeness and eradicate any waste that impedes the ability to innovate.
The transition to a digital economy means that every line of business becomes a critical service provider as well as traditional IT consumer. With customers increasingly interacting via web-sites and mobile applications, every engagement – be it marketing, social media, order-processing, after-sales support – across a digital value chain, means business success is inextricably linked to the quality of digital interactions.
Software is also changing the business-customer relationship. For example, social media and its network effect now puts power in the hands of the customer, meaning marketing is shifting from a function that traditionally drives customer behavior to one that responds to it. No line of business is immune to these powerful forces.
But do these dynamics translate into an increased sense of urgency for lines of business within companies, and are business executives now taking a more active role in building and enhancing customer relationships using software? If so, what methods and practices are being used to help them meet their own KPIs?
These and many other questions were presented to 1000+ line of business and IT managers (61 percent of who were top-level executives and senior directors) in a global survey conducted by Frost & Sullivan on behalf of CA Technologies. By canvassing large organizations (minimum $250 Million USD) across all industry verticals, what emerged wasn’t so much confirmation that lines of business (LOB’s) are more IT aware, but are rather active participants in software development itself.
There are many new digital dynamics forcing the hand of executives – a fact evidenced by the survey when participants were asked to rate their business greatest challenge and three out four responded in the ‘digital affirmative.’ Interestingly, cost control ranked the lowest challenge overall, especially by those companies experiencing the highest levels of profit (11 percent or more year-over-year), which is further indication that traditional mantras of stability and operational efficiency are making for agility and innovation.
But are these factors influencing the make-up of an organization’s application architecture and portfolio? If LOB’s are becoming actual digital service providers, do they really have a stake in developing software applications? A large percentage of application investments for LOB’s (excluding the IT department itself) are still sourced from external vendors, however, 28 percent of applications are now being developed by LOB’s themselves.
So, with the evidence indicating that more software development is happening within LOB’s, what practices are being used to turn that promise into reality?
LOB’s are employing modern application architectures – cloud platforms to increase business agility by making IT infrastructure pliable, APIs to build extensive digital ecosystems, and containers and microservices for rapid application development. But technology is only part of the answer, whether the organization runs apps from the cloud or the data center, they’re business-aligned, using practices like Agile and DevOps to increase collaboration and eliminate costly silos and manual processes.
Within those organizations having the highest levels of modern application architecture adoption, eight out of 10 business executives stated that advanced maturity correlates to achieving KPI’s. Considering the diverse nature of KPI’s across LOB’s this is testimony to the value of modern applications.
But KPI’s aside, software modernism means good business. For example, those organizations widely leveraging new application architectures are six times more likely to gain better insights for competitive advantage and experience two times higher profit growth.
Another interesting result surfaced by the survey was the willingness of leading organizations to embrace dynamic systems. By their nature, cloud, microservices and API-centric communication introduce massive complexity, yet three out of four organizations acknowledge that these new technologies are key to improving time to market and deploying applications faster.
However, organizations do understand that while modern architectures are mandatory for business differentiation, the trade-offs in complexity can compromise goals. For example, 69 percent of organizations claim that the pressure to release software quickly is negatively impacting quality and security. Clearly, modern architectures fuel faster deployments, but organizations still struggle to get the speed and quality mix optimized – evidenced in the survey, with 67 percent of organizations claiming that they often trade-off security to release applications faster.
It might be expected that advanced organizations are immune to these issues, but that’s not the case. On the contrary, nine out of 10 of leading businesses categorically state that API’s and microservices increase challenges across both operational and risk vectors.
In the quest for speed and quality, leading organizations recognize that new cloud-centric technologies together with practices such as Agile and DevOps being part of an interconnecting strategy that transforms IT into an adaptive and transformational function. Backed by the survey, three out of four respondents stated that speed, quality and security mandates can be supported when practices such as DevOps are employed.
To stay relevant, businesses must embrace modern technologies and increased complexity. Cloud, API’s and Microservices are the modern instruments of a digital business, but we need the modern maestros such as Agile and DevOps to best play them. That’s why the majority (84 percent) of respondents are modernizing the technologies in parallel with the way software and applications are developed and delivered.
To review the challenges facing your peer organizations as they seek to embrace modern application architectures and the strategies guiding success, you can download the full survey here.
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