White paper. Driving Digital Enterprise Success: Building Agile IT

Transcription

1 White paper Driving Digital Enterprise Success: Building Agile IT

2 Abstract Enterprises are leveraging digital technologies to deliver services and provide greater value to customers. Going digital enables them to expand quickly across newer markets with the help of innovative business models. As a result, enterprises across different industries are adopting digital to not only increase their ROI, but also to enhance customer experience. For digital enterprises, IT is no longer a support function. Instead, it is the operational core. IT is no longer a backend record keeping function, but the enabler for offering newer products and services quickly to larger markets. In this competitive landscape, digital enterprises are under extreme pressure to quickly and more frequently deliver high quality offerings. Doing so depends upon the agility of the organization. This paper discusses a '3 + 1' capsule strategy for adopting enterprise IT agility. The '1' represents lean agile principles that are relevant to businesses and how they can be leveraged to set the foundation for all functions within a digital organization. It also highlights the need to imbibe these principles into the very culture of the workforce. Based on the principles adopted by an organization, agility can then be adopted across the '3' pillars of: organizational structure, processes and methodologies, and engineering practices 1

3 About the Authors Authors Prabhu Arumugham Global Product Head, Jile Prabhu is the product head for Jile. He is a Certified Scrum Master and SAFe Program Consultant (SPC) with over 19 years of experience in building innovative solutions across different industries. His expertise is in product management, strategy, design, engineering and deployment support. He is passionate about Agile methodology and has pioneered product development in the areas of test management, test automation, application lifecycle management and DevOps. Prabhu has several patents filed and granted in categories of test automation and management. Anupama Kasturi Product Management Head, Jile Anupama has over 12 years of experience working on software reusability, application development and delivery. She is a certified SAFe Program Consultant (SPC) and in her current role, heads the product management team for Jile. Her areas of interest include agile, application lifecycle management, test management and automation and, DevOps. 2

4 Contents Why Digital will Define Organizational Success 04 Realizing Full-Fledged Business Agility in Digital Enterprises 04 Building Agile IT Organization: Harnessing the 3+1 Capsule Strategy 05 Step 1: Identifying the Core Principles 06 Step 2: Focusing on the three pillars 08 Pillar 1: Revamping the Organizational Structure 08 Pillar 2: Gaining a Bird s Eye View of Process Agility 10 Pillar 3: Adopting Agile Engineering Practices 12 Embracing Agile IT for Competitive Advantage 14 3

5 Why Digital will Define Organizational Success Before the dawn of digitization, day to day transactions were complicated and timeconsuming. A simple errand such as paying a bill could involve waiting in a queue for long hours, and require much time and effort. With the advent of digitization, the same task can be completed online, in a matter of minutes. This simple everyday task is a great example of the power and convenience offered by today's digital technologies. A true digital enterprise integrates information, processes, work, and most importantly, people, to enable the entire organization to collaborate more efficiently and effectively. This helps the organization deliver more valuable products and services. Technology has become one of the key differentiators that enable companies to effectively compete with their rivals. There is little doubt then that businesses across industries will benefit from keeping pace with the digital revolution to innovate and improve their operations. The advent of mobile technology as the new medium for customer engagement has changed the power equation between businesses and consumers. Greater power now lies in the hands of customers who dictate when, where and how they would like to engage with businesses. According to Mr. N Chandrasekaran, CEO and MD of TCS, A digital strategy is not about building mobile apps or using cloud. It is about building new business models. It is about changing the whole way of working, the way you understand and interact with your customers as well as the products and services you offer."¹ As a result, going digital is imperative for companies that are looking to expand their business across geographies. However, enterprises should move from the notion of siloed components to a unified approach through digital transformation. Companies need to analyze and incorporate digital holistically across the entire ecosystem to realize real ROI. Realizing Full-Fledged Business Agility in Digital Enterprises Business agility is the ability of enterprises to respond quickly to changing market needs in a more productive way. Digital platforms enable increased business agility by driving certain attributes: Innovative: Digital platforms allow businesses to innovate, not only in the form of products, but also in the form of business and operating models and services. This enables digital enterprises to constantly innovate, stay ahead of the competition, and provide the best product and service delivery experiences to their customers. For instance, Amazon's Kindle has transformed the reading habits of thousands of book lovers, delighting customers with easy access to thousands of books that they can take anywhere they go. [1] Wharton, Five Digital Forces that are changing the Tech Industry, Aug 11, 2015, 4

6 Fast: Digital processes lend themselves to faster changes and transformations. The ability to transform processes quickly to expand the scope of business increases business agility. For instance, when Walmart was experiencing soaring online revenues, they that unified the company's ecommerce platforms and resulted in a 30% increase in online revenues. ² Responsive: Digital enterprises can respond to changing market conditions and expand to newer geographies with unique models that address customer demands. When broadband technology entered the marketplace, one company identified an opportunity in the real-time entertainment space. Netflix started off with an online DVD business but later moved into video streaming with the introduction of broadband. When the video streaming market took off at the end of 2013, Netflix had more than 40 million video streaming subscribers.³ Creative and design oriented: Digital enterprises have the flexibility to adopt creativity into their work ethos by enabling out of the box thinking. For example, Apple has become synonymous with creativity by thinking ahead of its time in terms of cutting edge designs and products. It even ventured beyond its core business and entered the music retailing business. With the growing popularity of 'default is digital', many large enterprises are beginning to realize that Information Technology has moved beyond the role of an enabler to that of a strategic innovator. Digital enterprises are more business agile than other enterprises and since IT is at the core of a digital enterprise, it needs to be agile. In this context, IT refers to portfolio management (business), development, QA, and delivery teams (operations). Building Agile Enterprise IT: Harnessing the Capsule Strategy Businesses that realize the importance of agility and embark on a transformative journey often face certain challenges in building an agile IT function. They are confronted by different, constantly evolving technological terms such as Continuous Delivery, DevOps, Scaled Agile and so on, making it difficult to prioritize and chart out a transformation roadmap. In such a scenario, we recommend that businesses leverage the Capsule Strategy to help systematically implement enterprise IT agility. The number '3' in the Capsule Strategy represents the three pillars on which agility should be driven: 1. Organizational structures 2. Processes and methodologies 3. Engineering practices [2] McKinsey&Comapny- Insights & Publications, The seven traits of effective digital enterprises, May 2014, [3] McKinsey&Comapny- Insights & Publications, The seven traits of effective digital enterprises, May 2014, 5

7 The number '1' in the Strategy represents certain core lean and agile principles that form the foundation for organizational culture and processes that can help enterprises adopt agile practices. Building an agile IT organization is a two-step process. It involves the identification of core principles and focusing on the three pillars identified earlier. Step 1: Identifying the Core Lean Principles Figure 1: Capsule Strategy to Adopt Enterprise Agility It is important to instill specific core lean principles that will lead to the required change in the mindset and culture of the workforce. Organizations need to identify the relevant core principles and rigorously adhere to them. 6

8 Figure 2 represents some of the core principles that organizations can choose from Figure 2: Core Principles for IT Agility Apply Systems Thinking: Organizations should focus on an end-to-end value delivery system rather than a part by part optimization approach. This helps reduce the cycle time. It is also important to build a culture that breaks the barriers of organizational silos and helps employees across teams work collaboratively. Deliver in Small Increments: Large batches of deliverables usually need more time for processing and require more people to get it done. On the other hand, smaller batches move efficiently through the system and this allows businesses to distribute work evenly across teams. Deliver at Regular Cadence: To ensure an efficient delivery process, businesses need to plan processes to have a regular flow. They can choose to deliver every two or three weeks, based on the business value, time, and effort. This pattern must be followed consistently to ensure transparency and coordination across different teams. Deliver Fast: It is important to deliver quickly so that customers can realize value and provide early feedback rather than wait for a long time by which time market and consumer demands may have changed. The key here is to reduce the wait time between processes, which in turn increases the throughput. 7

9 Build quality In: Quality should be ingrained in the system. Quality is not merely a step in the system delivery process, but rather a part of every team member's job. If this is ensured, a significant amount of effort and time required to correct defects at later stages in software development can be saved. Just in Time and just enough planning: A Just in Time (JIT) approach in an IT scenario helps make decisions in real time instead of in advance. This is a simple, yet efficient method to enable detailed but limited planning. Such an approach ensures shorter and faster delivery cycles. Eliminate Waste: Waste is anything that does not add value to the product. Businesses need to optimize processes to reduce the wait time through better planning and provisioning. For instance, automating testing processes ensures that resources will not need to wait for servers to become available for manual testing. Decide as late as possible: Businesses need to be flexible and allow real time information and feedback to drive decisions. It is better to have several options on the table and delay the most crucial decisions until customer requirements become clearer. Empower teams: Leaders in mature organizations need to focus on learning effectively and empowering teams to take decisions. Self-organizing teams need the right capabilities and infrastructure, and teams should be allowed to devise their own working procedures and commitments. Reflect and improve continuously: More than merely delivering the product to the customer, businesses should focus on whether they are building it right. Leaders need to evaluate how processes are being handled and how they can be improved. Step 2: Focusing on the three pillars Once the core principles have been identified and incorporated into the work culture, businesses need to turn their attention to the following three pillars. Pillar 1: Revamping the Organizational Structure The role of an IT organization is shifting from that of a bid executor to that of a co-creator of solutions. This shift creates superior value and economic benefit for the enterprise. As a result of this shift, the success of an organization is measured based on the outcome of individual functional responsibilities as well as business outcomes. This can be achieved only if agility is brought into business and the Application Development and Delivery (AD&D) teams, which calls for core organization structural changes. Eliminate functional silos: In a traditional IT organization, teams are structured along functional areas headed by functional specialists, and are evaluated on their delivery. This helped maximize specialist utilization on a shared basis across business initiatives. While the utilization of specialists has improved, this approach introduces delays in overall 8

10 delivery due to increased wait times. Businesses can solve this delay by focusing on eliminating functional silos and make dedicated specialists available for each initiative. This helps align an enterprise with core lean principles of 'Eliminate waste' by reducing resource wait times and helping them 'Deliver Faster'. Focus on business value and outcomes: Organizational structures should be evaluated on business outcomes and this requires exposure to business goals. If the teams are organized around individual functions, they will not have visibility of the entire business functionality and goals. These teams cannot align their work towards business goals and thus cannot be measured on business outcomes.⁴ Businesses therefore need to structure teams in alignment with business outcome based initiatives or the 'Capabilities' of the enterprise (as detailed in figure 3). 'Capability' for an enterprise refers to a set of integrated systems that work together to deliver value. Figure 3: AD&D Teams Organized Along Enterprise Capabilities The success of these teams is measured based on business results such as cost effectiveness, business profitability, and so on. This method can help teams deliver value quickly and in small increments, as all IT functions collaborate to leverage specialists' expertise as well as automation towards common goals and a timeline. This also aligns with core lean principles such as delivering faster and in smaller increments, and applying systems thinking. [4] Source: Forrester Report Modern Application Delivery Demands a Modern Organization by Kurt Bittner, June 27,

11 Build cross functional and empowered BizDevOps teams: While structuring an IT organization into Capability teams it is important to ensure that they are cross-functional and equipped with the skills, resources, and infrastructure required to deliver business value. This is also a DevOps industry best practice as it reduces shared resource dependency and enables agile delivery. It is important for all stakeholders to gain deeper visibility into the business objectives and economic benefits achieved through delivery outcomes. Engaging business owners in team activities and co-owning solutions can help achieve this. As a result, we refer to capability implementation teams as BizDevOps teams. Capability teams should be empowered to make decisions because they are time bound Focus on product centric versus project centric delivery teams: Traditionally, shared teams worked on multiple projects and were short lived. At the end of a project, the team is broken up and assigned to different projects, which lead to delays in the value chain. On the other hand, product centric teams remain unchanged across releases, and can retain valuable business knowledge that saves time and effort. Modern Capability teams achieve this as they are long lived and retain the business knowledge that helps to incorporate changes faster. Pillar 2: Gaining a Bird's Eye View of Process Agility After the IT enterprise is organized by capability, the next step is to bring agility into processes. Figure 4: Optimize the Process as a Whole: Demand to Deploy Value Chain Building agility holistically: If an organization wants to bring agility in their processes, they need to look at whole demand to deploy a value chain shown below. The application development and delivery process starts with the demand for changes or new initiatives. This goes through a delivery cycle and is then deployed for usage. This 10

12 process should be optimized and agility brought into the entire cycle by considering methods to improve cycle times and eliminate waste. This will ensure alignment with the core principle of applying systems thinking. Businesses also need to ensure that work flows frequently in small chunks throughout the process, enabling the enterprise to deliver faster and in small increments. This can be achieved by managing demand and approving it frequently through continuous planning, and then delivering it in frequent releases, as opposed to the traditional annual or half-yearly releases. Agility in portfolio budgeting and planning: Traditionally, organizations drove their topdown strategy through detailed portfolio planning. Investment planning and budgeting were carried out annually with the mindset that decisions concerning scope, budget and schedule should be made ahead of time. However, business priorities tended to shift after budget approvals and project kick-off, and initiatives had to wait until the next budget cycle for approvals. Businesses can bring agility into investment planning by evolving their strategy and allocating budgets in frequent cycles driven by customer feedback. Such a method incorporates core principles into portfolio planning and budgeting, allowing organizations to reflect and improve continuously, and deliver in small increments. Capability teams own the budget and are empowered to utilize it in a manner that provides maximum economic benefit. This transforms project-based funding models into lean agile budgeting models. Agility in demand management: Demand for new initiatives always comes in sudden spikes. A surge in demand causes system overflow and reduces throughput. To streamline this flow, it is important to visualize incoming demand, take it through a light-weight business approval cycle, and ensure a continuous flow of prioritized demand items to capability teams. By bringing visibility into the capability team's execution and velocities, businesses can plan the right amount of work-in-progress items, and ensure smooth and continuous flow of demand. Agility in development: To bring agility into implementation, businesses need to ensure that capability teams are budgeted for prioritized initiatives, which are then implemented consistently in cadence. Adopting agile methodologies such as Scrum, Extreme Programming (XP) and Kanban enables teams to deliver incrementally at regular cadence and respond to change. This method also enables teams to reflect and improve continuously. Scaling Agile in Development: Agile methodologies bring agility into delivery teams working on independent applications. In large enterprises, it is important to bring agility across teams by adopting frameworks such as the Scaled Agile Framework (SAFe). This framework brings together multiple teams to form an Agile Release Train and work in cadence to deliver program increments. At every iteration, a fully functional working system is delivered after integrating and testing the software delivered by individual teams. These teams develop in cadence and release on demand. This ensures that at any 11

13 iteration, teams always have a potentially shippable increment that is ready to be deployed into production. 5 Agility in delivery: It is not enough for capability teams to merely develop working systems faster. They need to deploy systems into the production environment so that the enterprise derives value from it. Adopting DevOps practices that emphasize communication, collaboration and integration between software development and IT operations helps reduce the wait time for operations teams to release new features into production. Teams can bring agility into delivery by implementing release and deployment management practices to optimize and automate the deployment pipeline. Pillar 3: Adopting Agile Engineering Businesses must incorporate agile engineering practices to leverage technology advantages, and bring automation and speed into their processes Continuous Integration (CI): Continuous Integration (CI) is the process of automating the orchestration of triggering a build, integration and unit test at every source code commit to the configuration management systems. CI is facilitated by a complete and repeatable build package with associated unit tests. This enables the entire unit test suite to be executed whenever a project is built. ⁶ Businesses need to set up CI processes to enable teams to integrate code continuously. Longer gaps between integrations make it exponentially difficult to find and fix problems. The CI practice is important to deliver changes frequently, as businesses need to speed up time to market and cannot afford to spend long periods of time in integration activities. Build automation: Build automation tools are software applications used to create software build by compiling source code into packaging binary code. These are invoked by CI tools to enable build creation and validation at every commit. Any organization that aims to deliver high quality applications should consider automating their software build cycle as much as possible. Code quality analysis: Static analysis is the analysis of software code that is performed without actually executing programs. A static code analysis tool automatically checks the source code for compliance with a predefined set of rules set by the organization. These tools are fast and efficient in finding code defects and inconsistencies, especially in large code bases. They identify design issues such as cyclomatic complexity, reduce code complexity, improve maintainability, and identify potential software quality issues before the code moves to production. They can be integrated into CI tools to ensure that static analysis is performed in parallel to build creation, and that the build process is continuous. Static code analysis tools have been in existence for various technologies for a long time. These tools are gaining in importance in the agile context because of the increasing rate at which code is changed and delivered. Well structured documented source code is a major artifact and its quality is of extreme importance for maintainability [5] Scaled Agile Framework, Scaled Agile Framework 3.0, June 2015, [6] Forrester Report, TechRadar: Continuous Software Delivery, Q2 2015, May21,

14 Agility in delivery: It is not enough for capability teams to merely develop working systems faster. They need to deploy systems into the production environment so that the enterprise derives value from it. Adopting DevOps practices that emphasize communication, collaboration and integration between software development and IT operations helps reduce the wait time for operations teams to release new features into production. Teams can bring agility into delivery by implementing release and deployment management practices to optimize and automate the deployment pipeline. Test Driven Development (TDD): Teams use TDD to ensure that features meet requirements. In contrast to traditional development practices, developers write automated unit tests that vet a feature's functionality before they write the code for the feature itself. This practice also ensures creation of automated tests that can be exploited byci and other testing systems. To reduce the overall cycle time, organizations need to implement quality right from the beginning. TDD practices enable this core principle. Continuous deployment through release automation: Application release automation tools are used to automate the deployment process of one or more software components into a desired target environment. Organizations are challenged by a complex application landscape, and multiple environments and deployment procedures, which increase deployment time. Release automation techniques reduce the deployment time cycle and manual errors involved, and bring agility into the deployment process. This is critical when businesses need to deliver quickly and frequently. ⁷ Automated testing: Automated functional testing tools focus on automating black box testing by verifying the output generated by a user interface. These are extremely useful in reducing the regression testing effort and time As agile adoption grows newer functional test automation tools enable test-driven and behavior-driven development Enterprises also need to consider non-functional test automation. Environment management: Environment Management tools automate the provisioning and management of environments based on a base lined environment configuration. These tools store meta-data information about environments and use it to create fresh environments on the fly. They are important because production systems are extremely expensive and maintaining duplicates to replicate issues increases costs. These tools help provision environments of equal parity, track its state and bring in standardization.⁸ Modern IT enterprises require teams to deliver faster which means they cannot afford long wait times to avail the right development or test environments. Environment management systems help reduce these wait times. [7] Forrester Report, TechRadar: Continuous Software Delivery, Q2 2015, May21, 2015 [8] Source: Gartner Report, Make your SDLC more Agile by Using Cloud Environments, Aug 26,

15 Embracing Agile IT for Competitive Advantage Digital enterprises have proven time and again that they have better customer engagement and connectivity through consistent product and service innovation and faster delivery to market. This results in more revenue and enhanced customer experience. As IT is the backbone of a digital enterprise, making IT agile is the way forward. Enterprises need to change existing mindsets by implementing lean agile principles across all functions, and reorganize their governance structures, data and systems standards, and processes. This can help them build agile enterprise IT that can fully support their digital goals. Such a fundamental shift can help businesses realize greater benefits from agile, ultimately resulting in competitive advantage. 14

16 About Jile Jile, a product offering from Tata Consultancy Services Ltd, helps enterprises in continuously building and shipping reliable software faster to the market. It is the first Agile DevOps product on cloud, by Agile teams and for Agile teams, that will help you scale from single teams to large programs and portfolios to drive change. Contact For more information about Jile, visit: Or at contact@jile.io Visit our resources section at for more whitepapers, blogs, product videos and knowledge articles! About Tata Consultancy Services (TCS) Tata Consultancy Services is an IT services, consulting and business solutions organization that delivers real results to global business, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of IT and IT-enabled infrastructure, engineering and assurance services. This is delivered through its unique Global Network Delivery Model TM, recognized as the benchmark of excellence in software development. A part of the Tata Group, India s largest industrial conglomerate, TCS has a global footprint and is listed on the National Stock Exchange and Bombay Stock Exchange in India. For more information, visit us at IT Services Business Solutions Consulting All content / information present here is the exclusive property of Tata Consultancy Services Limited (TCS). The content / information contained here is correct at the time of publishing. No material from here may be copied, modified, reproduced, republished, uploaded, transmitted, posted or distributed in any form without prior written permission from TCS. Unauthorized use of the content / information appearing here may violate copyright, trademark and other applicable laws, and could result in criminal or civil penalties. Copyright 2015 Tata Consultancy Services Limited