When Marc Andreesen wrote the now-famous piece “Why Software is Eating The World” in the Wall Street Journal in 2011, he provided some unique insight into the power of software and how it can drive business transformation. He predicted that software would become more and more central to everything around us, and his premonition is on track. It may not be immediately apparent, but software is already integral to our lives – in the cars we drive, the appliances in our homes, the way we manage our money and look after our health, and in so many of the products and services we use in our day-to-day interactions.
It is also a fundamental part of the digital fabric that surrounds us. Even if software is not typically perceived as an important part of your business’ product, there is a high probability that it will be soon, particularly as software lays the foundations for legitimate applications of automation. Businesses cannot afford to ignore the way software is built, managed and used to power the world. Whether you are a bank, a pharmaceuticals company, a healthcare provider, a manufacturer or a retailer, digital is impacting your business and software will be a major part of that in the coming years.
How software is changing the way we do business
Embracing a software culture
Despite the connotations, becoming software-driven is about more than making technical changes to support the faster development and release of software; there are also cultural and structural implications. After all, agile businesses often work in smaller teams, constantly incorporate feedback into development cycles, and consequently make faster decisions. This can be one of the hardest parts of changing an organisation to become more digital, and there are different ways to do this. Some start a ‘garage’ in a cool part of town, others create a new division or evolve an existing one to work differently, while some choose to enact change from within. Essentially, software must be integrated into the broader business picture. For example, it is most useful when coded with an understanding of the consumer problem behind the solution, which ensures the software is as relevant as possible to the end-consumer experience.
Technology in of itself does not solve the challenges facing business today. Moving to a software-centric world means changing ways of working and adapting to new rules of development that are very different to how software was developed 20 years ago. To get started, businesses should tailor strategies around teams of people that have been involved in similar processes before and are comfortable working in a ‘product’ rather than a ‘project’ environment. By doing so, the transition is easier for traditional companies looking to get organised around software. While this may seem like a significant leap, the goal is ultimately to work smarter and more effectively to create new products and services more quickly, which can only be beneficial to keeping a business relevant.
The rise of subscription billing in software and digital services
According to the Q1 2018 benchmarking report on Digital Commerce Trends in Software & Online Services Sales by 2Checkout, the digital commerce and payments provider, 76% of sales in Q1 2018 have been for recurring-based purchases
Operate and iterate at speed
One of the biggest challenges for large organisations when embracing a software culture is transitioning to a model that helps them operate with both agility and at speed, factors that have taken on fresh importance given the plethora of nimble start-ups eating away at larger businesses’ market share. Whether it is developing software quickly and being able to release it in days rather than months, or making decisions faster, it is clear that companies with shorter development cycles are able to respond more swiftly to market changes and work more efficiently. If your competitors are increasingly smaller, more agile companies, then you need to adapt and become more agile and work at speed.
This is the main difference when examining digital native companies that have emerged in recent years. They famously run on very few lines of code, on a very flexible architecture, and run agile software development rather than adopting a waterfall approach, allowing products and services to be delivered very quickly. That sounds enticing, so why aren’t all organisation doing it? The answer is that newer businesses do not have as many assets as more traditional firms. Companies in the Fortune 1000 have years of investment in people, processes, systems, relationships, technology, regulatory understanding, privacy practices, and more that have fared them well over decades, or in some cases more than a century.
Although it may seem alien for a company with such defined processes in place, terms like “agile development”, “continuous integration”, “continuous delivery” and “cloud-native applications” need to become more commonplace. The software revolution is here, and those who do not adapt will likely fall by the wayside. This will require a significant shift in attitude from a project-based to a product-based way of working, something that faster software development allows. Fundamentally, this means a transition from measuring success on the delivery of software, to measuring success on business or user outcomes, which looks more holistically at software as part of a business.
Software outsourcing trends: How distributed teams empower digital transformation
Written by Sanjiv Gossain, Head of Cognizant Digital Business, Europe