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Why Digital Transformations are Failing at Scale
The document discusses the challenges in digital transformation, emphasizing that many initiatives fail due to issues such as static core systems and siloed work. It advocates for a shift towards product-centric development and the adoption of modern architectural practices like microservices to enhance delivery speed and organizational agility. Additionally, it highlights the importance of managing software delivery as a business capability to drive digital growth and customer satisfaction.
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Why Digital Transformations are Failing at Scale
- 1. 1© 2017 FORRESTER.REPRODUCTION PROHIBITED.
- 2. 2© 2017 FORRESTER.REPRODUCTION PROHIBITED.
- 3. © 2019 FORRESTER.REPRODUCTION PROHIBITED.
- 4. © 2019 FORRESTER.REPRODUCTION PROHIBITED. The New Business Imperative: Leading With Product Development Diego Lo Giudice, Vice President & Principal Analyst June xx, 2019
- 5. 5© 2019 FORRESTER.REPRODUCTION PROHIBITED. Digital transformation is the goal Source: Forrester’s Q1 2018 Digital Process Automation Survey Base 354 business and technology leaders
- 6. 6© 2019 FORRESTER.REPRODUCTION PROHIBITED. Most digital transformation initiatives are failing Source: “The Sorry State Of Digital Transformation In 2018” Forrester report. Base: 1,559 business and technology decision makers
- 7. © 2019 ForresterResearch, Inc. Reproduction Prohibited CUSTOMER CRM Support What is Core ? …. Systems of Record. EMPLOYEE HR Recruiting FINANCE Accounting Planning RESOURCES ERP Supply Chain BIZ INTEL Analytics Reporting RETAIL Inventory, shipping, logistics, make-to-order AIRLINE Crew management, maintenance & operations
- 8. © 2019 ForresterResearch, Inc. Reproduction Prohibited Customer experience Broken Customer Journeys Create Digital Illusion! The Core Mobile CRM Social monitoring Supply chain Vendor mgt Logistics B2B
- 9. © 2019 ForresterResearch, Inc. Reproduction Prohibited
- 10. © 2019 ForresterResearch, Inc. Reproduction Prohibited “My Mobile app did not approve my Web online payment”
- 11. @mik_kersten projecttoproduct.org Mawdud Choudhury“Brick & Mortar US Retailer Market Value” ExecTech Stock Price Change 2006-2016 50% of S&P 500 projected to be replaced in 10 years
- 12. 12© 2019 FORRESTER.REPRODUCTION PROHIBITED. So what’s going on?
- 13. 13© 2019 FORRESTER.REPRODUCTION PROHIBITED. #1. Your Core Is The Elephant In The Room !
- 14. © 2019 ForresterResearch, Inc. Reproduction Prohibited Our Core Problems… Static and Inflexible Unreachable Indispensable Data Growing Technical Debt
- 15. © 2019 ForresterResearch, Inc. Reproduction Prohibited What Else is Holding Us Back? Siloed work and limited collaboration Agile gets stuck! Forced to work on large batches Agile gets stuck! Doing Agile and not Being Agile.
- 16. © 2019 ForresterResearch, Inc. Reproduction Prohibited Agile (…Fast, nimble small batches) The Bimodal Drama Waterfall (…slow, complex, big batch) Systems Of Engagement Systems Of Record
- 17. © Tasktop TechnologiesInc. 2019 Tasktop Confidential Information 120 days To deliver a feature from an idea to customer 2.5 % Actual development time Other Development
- 18. © Tasktop TechnologiesInc. 2019 Tasktop Confidential Information Scaling Staff, Slowing Delivery Business perceives that IT is delivering less and less as investment grows WHY?
- 19. @mik_kersten projecttoproduct.org Image taken withpermission from Jon Smart presentation at DOES London 2018 – credit Klaus Leopold Local Optimization ofValue Stream
- 20. 20© 2019 FORRESTER.REPRODUCTION PROHIBITED. #2. Speed Of Delivery Is Stuck !
- 21. © 2019 ForresterResearch, Inc. Reproduction Prohibited enterprises release applications monthly 20%release applications monthly 9%release applications monthly +
- 22. © 2019 ForresterResearch, Inc. Reproduction Prohibited Your ”Development” Release Has Long Been Stuck ! Base (2018): 3,228 Developers Base: 546-719 Developers who work for a software company, for internal IT, or in technology services Source: Forrester Business Technographics Developer Survey, 2014-2018 0% 5% 10% 15% 20% 25% 30% We average one release a year (or less frequently) We average two releases a year We average one release per quarter We average one release a month We average one release a week We average a release a day We release many times per day "How often does your team or teams release applications?" 2018 2017 2016 2015 2014 One Release a Month
- 23. 23© 2019 FORRESTER.REPRODUCTION PROHIBITED. How Can We Fix This ?
- 24. 24© 2019 FORRESTER.REPRODUCTION PROHIBITED. #1. Remove The Elephant In The Room !
- 25. © 2019 ForresterResearch, Inc. Reproduction Prohibited Eliminate The Bimodal Drama Agile (…Fast, nimble small batches) Systems Of Engagement Systems Of Record Waterfall (…slow, complex, big batch)
- 26. © 2019 ForresterResearch, Inc. Reproduction Prohibited Move to cloud, to decouple and decompose through Containers, APIs, Microservices architectures and business services…
- 27. 27© 2019 FORRESTER.REPRODUCTION PROHIBITED. Modern Software Correlates With Business Growth Source: Forrester’s Business Technographics® Business and Technology Developer Survey 2018 Which of the following architecture styles does your organization currently use or plan to use? Base: Developers who work full time, n=3,111 Currently use microservices have revenue growth of 15% or more Currently use Planning to use Don't know Not interested or no plans 42% Microservices / microservice architecture 32% 17% 9% Not interested or no plans have revenue growth of 15% or more 31%11%
- 28. © 2019 TasktopTechnologies Incorporated. Agile DevOps Not Enough
- 29. © 2019 TasktopTechnologies Incorporated. From silos and proxy metrics
- 30. © 2019 TasktopTechnologies Incorporated. TOVALUE STREAM MANAGEMENT WITHTHE Flow Framework™
- 31. 31© 2019 FORRESTER.REPRODUCTION PROHIBITED. #2. Manage SW Delivery As A Business Capability
- 32. 32© 2019 FORRESTER.REPRODUCTION PROHIBITED. Software Delivery Requires Core Competencies Digital matters.. Software powers digital.. Software excellence = Business excellence
- 33. © 2019 ForresterResearch, Inc. Reproduction Prohibited Software Delivery Capabilities Become A CEO ”Affair”
- 34. 34© 2019 FORRESTER.REPRODUCTION PROHIBITED. To harness digital... Forrester report: Harness Emerging Technologies To Differentiate Your Digital Business Beginners do only Agile... Advanced capability also requires pervasive continuous delivery
- 35. 35© 2019 FORRESTER.REPRODUCTION PROHIBITED. Measure Customer Satisfaction And Business Value
- 36. © 2019 TasktopTechnologies Incorporated. Getting Metrics
- 37. © 2019 TasktopTechnologies Incorporated. Delivery Meter
- 38. © 2019 TasktopTechnologies Incorporated. Speed to Value Meter
- 39. 39© 2019 FORRESTER.REPRODUCTION PROHIBITED. #3. Organize Around Products
- 40. © 2019 ForresterResearch, Inc. Reproduction Prohibited Increase team autonomy, reduce dependencies to really move fast by aligning team, work, and architecture structures: “small is beautiful” Work Structure (Small Batches, MvPs) Team Structure (Squads, Product Teams) Product Architecture APIs, Micro- services
- 41. 41© 2019 FORRESTER.REPRODUCTION PROHIBITED. Automate Governance Through Pipelines CI Tool Automated Test and Validation Automated Deployment Code Repo Artifact Repo Code
- 42. 42© 2019 FORRESTER.REPRODUCTION PROHIBITED. Source: Elevate Agile-Plus-DevOps With Value Stream Management Forrester report Use VSM To Understand Flow In Pipelines and Value Delivered
- 43. © 2019 ForresterResearch, Inc. Reproduction Prohibited Product-Centric Devs Are More Likely to Adopt Modern Practices Than Siloed Dev teams 46% Use design thinking (versus 25%) 61% Use Agile (versus 52%) 48% Use DevOps (versus 30%) 33% Use Value Stream Management (versus 14%) Base: 3,228 US developers Source: Forrester Analytics Global Business Technographics® Developer, 2018
- 44. © 2019 TasktopTechnologies Incorporated. Business IT ARTIFACT TYPES7 TOOLS6 PROJECTS10 TEAMS8 PRODUCT1
- 45. © 2019 TasktopTechnologies Incorporated. Product Model Jama Atlassian Jira Micro Focus ALM ServiceNow Condition A Condition B Condition C Condition D CONDITION: Features in Project A, C and F CONDITION: Requirements From Project Area “Massive Initiative” where owner is “Joe Smith” CONDITION: Risks that were created after 2017 and is assigned to Component B, D, F CONDITION: Support Tickets from Project H and J and if status is past the accepted state
- 46. © 2019 TasktopTechnologies Incorporated. MODELING allow your complex, messy reality to exist while simultaneously evolving, improving and measuring that reality
- 47. © 2019 TasktopTechnologies Incorporated. Learn more at http://tasktop.com mkersten@tasktop.com @mik_kersten
- 48. © 2019 TasktopTechnologies Incorporated.
- 49. © 2019 TasktopTechnologies Incorporated. 49© 2019 FORRESTER. REPRODUCTION PROHIBITED. Adopt Product-Centric thinking to Accelerate Innovation Empower Product Managers To Maintain Business, AD&D, And Customer Alignment Through VSM Draw Alignment Between Accelerated Innovation and Business Goals To Get Leadership Onboard
- 50. FORRESTER.COM Thank you © 2019FORRESTER. REPRODUCTION PROHIBITED. Diego Lo Giudice dlogiudice@forrester.com Twitter: @dlogiudice
- 51. © 2019 TasktopTechnologies Incorporated.
Editor's Notes
- #4 Visit the PowerPoint resources page Backstage for quick tips and slide layout solutions for your presentations.
- #6 rob Compare 2 years from now 2016 to “now” 2018… caution and realism
- #7 First, let’s start with the sorry state of digital transformation. These findings from a custom survey Ted Schadler conducted early this year, I think, echo Max’s remarks yesterday. Digital transformation is hard, in part because we still have a lot to learn about what it is, never mind how to accomplish it.
- #8 The core supports 100s of your business processes that run your business operations: Your CRM is part of Core Your systems to manage Employees – HR, Rectruiting Finance systems for accunt planning ERP And depending which industry you are in, for example Retail will be inventory management and shipping, Airline crew management, maintenance and operations… 1 Min
- #9 So one of the key reasons is Digital experiences that break down for the customer, destroying the journey, create digital illusion!! we think we ‘ve got cool apps running and they might look cool, perhaps no so differentiating as Pascal showed earlier, but unfortunately there is still something that’s not giving great full experience to clients, or partners, because something in the invisible is not working…. 30 sec
- #10 Even Unicorns can have problems with the core !, It took my friend Rob (analyst) 5 days of tweeting this image you can see to Ellon Musk directly, once he found out through the insurance and the repair shop close to his house that Tesla’s management of glass inventory management was broken or inexistent. Now Tesla has a wonderful applications for customers to customize their cars and update with new sw to get new functionalities, but it looks like a broken glass replacement inventory management process. Tesla was forced to send a manager to the factory in Fremont California (my friend lives close to san Francisco), pick up a glass and manually drive it to the closest repair shop to get this fixed. 1.5 min
- #11 Other examples? Bank Mobile app,super functional, but when I tried buying on the wen a train ticket, payment was not going through because my two step identifanction on the cool mobile app was not gettting through…. You get the point….Your cx relies on those backends ! 1 min
- #12 Amazon has connected, biz, architecture, org How much amazon is affecting retail. This community is starting to change things: Target (all time high), Walmart, Nordstrom, BestBuy. Retailers got hit early. Consider the retail market from 2006-2016. Amazon, a software product innovator, is decimating other retailers. Last week Sears declared bankruptcy. And it has used it’s growth in retail to fund a software product delivery platform that it can now use to move into almost any market of it’s choosing. Signs of hope with some like Target have taken a software product-oriented approach. Their stock price has improved in the past couple of years. But this is a big change. ------------------------------ Or if we “zoom out” of our current careers, have we seen something like this before? Jim: playing a different game, vs. others which is what the revenue they are giving back / dividends. Retail is a small component. Last 3 years, HomeDepot higher, Nordstorm, target, Costco, positive growth. Ones who have embraced digital showing some signs. Embraced omni channel. Sears went into bankruptcy protection this week Some companies have mastered digital, others haven’t If this happens in every segment, in every industry, not a good thing Target has recently gone up, so glimmers of hope Realized at my first DOES that this community is part of the answer https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwj0vaqShMbdAhUBEZAKHcCNAM4Qjxx6BAgBEAI&url=http%3A%2F%2Fwww.elpasotimes.com%2Fstory%2Fmoney%2Fbusiness%2F2016%2F03%2F28%2Felpaso-blockbuster-dvd-rentals-stores-closure-entertainment-small-business-retail%2F82350636%2F&psig=AOvVaw3YY7uKxJV3h5NSe5cLApHE&ust=1537410909560353
- #14 So what do we mean by core?
- #15 So what are some of the problems our cores have ? Static and inflexible: But a lot of processes rely on them Unreacheable Indispensable data: Data in core systems is needed to support new customer experiences Growing technical debt drains technology budgets: Core is expensive to maintain – despite digital, we are still spending over 60% of budgets to maintain the systems. It’s like having a financial debt, the more the debt stays there, the more interest rates you pay, why? Because it impacts every change you need to make which takes longer to make every time ! 1.5 min
- #16 Siloed teams with limited collaboration, large batch release forced by siloed core architectures – and still a total misunderstanding by doing the bare minimum of what true Agile would require – or even worse defining Agile as bunch of prescribed process rather than creating a new DNA of values and principles gets Agile stuck too. 30 sec
- #17 And while on the systems of engagement we are breaking teams up in smaller teams that iteratively work in sprints that can deliver faster and smaller batches and MvPs, the core delivery process for Core is still waterfall, with complex and large batch releases – and multi-year projects. You’ve been badly advised by analysts (the wrong analysts) to split your IT in two worlds: one that innovates goes fast, and one which doesnt and goes slow – and if you are unlucky and end up in the slow non innovation world, you definitively are not going to have a great EX which in turn is proven to provide a bad CX too 2 min
- #18 We are going to start with some stories … Overall time it took to deliver a feature from an idea to a customer using it was 120 days. Immediate reaction was “we need more developers” … but when they dug into the details – only 2.5% of that time was development time. Finished features were sitting waiting to be deployed for sometimes up to 90 days. “This is evidenced by this flow metric…”
- #19 Ability to deliver anything – features, defects, tech debt work, security risk work has been slowing at a steady (and rapid) rate. Why? We started digging into why this was and discovered that a reorg that was implemented last year and was great in theory turned out to have a critical missing piece …. The reorg would have been fine as long as the Spotify model of being able to commit on any area of the code (with constraints) had been rolled out at the same time. But it wasn’t and so now the teams have dependencies that they cannot resolve themselves … and so the ability to deliver anything is much slowed
- #20 This is Barclays analysis of their 18 month cycle for an idea, and how optimizing Agile alone is inefficient, if that’s not their bottleneck.
- #21 So what do we mean by core?
- #22 So we said that the core problems slow us down in building new features of making changes, well here are some numbers that show that despite the focus on Agile and in the last few years on DevOps, 20% of orgs can release apps monthly, and only 9% more frequently than monthly… 30 sec
- #23 And what is worse…. Is there since 2014 – so in 4.5 years of DevOps speaking, not much has a improved. But what else is impeding… 10 sec
- #25 So what do we mean by core?
- #26 They introduce value streams, people process and technology to implement complete customer journeys: 1. Connecting dots between back and front through an API layer 2. That might mean some re-write, buy new packages, move to cloud 3. Brining more agility in the front and in the back. 1 min
- #27 Moving to cloud is a big enabling factor for gaining more flexibility and realizing the decoupling and decomposition needed on the backend. 30 sec
- #29 Agile has made strides to improve things… but it is not enough DevOps has made strides to improve things … but it is not enough In particular for this audience I want to re point out the story I already told – lots of focus on CI/CD – and of course that is critical … but ….it’s not enough
- #31 The flow framework is dedicated to no longer having to rely on anecdotes and gut feel – a prescriptive approach that can address all areas of where and how software is created, built and delivered.
- #32 So what do we mean by core?
- #35 Create new business models with technology at the foundation. Make digital business platforms the core architecture of business. Treat technology as a business asset. Let new technology guide your business strategy.
- #37 Truth be told … I wish I could stop here and everyone could go home and start getting their flow metrics tomorrow … but sadly I can’t – and that is why the rest of the flow framework is so important.
- #38 S3: Everything slowing down because of the reorg SLOW THROUGHPUT
- #39 S1: Speed to Joy was 120 days – too long! LONG LEAD TIMES
- #40 So what do we mean by core?
- #41 But for Agile at scale to work, you really need to also align team, work and architecture structure – to enable autonomy and decrease dependency that lock flexibility and autonomy. And what makes this possible is focuss on small: small teams (squads, scrums), work structure (small batches), API-Microservices arachitectures… This is the secret sauce to scaling Agile and enabling fluiditity and flexibility. 1.5 min
- #43 VSM Can helps teams better realize the value of agile processes Can better visualize the cost of antiquated processes Visibility into processes can help build trust
- #47 Another way of thinking of it … Live in the house while you’re remodeling it. << DO MORE EXPLAINING OF WHAT MODELING IS >>