Time-to-market is a critical consideration for software developers and IT teams looking to roll out new technology products, services and platforms. Especially in the digital age, where markets are so much more fluid and fast-paced than they once were. It is increasingly important for businesses to capitalize on strong, innovative ideas quickly with rapid roll-outs and efficient production.
The longer it takes to get from concept to product, the more likely it is that a competitor will jump in first and steal an edge over you.
For big businesses, however, this increased focus on rapid development has posed a challenge. In terms of organization and structure, large enterprises are not necessarily set up with agility in mind. Whether the project is to develop a new customer-facing web or mobile app, or to engineer new internal IT systems, there are a lot of stakeholders to include and consult, a lot of due processes to follow, a lot of complexity to navigate in terms of operational and technological infrastructure.
There are cultural obstacles, too. Established companies will often have approached development in the same fixed, linear fashion for decades, starting with a business plan and pitching it for approval and backing (especially financial) before you even start on the actual project. The planning phase can take as long as the actual development. Even in software, the field where agile methodologies were first formulated and found favor, resistance has been frequently encountered in large companies. One study from New Zealand found that attempts by big software conglomerates to adopt agile practices were met with:
“General organizational resistance to change, lack of user/customer availability, pre-existing rigid frameworks, not enough personnel with agile experience, concerns about loss of management control, concerns about lack of upfront planning, insufficient management support, concerns about the ability to scale agile, need for development team support, and the perceived time and cost to make the transition.”
Over the past decade, however, things have started to change. Buffeted by increased digital disruption on a global scale, often spearheaded by innovative and nimble tech ‘unicorns’ that grow at astonishing rates on the back of highly agile business models, larger incumbent enterprises have started to change their point of view on development and production cycles. In many cases, it is a change driven by necessity – if everyone else is responding to changing market dynamics with frequent innovation and rapid product iterations, you risk being left behind if you don’t follow suit.
The Lean Influence
In 2011, entrepreneur Eric Ries published the book The Lean Start-Up, a piece of work he intended to serve as a handbook for other entrepreneurs drawing on his experiences with agile software development and lean manufacturing techniques. Central to Ries’s theories is the idea that start-up businesses cannot afford the lengthy and costly development cycles that large companies habitually employ. With neither the time nor the resources available to soak up failure after a long development, successful start-ups work in a different way. They get a version of the product out quickly (the now-famous Minimal Viable Product, or MVP), they get real feedback out in the field from real customers, they adjust the product according to what they learn, or else ‘pivot’ quickly away to another idea before they have wasted too much time and money on a non-starter.
What surprised even Ries initially was that it wasn’t just entrepreneurs who were attracted to his work. Big businesses, too, especially R&D and IT teams, began to take a great deal of interest in a methodology which, at its core, is about reducing time-to-market in development.
The key to understanding why lean and agile methodologies have become so attractive to big business is recognising how market conditions have changed. By contrast, as a consequence of globalization and other factors, a company nowadays can expect its very best ideas to face multiple competitors in the marketplace by the time they get to launch. Speed has become essential, and Ries argues that management systems have to change if large organizations are to respond effectively.
Another key reason why enterprises have started to embrace rapid, agile development is digitalization. Like Ries, McKinsey argues that getting the most from digital transformation requires companies of all sizes to embrace new approaches to managing change and development.
Writing in the Harvard Business Review, Steve Blank, a mentor and colleague of Ries’s, said that a critical difference between traditional and lean development approaches is that established companies tend to execute prefabricated strategies, whereas start-ups are more focused on finding a viable model or solution. The latter approach is more efficient because it minimises the risk of creating a product that no one wants, by listening carefully to what the market wants in the first place. By cutting out the long-winded guesswork involved in writing business plans, you get to market quicker, and by getting to market quicker, you make a better product. The hub of this cycle is innovation, the continuous spinning of the wheel which ensures product and market are in sync.
The Lean Start-up Cycle. Source:
Efficiency, speed, innovation: lean, agile, continuous improvement. It all ties together in a different way of thinking about development, one that matches the speed of the marketplaces businesses are now operating in.
Organisational Efficiency and Slimmed-Down Development Cycles
So how exactly are enterprises slashing development times in order to keep a step ahead of the competition and create solutions that genuinely respond to market demand or real-life business need?
For large businesses, perhaps the key shift has been in the organizational structures placed around development, particularly with regards to the relationship between IT teams, business units and customers. In the past, these were set up on very linear lines, with business teams conducting initial user/customer research, passing on feedback to IT leaders, who then went away and worked on the coding, more or less in isolation.
The lean/agile approach requires business units and product owners to take more of a co-development role in direct partnership with IT, sharing information on an on-going basis through a series of iterative cycles. This change in alignment towards closer collaboration is required to support the customer-focused development that agile methodologies demand, to allow the free flow of information from real users/customers ‘out in the wild’ back to development teams which allows them to efficiently test, adjust and re-test hypotheses until they get the product right.
Organizational efficiency can pose a major obstacle to large organizations implementing lean and agile development practices. On one project Aspire was asked to consult on, we encountered a highly heterogeneous IT environment made up of multiple legacy and third party applications, with a lack of integration negatively impacting on time-to-market for new products as well as on the overall customer experience. We streamlined operations as they related to development by implementing an Integration Test Strategy to reduce the time it took for products to go through testing one after another with a series of different business units, which was accompanied by a training and education programme to support the shift in culture this would represent. We were able to help the client achieve a 50% reduction in time-to-market for new services while operational costs were reduced by 25% thanks to a combination of more streamlined processes and automation.
Finally, one other example of the way that enterprises are changing structure to make development leaner and faster is the use of innovation labs. Eric Ries states clearly that he believes the traditional claim in business that ‘everyone should be responsible for innovation’ is a mistake. He argues that innovation should be treated as an area of defined responsibility, just like having a team responsible for UX on a website, or for back-end security on apps, or for transaction platforms. A lean enterprise, he argues, is built in a modular fashion, with small, agile teams given clear areas of responsibility and linked together to promote efficient information exchange and workflows. Innovation needs to be given a defined place within this structure like any other function. Development labs are one way to achieve this.
Large banks have been particularly enthusiastic about embracing the innovation lab model as they try to pivot away from traditional banking structures to embrace fintech and online financial services. Banks are creating innovation labs referred to as “start-up incubator hubs” not only for driving rapid, creative tech development within their own organizations, but nurturing next-gen solutions for the industry as a whole through partnerships with other fintech players.
Eric Ries’s ideas were aimed at making product launches less expensive and risky for start-ups by simultaneously shortening development cycles and ensuring the product was something people actually wanted to buy. But coupled with a range of other factors that include the rapid acceleration of digitalization and increased market competition, the core principles Ries wrote about have come to be taken very seriously in the world of enterprise software development.
Even for the very largest organizations, the faster you can get a website, application or digital product up and running and available on the market, the sooner you can gain the benefits from it, whether that be efficiency gains within your own operations, a better customer experience or grabbing market share with sales of a new product. Beyond reducing time to market in development, the lean, agile approach forces large businesses to adapt and streamline how they are organized to maximize efficiency, reducing costs, increasing output and promoting the value of innovation and continuous improvement. Finally, it delivers a better customer experience by making development responsive to demand and real-life use cases.