There is an increasing disconnect between software organisations’ priorities and business leaders’ objectives.
A recent report by Forrester outlines that rampant siloing between “Application Development and Delivery” (AD&D) and business leaders is resulting in misunderstandings and wasted business value potential. Addressing this issue requires increased strategic collaboration between AD&D teams and businesses. In this way, they can develop improved approaches and management tools that leverage user data to deliver quality products and services.
Where the problem comes from
The root of this problem stems from traditional business strategies with regard to technology, where the IT strategy occupies a support role in value generation. In our pre-digital transformation world, when both competitors and customers were ‘stable and predictable’, this approach was highly effective. However, with disruptive players entering the market and customers expecting an omnichannel service as a minimum, it now falls flat and can even threaten business survival.
As for the AD&D teams, they have the unenviable responsibility of delivering a wholly omnichannel service that offers a cohesive experience across multiple touchpoints – without having a clear view of the business’s objectives. Not having this overview means they often get distracted, which can be traced back to four causes:
1. Cost vs. Value
Based on the traditional view of technology funding, the objective of software development is to maximise savings and efficiency with little regard for the value of each software. If a business focuses solely on the cost of building an application, they can quite easily create a whole host of them. But this focus on quantity often serves little purpose other than to drain the software team’s time and resources on maintenance, without delivering results.
2. Agile development vs. fixed budget practices
Understandably, business leaders want predictable return on their investments before they green-light any project. Yet this clashes with newer, agile practices that focus on iterations and gradual improvements to maximise value over time. Although this approach is highly effective in the long run, it requires a constant stream of funding, which business leaders are often unwilling to provide.
3. Random feature prioritisation
According to Pendo.io’s feature adoption report, companies spent $29.5 billion in 2018 on software features that are rarely or never used. Furthermore, 80% of average daily app usage was linked to 12% of features. This happens because AD&D teams are driving to their destination without any map. Without the guidance of data, it’s nothing but a game of chance.
4. Delivery metrics vs. the big picture
As we mentioned in point one, a company can easily achieve impressive delivery metrics. But this number does not equate to the software’s value; it’s the age-old problem of prioritising quantity over quality. If it doesn’t improve the customer experience, it simply doesn’t matter how many features are added or bugs repaired.
Understanding your stakeholders needs
The first step in correcting this failure is to take stock of your different stakeholders, who are undoubtedly using different metrics to define value. As the Forrester report says, ‘AD&D teams should capture metrics that foster balance across business value, software quality, progress, and efficiency to measure and translate AD&D performance into metrics your stakeholders understand.’
For prospective investors in public companies, the metrics that indicate financial value are most important, and AD&D teams should keep this at the forefront of their thinking. A great example of this comes from the aviation sector. United Airlines measured the incremental value of their up-selling features, while Ryanair measured the activity of their app to raise prices for certain routes. It can also be seen in e-commerce companies, where they focused on monitoring abandoned online shopping carts and web traffic metrics.
Beyond outside investors, AD&D teams’ approach could always keep customers front and centre as they are the most important part of a business.
”The Forrester report identifies ’four types of customer value: economic, functional, experiential and symbolic value.’
Monitoring customer behavior helps AD&D teams understand where websites are highly trafficked and then can deliver functional enhancements to areas that are used more frequently
Making the metrics work for you
So delivery metrics are not necessarily the optimal area to focus on. But what metrics should take pride of place to better gauge business value?
The Forrester report states,
”‘Teams that successfully connect software effort with business value start by incorporating elements of product management into the AD&D team.’
In short, this means that there is no one metric. No easy answer. Instead, businesses and AD&D teams must develop metrics and KPIs that complement one another to improve business value.
To achieve this, a good approach for AD&D teams involves monitoring and removing experiences or capabilities that customers are not using, in turn building products that deliver desired features and higher value. They should ‘use objectives and key results (OKRs) to create cross-discipline team accountability.’ The strong focus on business value will come full circle when teams use it as a metric to measure software expectations.
In an undeniably data-driven world, customers expect next-level service. If AD&D teams focus on outcomes and receive the support and broader perspectives of business leaders, they will be able to deliver software that impacts business value. A product-centric approach, the proper management tools and experimentation with real users are key to success in development and customer experience.
With 15 years’ experience as CRM consultants and as a team of highly skilled software engineers, we at redk support companies looking to enhance efficiency and profitability through world-class technology tools that optimise performance, with a focus on impacting positively on the bottom line.