From a Built to Last past to a Built to Change future
Today in my keynote at CA World 2016 I talked about the future of enterprise software and the emergence of a new kind of company that’s built to change.
Software has moved from a supporting role to a central enabler of the modern business. It drives revenue and delivers value at scale. Before the application economy took hold, businesses might take two years to develop a product that has a five-year lifespan. Today, that five-year lifespan may only be two.
Innovation must happen faster, with fewer resources. Despite the challenges, there’s no better place to be than the software industry.
Digital disruption is unleashing new business models
At CA, we’ve just started talking with Domino’s and we love their story. Over the past few years, Domino’s has embedded technology into its business model. Now 50 percent of sales come through their online platforms. A voice-ordering app allows customers to follow their pizza from oven to doorstep. Customers can order food from a smartphone, a smart watch, a smart TV or even a smart car. They are also testing autonomous delivery vehicles and drones.
It makes Domino’s a tech company, not a food company. And it’s working. Domino’s has posted year-over-year growth and market share since 2010. If you bought $1,000 worth of shares in Domino’s in 2008, they would be worth about $50,000 now. Pretty good for what was once just a pizza company.
Throughout the global economy, it’s not just the digital darlings — but long-time leading companies — who are facing industry disruption head-on and reinventing themselves digitally.
Why modern companies are Built to Change
Disruptions are coming to every industry. If you want to build a company that’s built to last, you better build it to change.
Modern companies aggressively renew themselves to add value and avoid commoditization. A Built to Change company is fearless. It embraces creative destruction inside the organization and even encourages it. And it doesn’t spend much time thinking about its competitors. Instead, it works to understand markets, find the underserved white spaces and invent ways to serve customers better.
These modern companies get up and running quickly. By saving time and capital, they can focus squarely on delivering products and experiences their customers want.
Their management is different, too. Teams are celebrated, not the individual. The vibe is collaborative and non-hierarchical. All these companies have eliminated traditional performance reviews. Even GE who made stack ranking popular back in the 80s, is today assessing its 300,000 employees by their experimentation and risk-taking abilities.
A truly agile, Built to Change company puts the customer at the center of everything it does. It innovates and executes at high velocity. And it must continuously improve.
Developing an agility advantage
The speed at which a company can perceive and respond to change is only limited by one thing: the ability of software to allow it to sense and react. In other words, to succeed companies need to develop an “agility advantage.”
And it’s not just the software: it’s how you build and deliver superior customer experiences and how you integrate those new experiences into the very core of how your business operates. You are expected to deliver live, fully integrated, always-on software services. Yearly release cycles are history. Continuous delivery and improvement are table stakes.
Technology now serves as the primary interface between your business and your customers. These customers could be experiencing your company through apps, or they could be industrial customers exchanging huge amounts of data with you. In either case, digital engagement and customer interaction with your business, at any time, at any place and on any device has become a basic expectation.
Regardless of your industry sector or product, every company’s brand will be represented, communicated and judged through technology. Software is the essential customer-facing engine for sensing and responding to new needs, threats and opportunities.
A technology leader’s new role
Technology leaders are now at the center of a company’s future. They will increasingly be called upon to help companies evaluate, source and implement emerging technologies like containers, microservices and data analytics. As applications increasingly define brand, delivering software that powers new experiences becomes the main output.
Those of us in the thick of this software revolution know what we have to do. We have to rethink our cultures, processes, tools and methodologies. We must reprioritize and re-architect software development to achieve the shortest and fastest path to results that matter. And we must make room for innovation, fostering new ideas and delivering unique value to our customers.
Entering the next era with our customers
We’ve aligned our portfolio for the modern software-factory requirements. CA is organized around four key pillars, cutting across heterogeneous environments: Agile, DevOps, Security and Mainframe. Think of them as core capabilities needed to move an organization into the future.
Here at CA, we’re on the same path as our customers harnessing technology investments to produce the best results. We are entering the next era where software becomes more innovative and important than ever before.
We are Built to Change.