The Modern Software Factory: What it is and why you need one

Today at CA World 2016 I talked about why the modern company needs a software factory – one that is capable of turning ideas into new customer experiences.

Digital disruption. Compressed innovation cycles. New forms of competition. Rising customer expectations. Increasing cost pressures. Today’s enterprises are facing unprecedented challenges and they have less time than ever to incubate new ideas, nurture innovation and deliver compelling solutions to customers.

In his Tuesday keynote, CEO Mike Gregoire outlined a profoundly different kind of company from those of the past; one that is built to last because it is built to change.

This modern company doesn’t rely on backroom strategy, but 24/7 contact with its customers to find new ways to compete. Internally and externally, it removes friction on every level. And, it is focused on outcomes, not process; practicing agile development and lean investment principles.

Most importantly, the modern company is powered by software. It’s new mission? To better understand its customers through the software experiences it builds. There are three main drivers pushing every organization to develop this new muscle and flexibility.

1. The boundaries between the enterprise and the outside world are tumbling down.

Old models were based on the economic advantage that came from separating your enterprise from the outside world. Inside the enterprise, you had some control over your cost structure and your culture.

Technology has changed all that. Take rogue IT — your employees are using outside technologies because they can’t wait for you to build it. The old investment math is failing; the rogue apps are often free.

Social media is another example. Today smart companies are leveraging their employees’ social networks to drive business.

2. Changing notions of identity and human existence.

Ubiquitous connectivity is rising, and there are constant advances in augmented and virtual reality, voice and sensor-based interaction and user-centric design. These experiences produce a constant stream of highly granular data about who you are and what you are experiencing and feeling at every moment.

As more data gets collected we will increasingly be defined by our data sets. If you’re on Facebook, you actually have an identity that exists independently of you and will probably live on after you’re gone. That means that who you are can be externalized, shared or even stolen.

Why does that matter to your business? Because all this data about your customers can be used to better serve them. Those who can transform data into insights and understanding will be champions in the digital economy.

3. The very nature of how we make decisions is changing.

The human brain is hard-wired to detect patterns and learn from them. But it is not at all useful for mining exabytes of data to understand why you’re not connecting with your customers through your new app.

Cognitive computing and deep learning are only in their infancy. Is it interesting that a computer can beat a chess master? Maybe. But now, fast-forward to saying goodbye to your robot as it goes off to work for you. Now that’s interesting!

Analytics and AI are going to change everything we know about our world and ourselves. But before they do that, they’re going to change your business.

Why you need a Modern Software Factory

The explosion of internet-connected devices demands an entirely different take on software. Today, software’s greatest potential rests in creating a live, direct connection with customers through digital channels. Unleashing that potential requires an outward focus.

To deliver superior customer experiences at unprecedented speed and scale, you need entirely different skills and tools. You also need a very different kind of process.

The five principles of the Modern Software Factory

The Modern Software Factory gives you the ability to rapidly build and deliver software experiences. The principles of this factory all lead to one thing: delivering continuously improving, customer-focused innovation.

Agile – To rapidly realize value with minimal overhead, you need to change how you build software. You need highly adaptable, customer-centric methodologies. Long release cycles and heavyweight, rigid Waterfall approaches will not deliver the velocity you need to thrive. With CA’s Agile Central you get the leading tool to support your agile development.

Experiences – The Modern Software Factory doesn’t just deliver software – it delivers experiences. Producing a continuously evolving user experience at speed and scale is vastly different than managing business-application upgrades once or twice a year. You need seamless collaboration between building and operating your software experiences. You need to break down functional silos and drive approaches like DevOps across your new factory.

Automation – Speed matters. To deliver innovation at speed, your new factory must be highly automated. Why? Because automation reduces errors in manual processes and frees up critical resources to focus on what really counts: creating customer value.

Security – To realize a friction-free world, you need security that operates in the background where it enhances trust and the user experience. Think of behavior analytics used in fraud and threat detection. A ton of analytics and machine learning is happening in the background so that your customer isn’t slowed down by cumbersome security checks.

Insights – Your business runs on insights, so you need feedback loops throughout the software value chain. This has two parts. You need to be on top of how your software factory is operating. And you need to know if your experiences are hitting the mark with customers. This two-way digital connection allows you to uncover unmet needs that can be turned into new business opportunities.

Stick to these five core principles, and you’ll create a Modern Software Factory with the agility, velocity and insights you need to grow your business – all through software.

Building innovation into the operating model

You need to do more than efficiently build and deliver new experiences; you also have to create them. And innovation doesn’t happen by itself. It needs to be designed and built into your operating model. That’s exactly what we’ve done with the CA Accelerator.

Innovation is the process of turning raw ideas into real-world solutions at maximum velocity. Doing that repeatedly requires a deep understanding of how ideation works in your company. The CA Accelerator gives us that learning. It keeps our innovation pipeline full and teaches us how we can nurture that next new idea.

It’s a rigorous program with a simple engagement model to fill our idea pipeline. We use Lean Startup best practices to validate and grow new businesses. But, if we aren’t building things that our customers truly value, we make room for other ideas. (It’s the software version of tough love).

Our approach is democratic; these ideas come from all over our organization. Just fill out a one-page Lean Canvas and it goes into the evaluation pipeline. We’re already seeing results, check out these video examples.

What’s next?

If this doesn’t look like traditional IT, it’s because IT itself is being completely redefined. In fact, the new IT will be no IT. IT will not go away, it’s actually the opposite. Technology and business are becoming one. That means the pressure to innovate and achieve velocity is only going to intensify.

Otto Berkes
Otto Berkes is the Chief Technology Officer at CA Technologies. He is responsible for technical…


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