Continuous Disruption - When digital transformation is no longer optional

Most industry-leading companies will disappear over the next few decades. For some organizations, it will take years to become irrelevant but for others, the threat is just around the corner. COVID-19 is already accelerating this trend. Consider these facts:

·       Over the past 20 years, more than half of Fortune 500 companies are no longer on the list.

·       Between 1957 and 1997, the average tenure of S&P-500 companies decreased by 40%, from 33 years to just 20 years.

·       By 2026, the average tenure of S&P companies is expected to drop by more than half from today’s measurement, to just 14 years.

What’s behind this change? Speed of innovation coupled with emerging IT capabilities and thinking-out-of-the-box problem-solving. Industry disruptors like Netflix, Uber, Airbnb — and others aspiring to join the unicorn league — are dramatically accelerating traditional growth models with groundbreaking solutions driven by software innovation and efficient development processes. Over time, they may evolve into serial disruptors like Amazon, Google, and Apple — who never stop pushing the boundaries of what’s possible.

To survive, today’s organizations must proactively focus on disrupting their markets by continuously developing transformative solutions using rapid, DevOps approaches. If they take a reactive approach, and wait to develop new solutions based on competitive surges, it will be too late.   

When Did Traditional Become Inadequate?

In a 2011, tech investor Marc Andreessen recognized a software driven business trend. In a Wall Street Journal article, he summed it up stating, “Software is eating the world.” In reality, it was people who were getting a taste of software-fueled services — and that taste has turned into an insatiable appetite for new services. At that time, a small company, Uber, which was about a year old, was driving rapid growth and expanding outside the Bay area with just minimal funding and a scalable software platform that supported a new business model. Fast forward a few years, and we all witnessed how ride sharing companies transformed public transportation.

The media industry — which was monopolized by a handful of companies for decades — has undergone a similar transformation. In a short time, we’ve witnessed the rise and fall of video stores, and the emergence of online streaming services. Behind all this change are software innovations from startups that reinvent what’s possible using technologies such as streaming services and more recently virtual and augmented reality.

Keeping up with Increasing Appetites

Fast-paced software innovation is a game changer because it provides the means for new challengers and existing serial disruptors to penetrate any number of markets quicker than ever-before possible. However, companies need more than software to succeed. They also need shorter development cycles.

Traditionally, IT organizations had some flexibility in balancing cost, quality, and time-to-market. However, with software-driven disruptions lurking, time and quality are no longer flexible. The windows between market-changing innovations are so narrow that long-term domination requires continuous disruption via quality solutions.  

But how can IT organizations enable ongoing disruption? Successful, fast-growing companies can consistently perform and still disrupt their markets at the same time. They have the discipline to deliver on their near-term commitments, sustaining customer acquisition and revenue growth as well as the agility needed to quickly seize new opportunities. They deliver market expectations while they create new routes to market and innovation, often across multiple domains.

Today’s disruptive software organizations are demonstrating that parallel execution, innovation, and ongoing growth are possible. Not only can they deliver quality software at a rapid pace but also, they do so while incurring reasonable costs in a consistent, continuous manner.

How is Continuous Disruption Achievable?

Implementing and adopting a set of best practices across the DevOps cycle can quickly turn an organization into a continuous disruption enabler. There are a number of best practices that leading disruptors adhere to:

1.      Build Granular Business Services

An accelerated pace of innovation requires the reuse of stable, reliable software components. Most applications are not developed from scratch but instead leverage libraries, frameworks, code components, and previously developed applications wherever possible. To streamline consumption of basic building-block business services, enterprise backend services should strive to deliver the most granular business functionality, often down to a single function or microservice.

Adding broader functionality to existing applications is often all that’s needed to shorten time to market of transformative solutions.  New software services — including microservices, mini services, and wider bundles of business functionality — enable better utilization and monetization of data as well as digital assets that support new opportunities over diverse routes.

Success depends on whether the new software components have clear interfaces that are built for reusability and easy testing, consumption, scale, and replacement. That way, the organization can quickly pivot and use more effective code to meet changing requirements and goals, without impacting the consumer applications. 

2.      Design APIs First

 APIs drive faster innovation internally and via partnerships — and these new cross-functional channels and applications are a force multiplier for generating market disruptions. That’s because exposing data and services internally and publicly via well-documented and secure APIs drives faster utilization of an organization’s data, software, and business services. This is critical because complete, green-field enterprise application solutions are rare and organizations seek to leverage their valuable data. Data assets are often what facilitates the insights needed to uncover new market and solution routes that break into new industries.

Solid APIs also encourage external developers to engage an organization’s intrinsic assets and drive new partnerships, widening its access to innovative resources. Services’ APIs mask implementation details including programming languages, frameworks, and development technologies, making them easy to consume and integrate. Fintech innovators, for example, will prefer working with financial service providers that adopt Open Banking and provide secured access to transactions and account services. Travel and hospitality aggregators will find and use services from vendors that provide destination and reservation data via APIs. Even an individual farmer looking to increase productivity can now opt for agriculture equipment that collects and sends real-time field data to experts, who in turn recommend certain seeds or fertilizer to optimize yields.        

3.      Elastic Automated Infrastructure

 Elasticity and automation of the physical infrastructure is necessary to effectively run, manage, and scale the services and backend data layers that business applications require. Cloud adoption — whether public, private, or hybrid — is one way to achieve the required elasticity. Companies chose their cloud strategy based on the financial implications, skills, and vendor-lock considerations. However, a cloud’s automation principals are fundamental because they free DevOps teams from dealing with infrastructure provisioning and maintenance. The use of virtualization and containerization are also strategic because they enable automation as well as consistency. All infrastructure components must therefore be provisioned in scripted and completely automated workflows. That way, new environments can be rapidly deployed while existing environments expand, without interrupting business services or causing delays.

 4.      Continuous Delivery

 Automating build and test processes is essential for releasing quality software at a fast pace. In a competitive digital market, quality cannot be compromised. Throwing more resources at improving quality typically results in further time loss. A mature continuous integration and continuous delivery environment (CI/CD) provides the automation needed to build applications in a consistent way, while ensuring excellent quality-validation in every release-cycle phase. So, in addition to having disciplined developers who can rapidly develop code, an effective CI/CD process allows for extensive testing using multiple techniques including unit testing, static code analysis, plus functional, performance, and stress testing. 

While continuous delivery offers the ultimate agility and fastest time to market, it does not imply continuous software releases. Some companies will indeed opt for a continuous deployment approach. However, having effective continuous delivery workflows means that a company can release software at will. Having full control over the release process gives IT organizations the flexibility to introduce new functionality, fix defects, and address security issues as their business demands. Serial disruptors typically follow Agile development methodologies and continuous delivery practices. They deploy mature automated build, test, and release workflows with a high degree of test-automation coverage at the pace that aligns with their goals.

 5.      Visibility and Analytics  

 To effectively manage and expand business services, organizations need visibility into code execution and environment behavior across application lifecycles. On average, developers spend 30% of their time finding and resolving problems. To recoup this valuable time, developers need to be able to detect, isolate, and identify the root cause of issues faster. They can do this by using homegrown techniques, best-breed open source and commercial solutions, or a combination of tools and techniques. Regardless of the approach taken, it’s critical that development and IT teams have visibility into every component involved in every transaction managed by applications and infrastructure. The inability to detect and fix problems quickly diminishes the effectiveness of CI/CD processes, and in turn, reduces quality and slows time to market.

IT leaders do not always have the power to change their company’s culture. However, they can spearhead and accommodate the delivery of disruptive solutions whenever opportunities are pinpointed. Because IT leaders understand software and what is possible using technology, it is their responsibility to provide highly flexible and scalable infrastructures that support today’s and tomorrow’s initiatives. By instilling efficient and economical best practices, organizations can build a vehicle for continuous disruption, which they will need to compete in today’s hungry, software-driven economy.