By Jeff Smith, CIO, IBM
Some of today’s most successful businesses – such as Twitter, PayPal, LinkedIn, Skype and WhatsApp -- began life as start-ups. They succeeded in creating value. They were also able to disrupt the leaders of each of their industries or fundamentally transform the way those industries operate.
The lesson for established businesses is stark. Letting more agile entrants -- start-ups or otherwise -- gain a foothold in an industry could be suicide for a business. Yet the only way to stay ahead of disruptive change is to embrace it. To "out-compete" smaller, more agile businesses, companies need to adopt similar strategies. And, they cannot be afraid to fail.
Companies don’t have perfect insight about what users want, so knowledge is less important than an ability to learn quickly and evolve offerings based on how users react. Iteration is the most important part of the strategy, combined with the ability to analyze feedback and make better decisions, executed in a blameless culture. It's about agility.
Most start-ups have adopted such principles, which has resulted in the popularity of DevOps: a transformation of culture, processes and technology designed to collapse barriers between developers and business leaders. By accelerating collaboration across small, self-directed teams, DevOps enables companies to build, create and market products at a rapid pace. In turn, these nimble market challengers can better experiment with disruptive innovations, particularly in the rapidly evolving areas of cloud, big data and analytics, mobile and social computing. At the same time, the DevOps approach allows companies to continuously assess customer feedback to align those innovations with demand.
DevOps and "open by design" cloud offerings will be discussed today and tomorrow at DockerCon in San Francisco. Docker is an open platform for developers that is supported by my company and others.
Adopting DevOps is generally thought to be easier for a start-up than for more established businesses. Startups, if they have an abundance of talent, can design their operations around innovation as quickly as possible from day one.
Larger organizations, however, with established processes, may consider DevOps “too hard,” and prefer to focus on making incremental improvements, rather than disruptive, game-changing initiatives.
Yet large organizations are successfully adopting a DevOps approach. Nationwide Mutual Insurance is a Fortune 100 company established more than 80 years ago. According to Steve Farley, Vice President of Nationwide’s Application Development Center, the company’s DevOps approach “allows us to be more agile as a business and more responsive to our customers.”
Since adopting this approach, Nationwide has achieved a 90 percent on-time software delivery rate (up from 60 percent previously) and a 70 percent increase in users’ system availability. But what’s truly impressive is that, in concert with the increased pace of software delivery, Nationwide reduced critical defects 80 percent and high-level defects by 86 percent, which means the company is delivering higher-quality software faster. Nationwide says it can now “invest more into playing offense” to help the company drive innovation and build new offerings.
In a survey of 600 executives with software delivery responsibilities in Europe and North America, Forrester Consulting found that only about one-third of teams were able to consistently deliver software within one to three weeks. Yet the fastest of these teams were also the ones that achieved the highest business satisfaction scores for their performance, which suggests their high speed was achieved without sacrificing quality.
The most important benefit of DevOps is its ability to drive innovation at scale. The pace of business requires faster software delivery. Instead of taking months to develop and release a new capability, the target should be to introduce innovations in weeks although some businesses demand innovation daily.
No longer do businesses have the luxury of "tweaking" their way towards sustained innovation. They need to reinvent themselves to stay relevant, particularly in the way they deliver software, which is increasingly the lifeblood of market differentiation and innovation.
Jeff Smith is the CIO of IBM.
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