Erfolgreiche Softwareunternehmen mit einer längeren Geschichte haben über die Jahre einen guten Kundenstamm aufgebaut. Dies hat in Krisenzeiten seine Vorteile, während es in Wachstumszeiten die Dynamik erschwert. 

Wenn ein Softwareunternehmen lange am Markt ist, dann gilt aus der Historie meistens das traditionelle Geschäftsmodell:

• Verkauf von Lizenzen: Einmaleffekt und Investition des Kunden
  
• Projektumsätze der Implementierung: Zum großen Teil Einmalumsätze, neben der Betreuung von bestehenden Implementierungen
  
• Wartungsumsatz: Jährlich wiederkehrend
  

Unternehmen, die mehrere Jahre im Geschäft sind, tendieren üblicherweise in Richtung 25 Prozent Lizenzumsatz, 25 Prozent Consultinggeschäft und 50 Prozent Wartungserlöse in der Umsatzstruktur. Sollten bereits Cloud- und Subscriptiongeschäftsmodelle gestartet sein, dann wird sukzessive der Lizenzeinmalumsatz gegen wiederkehrende Subscriptions getauscht, sodass wiederkehrende Umsatzanteile von 60 -70 Prozent erreicht werden können. Diese basieren oft auf Verträgen, die nicht sofort kündbar sind und damit stabil bleiben, wenn das Unternehmen moderne Technologie, kritische Prozesskomponenten und guten Service liefert.

EXTRA: Familienunternehmen: Nur wenige nutzen Zukunftstechnologien [Studie]

In der Krise bedeutet dies, dass Kunden möglicherweise ihre Investitionen zurückhalten oder überdenken, aber nur im geringen Umfang an den bestehenden Vertragsbeziehungen etwas verändern können oder wollen. Softwareunternehmen mit hohen wiederkehrenden Umsätzen sind also deutlich besser für die Krise aufgestellt, als solche, die hohe Anteile an Einmalgeschäften in der Umsatzstruktur haben. Ein Augenmerk muss auch der Kündigungsrate gelten, also der Churnrate von diesen wiederkehrenden Umsätzen auf den Jahresumsatz.

Die Cloudunternehmen haben früh auf Subscriptiongeschäftsmodelle statt auf Lizenzeinmalumsätze gesetzt und sind nun im Vorteil.

In der Wachstumsphase mögen die großen Einmalumsätze aus Lizenz- und Consultingprojekten in der GuV beeindrucken – diese münden aber nur zu rund 20-25 Prozent pro Jahr in den wiederkehrenden Umsätzen über die Wartung- und Betreuungsverträge (durch die Wartungskonditionen). 20 Prozent auf 25 Prozent (Lizenzumsatz) sind eben nur 5 Prozent Wachstum auf dem Gesamtumsatz und hiervon ist die Churnrate noch abzuziehen.

Dies ist ein Grund, warum Softwareunternehmen mit hohen wiederkehrenden Umsätzen bei niedrigen Chrurnrates deutlich besser bewertet werden und für eine Krise gut gerüstet sind: Da nur kleinere Teile des Umsatzes in der Krise wegfallen können, wenn ihre Kunden die Vertragsbeziehungen halten und erfüllen.

Veröffentlicht auf unternehmer.de

Our ability to mobilize applications, use modern interfaces with a better user experience (UX) which makes it intuitive to interact with a device, having Artificial Intelligence (AI) that allows speaking to the device and getting advice by a service is unparalleled today. Our technical capabilities changed so dramatically that we can create completely different experiences to make digitization happen.

Second technology is now available to almost everyone, anytime, anywhere. And you don´t even need a terminal to access information in an office. There are relatively cheap and affordable large scale services that can be accessed on the go. That’s the difference and offers tremendous opportunities. So digitization is a leap step ahead the past, it is fast, affordable and easy to use.

The ability to electronically compute results and have transactional systems was the first starting point and the ability to have analog contents available at a computer screen the second one. Content Management (CM) has evolved over time by transferring analogue content such as invoices, contracts and documents to an archive system and making them available for search and retrieval. That was the starting point of Enterprise Content Management (ECM). Adding the ability to collaborate made it Document Management. A company could digitize content and gave access during to the archive to retrieve and use information for business. This has mainly driven efficiency. Still, 40% of companies have not fully digitized the content to fuel business processes today.

Content management has evolved from this rather static approach in files and folders to Process Content Management (PCM) or Contextual Content Management (CCM), where the user gets the right content at the right time, such as an invoice with delivery note and the order for a particular transaction, comparable to Amazon© and others offering further products to buy while shopping a specific product.The most important value driver is productivity in enterprise environments and modern applications that are already in use today. The availability of more data points and even IoT (such as machinery data for installation documentations in field service) helps improve contextual content management every day. That’s the business we’re in and deploy solutions for customers.

We believe there is a convergence of trends for the content industry. The trend to mobilize applications and mobile services will connect with the enterprise world of content management. Why is that?

Mobilization and Consumerization of business services is mainly driven by the end customer to gain access to services such as ebanking, booking, shopping or any other service. This also reaches to the employees and business partners who want to access applications with an easy-to-use interface at any time. The digital workplace is an imperative in the war for talent, ask your Millennium workforce. Though the corporate world is different as the services are related to sensitive confidential data, the backend systems are not easy to change and regularly provide only a limited mobile and user experience. Most customers have to deal with multiple environments and cannot lock in everything on one system or platform. But the demand for such solutions and new business models is pressing.

In the past, companies have asked an agency to create an application, such as a portal for a single use case, and IT struggled to gain access to every back-end system to make it an integrated, robust business process. Meanwhile, another department of the same company contracted another agency to develop other processes. That was neither ready for business, nor scalable, nor maintainable.

Today, there are multi experience platforms that can connect to multiple back-end systems in a controlled and secure fashion for IT and corporate governance. The multi experience platform needs to be enterprise ready: that means secure, scalable and provide rock-solid API Management. For companies, the platform needs to be low code to configure a use case within couple of hours without any IT developer and prototype an application that simply extends digital services from a web or mobile app to chatbots, voice control or AR and VR headsets. Once the platform is ready, and the first use case is delivered to the customers, the next one can be built on the platform easily as everything is set and scalable to the business needs. Another major advantage is that great multi experience platforms can easily and quickly add new services to existing use cases. Whether you want electronic signature, a blockchain, an AI engine, a workflow configurator, an authentication service or anything else – this will be once and simply implemented and is immediately available for all applications.

Data analytics, AI, and multi experience services will enable us to create scalable use cases for the enterprise world in a fast mode without programming.

Now the convergence of content management and multi experience platforms begins. Content that has been used to feed and serve business processes will be analyzed, extracted and interpredet by AI to make it available for the business processes and to direct a workflow automatically to the right decision point or employee. That is the basis for contextual content management. Obviously, the backend integration of such systems helps multi experience platforms to speed up their ability to integrate to corporate IT. The process knowhow in combination with analyzed content makes completely new use cases possible that serve the end customer of a digitized business process better – as the decisions will be based on more and detailed corporate data.

The next big thing will not only be the mobilization or consumerization of business processes for employees, customers and partners, but also data analysis and measurable user experience to predict, advise and improve better services.

In the traditional procure to pay process (P2P) for example, the content management industry scanned invoices, matched them to orders and automated accounting processes. With AI services, advanced UX and dashboards, we can move on to anomaly detection to detect fraud in the process or compare purchase transactions across multiple ERP systems, compare prices, predict better cash management, and more. The value which can be generated by the analytic use of existing data and the new multi experience platforms with additional services can lead to a significant competitive advantage. The solutions can be prototyped fast and easily without changing the corporate IT application landscape. Keep the ERP environments as they are and enable the digital journey for your company easy, fast and Corporate IT ready. Enhance the business value by the use of data analytics.

SAP just bought Qualtrics to get into Experience Management along processes that automatically deliver such a multi-experience platform in real-time across multiple backend systems to identify process bottlenecks or poor user experiences, improve business processes, and be one step ahead of the industry.

Data analytics, AI, and multi experience services on multi experience platforms will enable us to create scalable use cases for the enterprise world in a fast mode without programming, that are secure and have the ability to get an inherent feedback and improvement process to differentiate them from the competition. Feeding this with the content from the content management industry gives us the data to take well-founded decisions and generate value and results in short time.

As a side discussion, we at I believe that this customer specific data is owned by our customer and not shared amongst others without consensus. As the data and the modeling will become the real IP to train and leverage AI Tools to build up the platforms of the future, it is key to make consensus decision where you put your data to train your systems from.

Published on LinkedIn (amended)

Content Management is obviously transforming from capturing, storing, searching and retrieving content into a holistic, process based approach, which is calledprocess content management. Digitization of business processes is still one of the major challenges for many companies. 

Existing core systems are yet unable to digitize or mobilize business processes the way they create a real business differentiator in terms of cost, time or customer experience. 

This fact makes most companies hesitate. The project risks and switching costs of a big-bang, the replacement of existing core systems with new, modern solutions that enable a complete digitization and mobilization of the business process, seem to be too high for companies. They therefore remain in lock-in effects. In most cases, companies are tied to the process design offered by the core system vendor, and a change or replacement appears risky and uneconomical. This is even more difficult for mergers of companies, where it becomes necessary to connect different units with different backend systems.

This is where modern content management technologies find their application and their playground. Content Management Systems have a tradition in archiving and managing data in a trusted manner; they therefore have interfaces to most of the existing core backend systems with a deep integration to handle data. 

Modern content services platforms are able to manage workflows and use a variety of services to design modern, digital and mobile processes. The ability to deal with data from all major backend systems and creating workflows based on modern customer frontends solves the customer’s dilemma. The modern content services enable customers to modernize and mobilize without a big bang approach. So they are no longer locked in with only one vendor’s process design. 

Connecting all of a company’s backend systems to a content services platform that allows to leverage all kinds of services and flexible process design with modern and mobile customer interfaces has the ability to digitalize business processes in an agile fashion. Companies can take a process at the time and deliver small increments to the market to evolve its digitization and mobilization. This is a low-risk, fast and agile approach that is based on standard technology platforms; it will be configured rather than customized or programmed.  

Technology is additionally able to slowly migrate complete infrastructures by making content accessible to core systems across the whole enterprise while legacy systems can be retired. 

Digital signature processes are even more integrated into the content services platforms - with trusted certificates that reflect the current state of technology. The digital signature accelerates processes and reduces costs, replacing the complex signature and approval process. It improves usability and makes customization of processes and applications a reality. Consumerization is the buzzword.

The next wave of content service will rely on artificial intelligence to capture and interpret content along the business processes. With Artificial Intelligence (AI), a new level of content interpretation can be tapped to drive agile process execution, finding the right person for a transaction or further automating the process. AI content services have the potential to create a real competitive advantage in terms of cost, time and customer experience. 

Finally, trusted content exchanged between parties, will become more important in the future than it is today. Trusted content enables the authentication of content throughout the process - even beyond company boundaries. In many ways, this is going to be more relevant to businesses, e.g. when reviewing transactions, external certificates or health data and the like. These authentications can be integrated into the modern content services platforms by blockchain technology.

Modern content services platforms will be required to digitalize and mobilize business processes. In this field, the implementation of modern content services will play a major future role. In summing up it becomes clear, that ECM is not dead but it will actually become a core competency which will be moving into content services. 

In it’s new appearance ECM will be driving the digitalization and mobilization of business processes in companies. For companies, this creates the opportunity to transform own digital worlds of processes in an individual and agile way. 

Published on LinkedIn

How to “Scrumify” your business projects to generate strategic impact through self-organizing teams, real-time decision making and enhanced transparency. 

As markets continually shift and change, the way companies execute their strategy and communicate it to their teams needs to evolve. With digital transformation dominating the world of business, the ability to quickly translate strategy into effective action is critical. 

Going agile is nicely described by the co-author of the agile manifesto Jeff Sutherland and author of the bestseller 'The Art of Doing Twice the Work in Half the Time'. 

First of all you cut down delivery times of projects or products to market. That makes the company more competitive and saves cost at the same time. Second, you leverage all the skills and motivation of your teams and let them embrace their creativity. 

Being fast, less costly, lean and innovative are the outcomes if you really and truely go agile. Please find more information in my article 'Why Agile on Linkedin?'

Modern organizations operate in environments that are moving faster than ever before—and your company is no exception. 

As markets continually shift and change, the way you execute your company strategy and communicate it to your teams needs to evolve. With digital transformation dominating the world of business, the ability to quickly translate strategy into effective action is critical. Regardless of your situation, your organization needs to be well prepared to deal with the four attributes of modern business, collectively known as “VUCA”(1): VUCA Volatility Uncertainty Complexity Ambiguity

The speed at which VUCA changes the conditions in your world requires a new approach to strategy implementation. In particular, it means your teams need to be able to collaborate in real time, easily share knowledge and work anywhere. When that happens, you benefit not just from a new and efficient way of working, but also from a clear advantage over competitors who are still working in ways that are slow and not fit for purpose.

Luckily, that new way of working has already been invented. It’s called the Agile approach, and it uses practices like Scrum and Kanban to get work done faster and with better results. Software developers have been using Agile for years, but forward-thinking organizations have started to realize that other lines of business can benefit from it too - as long as they are willing to embrace it.

At swarmOS© the team have worked with midsize and large organizations to help them apply Agile principles to business projects. This article encapsulates what we’ve learned, presenting a nine-step approach to adopting Agile and Swarm organizational practices in your business strategy execution. 

If you’d like to discuss how to make the transition to Agile, Scrum and Swarm, please do contact us - you’ll find our details on the back page.

Successful strategy execution relies on teams being able to work seamlessly and being empowered to make quick, autonomous decisions. In the world of software development, the Agile approach has been successfully used for more than a decade, enabling global innovators like Amazon®, Tesla® and Google® to develop and deploy new software and services, fast. 

One particularly popular “flavor” of Agile is a framework called Scrum – which empowers teams to deliver results in an efficient manner, and which also promotes transparency and real-time collaboration through Agile toolset best practices. (For a great introduction to the benefits of Scrum, we recommend Scrum: The Art of Doing Twice the Work in Half the Time, by Jeff Sutherland.) 

Scrum practices revolve around the concept of “sprints”: development cycles that last two to four weeks, during which teams work on their deliverables and finally present results to customers. Following each sprint, Scrum teams can quickly evaluate measurable results, so they can make adjustments for further project execution.

Another important dimension of Agile for the purposes of this paper is the concept of “Swarm”. This is an organizational principle that enables self-organizing, small, cross functional teams working in different geographies to align, making better use of different skills and resources across the enterprise.

Being fast, less costly, lean and innovative are the outcomes if you really and truely go agile. 

Crucially, business leaders looking to take advantage of Agile, Scrum and Swarm must be prepared to move away from a traditional, top-down management approach. In an Agile world, the key to success is the power of a self-managed team rooted in individual competence, trust and a shared vision on where to go. Once a Scrum team has started its sprint, the role of management is to enable the team to overcome road blocks in the project — not to micromanage. 

Executing a successful Agile project relies on a number of key principles which are defined in the Agile Manifesto.

Agile mindset: 

As an executive team looking to lead by example, moving to Agile and Swarm demands a mindset of cultural change, mutual trust, empowerment of the team and a flexible approach to Agile execution. 

Effective collaboration and communication: 

The whole organization must be able to collaborate and communicate in real-time across teams and time zones. 

Effective communication and collaboration require an Agile toolset. Email and file-sharing tools are often unsuitable, as they do not support in context real-time knowledge-sharing and global collaboration.

If you can adopt the right mindset, values, principles, processes, and tools, your organization will quickly feel the strategic impact of Agile. 

In this article, we outline nine steps that will help you convert your business strategy into projects that can be delivered fast using an Agile, Scrum and Swarm approach. 

The first step is to define your strategic goals. Creating impact relies on building a strategy that you can measure, execute, and communicate to your teams effectively. 

You’ll likely have an existing strategy or want advice on a new one, but it’s important to understand why you have a particular strategy (and why you would want or need a new one).

Once you’ve defined your strategy, you need it to cascade down through your organization, so that everything your teams do is aligned to your strategic goals. 

To do this, we use a principle called OKR(2), or Objectives and Key Results. OKR is a great way to transform strategy into something actionable. It starts with a well-formulated strategy underpinning the vision and mission of your organization, generally covering the next 5-10 years. From this, you then define your strategic goals over a 1-5-year period. 

Next, you define your objectives and key results, so that every team can define the bi-weekly and monthly actions they must take. Usually, objectives will work to a quarterly timeline and be measured against pre-defined key results—maintaining transparency throughout the organization. This also ensures that every employee is working towards the same measurable objectives. 

Keep in mind that to execute on your strategy, all actions and deliverables must contribute to at least one objective. If they don’t, you need to scrutinize whether they really add any value to your organization — or rearrange your OKRs to provide the linkages needed.

As an Agile or Swarm organization, your toolset is as important as any other key design principle. If you can’t create an environment that supports effective communication, collaboration and Agile practices, you won’t get the benefits of Agile - especially if you have distributed teams working on complex projects. 

There are a range of tools available to support Agile project management (as opposed to traditional, “waterfall”-style project management), but according to Gartner®, Atlassian®, an Australian enterprise software company, has one of the most modern toolsets, and is growing by 45% per year in the Agile management software space. 

The Atlassian toolset is the most complete and integrated software we have come across, with an open and modern architecture to support add-ons for additional functionality. We find it’s best suited for bringing new flexibility to software and business projects, as well as supporting operational service desk processes. While other tools are up to the job, none has the full spectrum and well integrated functionalities of agile project management features that Atlassian has.

The importance of a toolset that business users feel comfortable with

A critical point to bear in mind is that Agile toolsets are predominantly designed by and for software development teams. They lack the kind of business-friendly user interface (UI) that encourages adoption among business project users. 

When you come to evaluate toolsets for business use, you will ideally look for one with the following key features: 

•  Guides users and helps them create and lead new business projects easily
  
•  Has a simple, intuitive UI that ensures a satisfying business user experience
  
•  Can easily visualize key business project success factors such as:
  
•  Project Scope to be delivered in comparison to your teams capacity - which determines the timeline
  
•  Breakdown of project time spent and costs accrued to make budget
  
•  Critical issues or dependencies that require user intervention
  
•  Feedback from customer and business teams 
  
•  Road blocks that require management intervention 
  
•  Translates Agile into the business world by using deliverables, risks and milestones
  

Whether you choose Atlassian or another Agile toolset, it should be one that lets you create business projects with the right issue types and attributes (milestones, deliverables, escalations, risks), and different workflows for deliverables (e.g. approval workflows on legal contracts). It should also have easy to use screen designs and dashboards that prompt user action. 

While Agile principles can help you accelerate business projects, there are key differences between the way Agile applies to the worlds of development and business. 

Software projects are defined by the code base of their modules or services, something that can be tested and evaluated directly. Software demands a certain standard of infrastructure, data models, and defined APIs to produce a complete product. In a Scrum software project, the norm is to have the Scrum team together in one room, talking and completing the Scrum board face-to-face. 

By contrast, a business project has more dependencies, and the deliverables are much more diverse. You could be drawing up contracts, completing a warehouse project, hiring new staff or obtaining government approvals, for example. Usually, business projects involve teams from across different business functions, with project teams often distributed across countries and regions.

Like software projects, business projects are measured based on outcomes. The stories, tasks and sub-tasks which make it to new versions of code are known as deliverables in the business world. Business deliverables are outcomes that are measurable and can be shown to and evaluated by the customer. However, they cannot be tested in the same way that software can, and should already be proven to be ready for business use before they are deployed. 

The chosen toolset should support the implementation of deliverables which are required for business projects. 

Your organization is invested in a variety of projects at any one time: these may be transformational projects digitizing your business processes, digital projects or simply everyday operations. However, they should all have one thing in common: they should contribute to your company strategy. Otherwise, you should not waste precious resources on them. 

Projects need to be measured on outcomes that produce deliverables, and create value for the organization. That means linking every project to one or more of your objectives. Your project managers (product owners) must be able to explain the links between their project and the objectives, and show that they are measured against key results – in Scrum the product owner is responsible for the return on investment.

After you’ve converted your strategy into workable objectives and ensured key results are measurable and linked to your project, the next step is to “scrumify” your project execution. 

All Agile approaches rely on real-time team collaboration to organize workloads and execution. Agile projects are organized in a way that displays all the key deliverables needed to achieve the project goals, resulting in a Minimal Viable Product (MVP). These deliverables (in the software world they’re called “user stories”) are prioritized in the backlog and split into sprints. Every team then runs a sprint to complete a certain number of deliverables, which are then delivered at the end of the sprint.

Transparency, collaboration, prioritization, and self-organization are all important components of a successful sprint, and team commitment levels are measured at the end of the sprint. 

An important part of the Scrum approach is a regular feedback loop within the team. Typically, this takes the form of daily stand-up meetings, sprint reviews, recognition and reflection. This allows for a readjustment after every sprint on the direction of the project scope and desired outcome. 

When teams are self-organized and have the capabilities to solve tasks internally, execution velocity improves and productivity increases — leaving management free to focus on resolving bottlenecks. 

To make the move from strategy to achieving strategic goals, objectives and key results, you need to make your OKRs visible and measurable by moving them into your chosen toolset. Create your project and link it to the goals and objectives you have defined.

Create your project and start creating the user stories 'deliverables' using versions 'milestones' and EPICs zu structure your project.

Although not a standard procedure in Agile software development, risks are critical to manage throughout any business project, as your executives need to be aware of any major business impact. Creating a risk element allows every team member to document points of risk, which can then be evaluated by the product owner. This gives transparency to areas of risk and makes them more manageable. 

Sprint planning can manage risks by reprioritizing backlogs or through resource planning. Areas of risk can easily be viewed on the dashboard and sorted by priority and/or completion date. 

The ability to estimate a backlog based on the effort, entered as points at creation of a deliverable, allows product owners to see the total effort as a sum of points of the backlog. 

By logging the number of teams and sprints working on a project — including their velocity in points (team capacity) — you can start estimating time to completion based on the sum of points of deliverables (scope to deliver the project goal) in the backlog, matched to the team’s capacity. That requires that your chosen toolset has team management included and being able to match team capacity and your project scope.

Your project is still in Agile execution while visualizing the estimated timeline by matching your backlog points to your team’s capacity. Significant changes of the scope immediately get recognized and will be evaluated against the timeline and cost estimations. 

Using a project budget for the project, you can view and match the daily cost rates across teams and multiple sprints. Adding the budget to the project description can help you to create truly accurate cost estimates by matching your actual cost run rates, times the number of sprints plus the money spent so far. The capacity against your points in the backlog provides a precise view of your required sprints. Estimating time and cost of your business projects in agile mode creates great confidence with your stakeholders.

Blockages can create significant issues on any project, and undermine the basic principles of Agile. By weighting deliverables using a points-based system when they are created, you will ensure important information gets added early on in the project – and gets refined during the sprint planning. We propose certain ways of discovering potential blockages such as impactful chains of blocking project issues and escalation of user stories by the team.

The ability to document links between deliverables as being “blocked” or “related” means that priorities can be displayed using a chain of open deliverables dependent on each other. By adding up all the points (work effort) within a chain, product owners can see how significant each chain of deliverables is and what order of priority they should take. 

Being able to visualize the most impactful chains based on priority and effort ensures that project risks are flagged immediately and can be prioritized. This is useful for projects that can contain more than 5,000 issues running at once – where manual discovery processes would normally fail. 

The escalation is available for every team member to trigger an automated monitoring process. Escalations will be raised by a team member when a blockage appears that can't be solved by the team. There are three levels of escalation severity based on which different audiences will be notified. Red escalations are immediately passed to the product owner and executive to be resolved – removing the blockage in the project and enable the team to execute.

The ability to visualize project costs, and budget estimates, along with timeline, team and customer status, can help you predict project results with an accuracy that only gets more precise as the project unfolds. Because all deliverables are linked to the objectives set by the strategy early on, project outcomes and ROI can be matched against key results. 

This allows product owners to clearly communicate estimated project results, which can be linked to strategic company goals and vision. No polished executive presentations are needed as the executives have access to the project dashboard in real time - the single source of truth.

Using the full advantage of the Agile approach and deliver ‘twice as much in half of the time’ according to Jeff Sutherland creates the expected ROI. The ability to adjust your project deliverables for optimal outcome thoughout the project improves your success rate further.

We know what it is like to live through long nights on critical business projects with high dependencies, escalations, tough timelines and milestones. This article reflects the experience of managing business projects using Agile, Scrum and Swarm approaches - delivering faster results, better outcomes, and leaner business operations.

With the agile approach and toolset you are able to translate your strategy into executable work items organized in agile projects. You leverage the power of your whole organization by using swarm organizational principles. Teams work against well defined sprints and manage their work themselves. The outcome is closely aligned between all stakeholders. Your organization can move to agile and get agility, reduced time to market and fully leverage your motivated and highly skilled workforce. Your company becomes much more competitive in a VUCA world. 

the author is founder of swarmOS GmbH.

(1) Horney, Nick, PhD; Pasmore, Bill, PhD, SVP; O'Shea, Tom, CMC. People and Strategy, suppl. Special Issue: Leading in a Time of Uncertainty; New York33.4 (2010): 32-38.

(2) “Objectives and Key Results: Driving Focus, Alignment, and Engagement with OKRs” Paul R. Niven and Ben Lamorte 

Published on LinkedIn

I want to share some thoughts from an operational perspective based on real experience.

Going agile is nicely described by the co-author of the agile manifesto Jeff Sutherland and author of the bestseller 'The Art of Doing Twice the Work in Half the Time'. I usually start my introduction by talking about this book and most people think 'what has this guy been taking!'

Let's have a look behind the scenes and understand what's involved and what's different when your organization goes agile.

First of all you cut down delivery times of projects or products to market. That saves cost and at the same time makes the company more competitive. Second, you leverage the skills and motivation of your teams and let them embrace their creativity. The tiresome middle management battles will disappear and your organization no longer works in silos.

Being fast, less costly, lean and innovative are the outcomes if you really and truely go agile. Let's have a look.

There are rumors out there that Agile is about teams that decide, on their own, what and when they deliver their work - hence the outcome is unpredictable. It's actually the opposite.

The waterfall way of doing business is that you describe your requirements lengthly ahead of your project. Things may change when you start executing your project and your original requirements will not last for long. The problem in large organizations is that we have spent far too much time in defining detailed requirements which will most likely change - which is a waste of resource. In agile you have a high level plan of what you need to achieve, but you refine your requirements close to the execution of your work, because by then you have learned a lot and your requirements are much better understood and do not need to be reworked.

Large organizations work in silos. The business needs to describe what they want, purchasing then takes this to a supplier to negotiate a contract. The supplier builds the product, sticks to the contract and when testing the outcome, the business figures out that this is not what they meant to get. 50% of information is lost by handover between siloed departments. In agile you work every two weeks with your internal or external customer and the delivery team gets feedback if they are on track to deliver what is needed for the business.

Agile works in small teams across all the functions needed to deliver the result. These small teams are very similar to the special forces teams in the military, they are 7-9 people which allows optimal communication, they have all the skills to deliver the required mission. No cumbersome handover between silos, no fingerpointing, the team counts and delivers. You leverage the skills of your best experts on the ground who work cross functionally to leverage the creativity of diverse teams.

Teams in agile get the freedom to decide how to implement the agreed business outcome and organize themselves to learn how to improve this teamwork. But this freedom comes with very strong commitments. The teams commit every two weeks to deliver a working result. They need to standup in front of their customer and show a business outcome that has a value. Agile calls this demo or die, if you have nothing to demo, you have nothing. Half ready is not delivered. This creates a lot of positive energy and motivates teams to show results every two weeks to your customer.

In Waterfall you task people to deliver a piece of five day work in three weeks and this means you build a huge buffer in a lot of project tasks. This buffer actually sums up across the project and is unmanaged but does not help to deliver on time as only 50% of waterfall projects deliver their project value at the end, 18% get never implemented and approx 40% are above time and budget (Source: Standish Group).

It may happen that the business sends an application requirement to the software service center and then receive feedback after 3 weeks that this is actually not what software development needs to build a good application - or worse, they build the product and the business gets something that isn't fit for purpose. 

In Agile the business sits alongside the software development team and delivers the tasks together. They align daily and can raise any questions. The delivery is done in small incremental pieces which can be tested and demoed. The team designs, delivers and tests their results before they stand up in front of their customer to demo. The positive momentum of this collaboration in real time is enormous. The progress is transparent to the whole project team and organization. Transparency drives results and momentum.

The largest change is a cultural change and this hits management the hardest as we reported in this blog post. Hierarchical organizations will face a significant challenge. If you have led a large entity and you have control of your employees and the situation arose where another entity wanted something that you did not agree to, then you were able to block this initiative. Here comes the bad news, this power is gone. 

Your teams get tasks with goals to deliver. These goals support the company strategy. The teams accept the goals, organize themselves across the company by cross functional teams. The role of management is to agree on the strategic goals and objectives and afterwards to remove blockages for the teams to enable them to execute. As teams are self-organizing, you can't interfere or micro-manage any longer. You should not pull resources out from a team when committed. The team may fail to deliver but they do fail fast as they need to demo their results every two weeks, they learn and do better. Trust them, support them and you get much more than traditional methods will deliver.

We have conducted agile trainings where teams improve in three iterations on delivering work by 30 to 100% - by learning and improving on how to do work; by organizing themselves and by asking management to remove impediments.

Last but not least, if you are able to let a team focus on one project at a time, rather than doing three things in parallel, then productivity gets a boost. Teams and people get 50% more productive by doing one thing at a time and finishing instead of trying to finish three things in parallel. The set up time to restart a half ready task after doing something else is a huge productivity blocker.

Through two week delivery cycles called sprints, you get incremental business results and can adapt direction if market conditions change. 80% of business value is achieved with the first 20% of your efforts. This is what agile teams do, they prioritize together with their internal or external customer on what needs to come first and delivers the largest value. They are flexible to adapt directions every two weeks, if needed, to achieve the best result for the customer and the company. This makes trade off decisions very obvious and you will need to be ready to take them. 

Going agile gets the best out of your teams: creativity, motivation, excellent collaboration. You get self organizing teams supported by management to deliver results faster and being more innovative by leveraging all of your organizations' skills.

You shorten your time to market, you reduce cost and improve productivity. You focus on customer satisfaction and value delivery,

Companies like Amazon, Google, Tesla or the FBI are delivering great results through the agile approach. Innovative champions like Tesla, INGdiba and others are gaining competitive advantage to adapt faster to changing markets. There isn't hardly any organization that can afford to neglect the benefits of going agile.

You need to do three things to succeed: 

1. an Agile Mindset is key and this comes from the top and requires a cultural change, 

2. collaboration across the company needs to be the driving force and 

3. enable your teams for real time collaboration with the right agile toolset. Email and file sharing are not enabling agility and they maintain silos.

The agile approach has been proven to be much more successful than the waterfall methodology. Change in Culture is key to succeed, Management needs to adopt its role when working in an agile mode and collaboration of teams is a key success factor. Management plays a major role to succeed. 

Amazon, Google Tesla, INGdiba are trademarks of their companies

Published on LinkedIn