In most enterprises business strategy is still developed using a highly structured, sequential approach similar to the waterfall model for software development. The process typically goes something like this:
- An attractive market opportunity is identified
- Customer segments, pain points and unmet needs are analyzed
- Market surveys, research, and focus groups are conducted
- Competitors are profiled
- Financial models are built
- After a series of internal hurdles are cleared, a prototype or proof of concept is eventually developed
The full process often takes months or quarters of research and analysis before an early concept hits the market.
Start-ups, by necessity, take a more agile approach to business strategy. They lack the time and resources required for comprehensive market analysis. The successful ones focus on quick market experiments, A/B testing, and rapid product iterations that are driven by a philosophy of “learn by doing.”
They focus less on developing a comprehensive plan, and more on rapidly iterating off a minimum viable product (MVP) to achieve product/market fit. It brings to mind the Mike Tyson quote about boxing that “everyone has a plan until they get punched in the face.” Start-up success is predicated less on developing the plan and more on using agility to compete in the ring it has chosen.
Which is where we get to DevOps and Cloud. By lowering the cost and risk of experimentation, while also dramatically reducing time to market, DevOps and Cloud make it more attractive than ever for the enterprise to adopt an agile model for developing business strategy. Given the rapid pace of innovation, a recent post in Forbes even went so far as to suggest that the traditional approach to developing strategy is now dead.
In an earlier post we explore whether business strategy needed to be more closely linked to DevOps in the enterprise. Here’s why.
If the cycle time for business strategy and the software development lifecycle (SDLC) is agile and aligned, we get the “unicorns” – defined by enterprise IT as highly disruptive, but rare phenomena often heard about but rarely seen like Netflix, Facebook, Twitter, etc. It’s no surprise that the companies here all grew from relatively recent start-ups where they had to be agile by necessity.
While the IT use of DevOps and Cloud models in the unicorns was highly visible, these companies also excelled at using agile models for developing and refining their go-to-market strategies. Identifying the products, services and features that drove success required rapid learning by “failing forward” with many unsuccessful projects that no one has ever heard about. The key to success was that the business and IT were both operating in an agile model.
What happens in the case where business strategy is agile, but IT is stuck in a waterfall mindset? We end up with the classic shadow IT problem: the business finds another way to get what it needs from third-party service providers. The business ends up experimenting and innovating using external cloud providers instead of internal IT.
What happens when IT is leveraging DevOps and agile models but the business is not? What if IT is more agile and flexible than the business strategy or the enterprise architecture? IT efforts end up focusing on essentially maintaining the status quo from a business strategy perspective. Those efforts span accelerating new services, feature backlog, enhancement requests, bug fixes, and so forth—but primarily for existing customers and markets. Is there value in this? Absolutely. Is it disruptive from a business point of view? Not necessarily.
Have DevOps and cloud become “table stakes” for IT organizations? The answer is certainly yes. It’s hard to think of a scenario where, at a minimum, accelerating product enhancements and code fixes isn’t valuable. But the true business value of DevOps and cloud arises when the business figures out how to leverage agile development and continuous delivery models as a new way of developing strategy.