Since computing's inception, companies have devised ways to leverage IT to optimize their business, either to improve their top line (market differentiators, improved time to market, etc.) or their bottom line (by replacing manuals steps with automation, for example). Practically speaking, IT management has grown to represent a sizable portion of any company's budget—anywhere from 1% to 7%, based on size and industry.
However, while IT has been growing in importance, it has by and large remained a distinct entity within any company. IT might be businesses' best ally, actively participating in the success of the company, but it is still very much an execution arm waiting to receive directions from the business.
A cycle of misses
From a process standpoint, as businesses come up with new challenges and opportunities, they express what they need IT to do; IT management takes the project from there. The end satisfaction of those needs will typically be delivered along relatively long cycles—anywhere from 9 to 24 months, in the best-case scenarios. Once IT eventually delivers on the initiative, business takes back ownership of the solution. This is when a reality check can be painful: Were the business assumptions that were made one or two years ago the right ones? Do they still apply to the current market conditions?
It is pretty typical for a "just released" solution to be scrambling under loads of new feature requests for a second release, not because its first release wasn't successful and its scope now needs to be expanded, but merely because, as delivered, it simply missed its target. The result? IT starts a new cycle, hoping its next deliverable will satisfy the business. The final result is, again, months away.
The current business-IT relationship might work fine for long-term projects where few internal and external conditions are expected to change for long period of times. But is this the world we live in?
The world we live in...
"In short, software is eating the world. More and more major businesses and industries are being run on software and delivered as online services—from movies to agriculture to national defense. ... Over the next 10 years, I expect many more industries to be disrupted by software. ... Companies in every industry need to assume that a software revolution is coming." — Marc Andreessen, 2011
In the last 15 years, software has become a deeply ingrained part of every aspect of our lives, private and professional. Software is not just a way to improve the way we do things anymore. Software has become the way we do things.
Take cars for an example. A few years ago, leading criteria, outside of the obvious (size, design, and color), would have been around the engine, safety features, and fuel consumption. Today, consumers also want to know how deeply their smartphone will be integrated for entertainment and telephony. What about the navigation system? Will I need to buy an outdated DVD, or will it provide over-the-air live information? What electronic safety system does the car provide? Will it automatically brake and prevent me from changing lanes if I'm distracted? And that's without counting the massive investments made in self-driving cars that should hit the market in the next few years.
...vs. 10 years from now
Ten years from now, if you were to buy a new self-driving car, would you rather buy the one with the best software (with best driving ability and safety), or the one with the best engine? I know what I'll do.
As a practical example of how this can lead to massive competitive advantage, consider Tesla. After the launch of its Model S, a few drivers hit metallic objects at high speed, which punctured the battery pack and ignited a fire. Shortly thereafter, Tesla initiated an "over the air" software update that was pushed to all cars on the market (without the need to visit a garage) that increased ground clearance on highways, thus reducing such accidents.
What's the cost differential between an over-the-air software update vs. a recall of all cars? Orders of magnitude.
The brain and the body
Coming to this realization might seem rather trivial, but its implications are not. If we accept that everything we do is increasingly interwoven with software, then this has pretty deep consequences. The idea that IT management is a "tool" of the business is like considering the brain as a "tool" of the human body. It is not. The two are intrinsically and symbiotically related, and they are equals. One without the other doesn't make sense. The same applies to IT. As the role of software increases within businesses, then business and IT must become one and the same thing, brain and body, as organs working together, not one for the other.
Business is IT; IT is the business. This is what "continuous delivery" is all about: shaping up business and IT to operate in resonance.
In the next decade, companies, whatever industry they live in, will have to relearn what it means to be a software company and what organizational, political, and technical challenges it poses. Only companies that can adapt to that transition will make it to the other side. Too many current businesses and their IT organizations are too ineffective for the challenges ahead and simply won't survive this transition.
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