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Analysing agility and competitiveness

Alex Cameron, Information Age

18/08/2005 14:21:30

Improving the agility, productivity and competitive position of a delivery unit begins with understanding its desired or optimal state. This state is driven by many contradictory factors, but the key ones are the business environment, type of work, client expectations, cost effectiveness, the centre's capabilities and the allowable investment.

Organisational investments in delivery capability are in general justified on the basis of improving delivery. Rules of thumb apply to certain functions and in mature organisations there may be measures that can support investments in process and tools. The question arises, how does the CIO/CTO determine what the desired state is for a particular delivery unit and how will the investment be optimised consistent with the return a particular delivery unit realises.

In a world where rapid changes in technology are an opportunity for organisations to achieve competitive advantage, agility is king. The price paid for agility is often high, but perhaps it does not need to be.

Agility and competitiveness

Agility is a measure of how quickly an organisation can adapt to address changing environments, technology, market demands or just how to get a great idea to market quickly.

There is a perception that agility is the domain of the small medium sized companies, however this can be challenged. Agility can result from reusable frameworks, model and component-based architectures, strategic alliances and integrating and balancing technology and process.

Whist observing that large companies may be agile in certain circumstances, there is a fundamental behavioural tendency for organisations with a large and diverse client base to move their delivery units towards high levels of service delivery excellence and to introduce process to ensure consistency. As a consequence, this has a negative impact on agility.

The ability to manage risk and bring new technology and tools to bear will generally increase the competitive position of an organisation or a client. This results from being able to either forward price or deliver an application or service that others have not developed a capability to deliver.

Delivering on time means nothing unless you are able to delivery the product faster and at a lower cost than a competitor

In summary a vendor must be: • Agile in delivery • Responsive to market demands • Able to deliver new technologies • Demonstrate consistent delivery • Able to tailor processes and tools to the type of work • Cost effective both from the client's and vendor's perspective. Therefore an organisation that can balance process maturity/improvement, and technology and tools strategies, will by definition be very competitive. A technique that assists the balancing of these forces will be discussed next.

The maturity and technology investment index

The Maturity and Technology Investment quadrant diagram provides a method of positioning a delivery unit with respect to the business objectives. This positioning will reflect the capability of the particular delivery unit as well as the likely investment in both achieving higher levels of process maturity or achieving an ability to bring new technology to bear, whether it be through tools or the ability to support rapid development techniques.

Maturity and process strategy axis It is accepted by the IT Industry that there is a high degree of correlation between process maturity and consistent delivery. Therefore delivery units that have a high level of process maturity can be characterised as having a high probability of delivering both complex and simple solutions whilst working within the boundaries of their expertise.

A delivery organisation that delivers a consistent service meeting all its Service Levels all of the time would be classified as highly mature in doing what it does but would arguably be incapable of supporting highly agile activities. However the same delivery unit, without integrated tools and processes, would be seen as delivery focused, process oriented, probably low cost, and unlikely to attract innovative or managed work.

Organisations that are Low Maturity, and have little or no process would generally be classified as not being reliable. They would not have good metrics programs and would be very reactive to events. Such an organisation would not invest heavily in process support and tools, and as a consequence would have many disparate processes and systems sustained by ad hoc tools. (Bottom left of figure 1)

Factors and capabilities that would be weighted to provide a measure along axis (Y axis) could be:

• Percentage of the Delivery Unit at different CMM/CMMI levels • Factoring in the ability to work with multiple process work types and software engineering methods • The ability to delivery work using multi-site work distribution methods (e.g. Follow the Sun) • Ability to use software engineering tools and automation • Ability to measure performance consistently • Ability to meet service levels

Managing technology, tools and methods axis Delivery units that have a high affinity to new technologies, tools and methods will, in general, be sought out for their ability to respond to emerging market forces, and are thus deemed to be agile and able to move products to market quickly.

They will be in a natural "growth" environment and will be leaders in using technology to make clients more competitive and effective and will be able to accelerate the development process, very often dramatically. (Bottom right of figure 1).

Conversely delivery organisations that do not have the ability to use emerging technologies, tools and methods, for whatever reason, will tend to be only be able to meet standard "time to market" objectives and will survive only because they can meet some basic time to market needs and may have specific industry knowledge or strength through personal relationships. This is an unsustainable business model in the long term.

Factors and capabilities that would be weighted to provide a measure along this axis (X axis) could be:

• Ability to develop flexible, scalable software architectures and design patterns (multi-tier, etc.) • Maturity of development and coding standards/frameworks • Ability and maturity in performance engineering and interface design for legacy systems/technologies • Ability and maturity in developing using modern technologies/ techniques • Ability and maturity in utilising integrated tools or accelerated development environments • Ability to deploy innovative architectures that provide a flexible and competitive environment • Ability to articulate and develop industry framework • Ability to embrace service oriented and model drive architectures • Ability to use advanced tools to transform and migrate legacy systems

Extending the Matrix to consider competitiveness

The quadrant matrix can also be extended to consider the likely competiveness of the delivery unit. This should be viewed within the context of the environment within which the unit is operating.

A delivery unit that is highly focused and able to draw on the reputation of high quality and consistent delivery, at the same time being extremely responsive to the market needs, will be by definition highly competitive. (Top right of figure 2)

Conversely, a delivery organisation that operates without good process or does not readily adopt new technology will not be sustainable in the market place and is very likely to be uncompetitive. It survives only due to local knowledge or is an "in house" shop that has suffered from lack of investment and characteristically always associated with a single client. (Bottom left of figure 2.

(b>Extending the matrix to include other dimensions This system could be adapted to incorporate cost of delivery, for example, Rates or type of work thus providing another dimension that could be used to balance cost of delivery against investments in process and technology. This would be a beneficial extension as the current quadrant diagram infers low cost but does not measure it directly.

Using the matrix: an example This diagram can be now used by management at all levels to provide a "visual" guide to the investment that will be made in the delivery unit. A "desired state" can be defined that balances high maturity levels with technology-based capabilities.

Figure 3 is an assessment of the current position of a group of delivery units within a division. Armed with this knowledge, management are now able to determine the desired state and the measurements that will determine the desired state and to be able to manage the capabilities of the delivery units to achieve the optimum output.

The investment in a particular delivery unit could now be limited to sustaining a delivery unit at a mid point on the diagram. Figure 4 highlights the investments that are required to be made to move a particular centre towards the desired state to achieve the business goals.

The tool provides an avenue for a systematic method of conducting further analysis into how an organisation's delivery units should be managed and positioned. The tool should also be very useful for portfolio management in determining which centres should have which certain capabilities.

Alex Cameron is an EDS Fellow and Chief Technologist for the EDS Best Shore (SM) Solution Centres. He can be reached at alex.cameron@eds.com.