You’d be hard pressed to find any organization that isn't using measurement -- either for marketing, sales, social media, and countless other ways. In fact, a recent report from IDC predicts that by 2017, 80% of the CIO’s time will be focused on analytics, cybersecurity, and creating new revenue streams through digital services.
So why is it that, with such a clear understanding of the value of measurement and analytics, the notion of measuring application development is still absent from the board room?
As application development and maintenance (ADM) matures as a discipline and measurement systems evolve, organizations are finding that the ability to measure application development can lead to many benefits. The problem is, the metrics most organizations are measuring are reactive and only provide a historical view of business processes. So while organizations can quantify the cost of their system failures and see the business impact, they struggle to build a business case to justify investment into the systems needed to proactively identify and prevent these failures.
Market leaders are shifting their thinking by understanding that when coupled with traditional measures there’s great opportunity in using software analytics as a system to improve executive visibility into the black box of IT, help prevent business risks, increase revenue, and improve ADM spending.
One obstacle to address is the traditional view of IT as a cost center. However, by incorporating metrics that describe development output in business relevant terms -- amount of functions delivered, the system’s robustness, performance, etc. -- the conversation shifts from cost control to “How can we maximize IT output?”
One of the first places IT executives can look to maximize IT output is in the identification and prevention of system vulnerabilities that cause software outages. Currently, U.S. companies are losing $26.5 billion in revenue and 127 million man-hours each year to do downtime. But with visibility into the vulnerabilities within critical systems, business unit leaders can identify issues that will disrupt business processes, impact customer satisfaction, and company brand. For example, we’ve seen clients of ours experience a minimum reduction of 10% of their production outages through the effective use of software analytics.
With most major system vulnerabilities identified and remediated, IT can finally turn their attention towards increasing development efficiency, and as a result, the revenue stream. The agility of a business in responding quickly to opportunities or threats is strictly limited by the systems the business relies on to service its customers. And the more needlessly complex the architecture or code, the longer it takes to add functionality to a system, verify its correctness, and deliver it to the customer.
By identifying the areas in the system that prevent development teams from operating at peak performance, organizations are left with systems that are more easily changed or extensible to new features and integrations. As a result your development teams can be more innovative with new features and updates, and substantially decrease their time to market.
For organizations outsourcing ADM activities, their visibility into the actual work performed, the quality of what was delivered, and the cost associated with it is often murky at best. For the most part, oversight and control of that work is relegated to service level agreements (SLAs) which are broad and open to interpretation. But coupling that data with an objective assessment of the risk and complexity of the delivered code is a powerful executive weapon that can be used to negotiate vendor charges.
Lastly, this visibility, industry benchmarking, and ability to prove performance improvements arms ADM leaders with the insight and facts needed to improve their dialog with business unit leaders and finance departments. The ability to secure funding for additional resources or to prove team effectiveness is an intangible benefit that leads to true alignment between IT and the business.
The benefits of software analytics do come with a small grain of salt: the impact of software analytics varies by organization and is based on how well the analytics are integrated into internal processes and systems, and the scope with which they are deployed. But regardless of process maturity level or the sophistication of the IT environment, all organizations are attempting to change their ADM activity.
Either they’re being forced to because of regulatory pressures, or simply a desire to make better software, but there’s a definite shift in the market to improve application development once and for all. Regardless of the reason, objective ADM measures can be invaluable at aiding IT transformation as they provide a normalized denominator for software development productivity and quality.
Erik Oltmans, an Associate Partner from EY, Netherlands, spoke at the Software Intelligence Forum on how the consulting behemoth uses Software Intelligence in its Transaction Advisory services.
Erik describes the changing landscape of M & A. Besides the financial and commercial aspects, PE firms now equally value technical assessments, especially for targets with significant software assets. He goes on to detail how CAST Highlight makes these assessments possible with limited access to the targetâ€™s systems, customized quality metrics, and liability implications of open source components - all three that are critical for an M&A due diligence.