Making the Critical Connection Between Software Development and Delivering Business Value

Introduction

The ultimate goal of software development is to deliver software that is pragmatic, solution-oriented, and generates ongoing business value for an organization and its many stakeholders. Unfortunately, today’s software industry frequently finds itself locked into an ever-increasing sprawl of complexity with rising development cycles and bulkier deliverables.

Accordingly, most organizations are far from maximizing the value of their software initiatives—many of which may be overly encumbered with elaborate architecture, features, and costly components that are remotely or entirely disconnected from fully optimizing business value for a firm.

To make the critical connection between software development and delivering bona fide business value, the software development lifecycle must consider and prioritize “value-driving” factors throughout the entire process. While there are multiple ways to link software development efforts to added business value, the following seven factors provide a solid framework for successfully getting there.

Maintaining a Pragmatic Focus

Even high-end companies are frequently guilty of becoming distracted when it comes to staunchly maintaining a pragmatic focus on delivering business value.

When it comes to value-driven software development, the team must maintain an unwavering practical focus on doing only the things that align the project with high-level business objectives. At the onset, there must be an agreed-upon roadmap to ensure that the scope of the project is limited to working on core functionality—the bare necessities required to achieve identified business goals. This will help to avoid unnecessary waste by building non-essential features and components that do not generate real business value.

Always remember that the best architecture does not always deliver the best value. Software engineers tend to love architecture and sometimes it causes them to lose sight on delivering business value when they become too engrossed in these details.

Overall, the best software design is usually simple and easy to understand. When designing with a pragmatic focus it is always best to start simple and stay as simple as you can. So, when possible, do not add features just because it can be done, or because one person might use them.

Always balance the benefits of a new feature against the more subtle value of simplicity. Through pragmatic design, the chances of connecting software development to business value will be greatly enhanced.

Consistent Stakeholder Involvement

A customer and its important stakeholders—such as investors, customers, channel partners, executives, and business unit employees, among others—should view themselves as “partners” rather than purchasers by remaining involved throughout the entire software development process. Stakeholder involvement ensures that there is a shared vision and collective approach to capturing business value from a software development investment.

By being involved from the ground up, business stakeholders are continually contributing to the conversation about the expected value to be generated through software innovation. They will continue to provide developers clarity about the vision and objectives of the company along with the specific business requirements that must be achieved by the software development project for it to be considered a success.

Frequently, the development team is caught up in the day-to-day activities of meeting deadlines, staying within budget, and maximizing utilization—making it difficult to also focus on the software’s business value. Ideally, this concern must be driven to a substantial extent by those individuals, product owners, business units, or departments with the greatest interest in maximizing the value of a software asset.

Stakeholder involvement throughout the entire software development lifecycle provides the best approach to visualizing value, maximizing value flow through the phases, and prioritizing work accordingly with modifications as needed.

To hardwire business value within the phases of the development process, there must also be a high-level of transparency among the stakeholders and developers. Continually being upfront with one another about the impact of decisions, troubleshooting, levels of effort required, and proposed alternative solutions go a long way toward making business value integral to the development of software.

Increased Revenue Generation

To better focus on the expected value that a software initiative will deliver, stakeholders and developers should be thinking about how specific features might translate into added revenue generation for the organization. Increased revenue acts as a strong business value indicator.

For example, features in a software development project that are designed for retaining customers or maximizing existing customer lifetime value will likely result in new revenue generation. Hotels and airlines invest heavily in loyalty programs designed to encourage their best customers to return over and over. Their software has many features that empower this process.

Similarly, subscription-based services such as Netflix or Amazon Prime use their software features to offer free trials to attract customers or upgrade them. Video game app developers do the same by spending money on developing software features that allow users to upgrade free apps or make in-app purchases.

Value-driven software will frequently have features that can be directly tied to revenue generation efforts.

Reducing Costs

The ability of software to lower costs that an organization is currently incurring can be a robust way to demonstrate bona fide business value. One of the key benefits of software is the ability to automate processes that were once done manually. With the elimination of manual output comes productivity gains and greatly reduced operating costs.

Features in software that automate complex and cumbersome processes can also eliminate human error because there are many things that software can simply do better and more accurately than people. With the emergence of machine learning (ML) and artificial intelligence (AI) this is only becoming truer and the cost reductions even greater.

Take for example the rise of algorithmic-driven trading on Wall Street. Much like assembly line workers who eventually got replaced by automatons in factories, exorbitantly paid Wall Street traders―once considered the grandmasters of the universe―are finding themselves being systematically replaced by automated software code that is changing how business is done and who profits from it.

It has been estimated that approximately 80% of the daily moves in U.S. stocks are now software-driven or machine-led. These computer algorithms that trade using mathematical models are so effective that costly million-dollar human traders just keep getting replaced by machines.

Improving Customer Experience

Another great way to guarantee that business value is inextricably built-in to the features of an app is to let improved customer experience (CX) drive software development efforts. When developing customer-facing software—such as an eCommerce platform—the end user's overall enhanced experience is vital.

Customers or end-users generally want unified, smooth, continuous interactions with software. Companies should leverage best software development practices that allow them to listen to their customers and establish visual consistency across all touchpoints to get the very best value out of features.

Forrester, a research and advisory company, found that positive emotions play a key role in fostering customer loyalty. For example, digital retail customers who feel valued with the experience they get show 92% of them stay with the brand and 88% look forward to more spending. Forrester also found that a better customer experience not only boosts revenue but revs up stock prices as well.

So, development teams should focus on producing software with valuable features that build a strong foundation for amazing customer experiences that promote long-term brand loyalty—both of which provide tremendous business value.

Empowering Engineering Talent

Another aspect of getting superlative business value from software development efforts depends on empowering the engineering talent behind it—whether they be in-house or external—because software development excellence ultimately fuels business performance or value.

Research conducted by strategy powerhouse McKinsey & Company found that businesses are achieving the greatest returns from their software investments when they are creating the right environment for developers to innovate and removing points of friction. Industry leaders refer to this capability as “Developer Velocity” or unleashing the full potential of development talent.

McKinsey noted that companies that have mastered Developer Velocity focus equally on empowering the developer, minimizing barriers to productivity, anticipating critical enablers, and aligning investments with customer value.

Quicker Time to Market

This last one is a big deal. In commerce, time to market (TTM) is the length of time it takes for a product, such as software, from being conceived until it is available for sale or use. It is an important concept from a business value standpoint and is sometimes referred to as the first-mover advantage.

Being late when releasing software can seriously erode the market being targeted. Competitors may very well get their first or because of lateness what was once innovative may already become obsolete—especially when it involves technology.

Consequently, software development efforts that reduce time to market as part of its overall strategy are likely adding significant business value. This frequently involves eliminating all waste in the development process such as overproduction of code, overengineering, waiting, and bottlenecks.

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