By Leonardo Mattiazzi, VP International Business, Ci&T
In the first part of this series of posts, I discussed how the software development process became more standardized over time, creating the idea of the “software factory.” As development became more standardized, individual IT demands became more personalized. In this post, I will discuss how software development shops can steer away from the factory approach to respond to customer demands.
If the factory model does not appear to be compatible with the current IT needs, why is it still the predominant option? Looking at this prevalent situation, with the industry marching towards mass-production, and users clamoring for individualization, it comes as no surprise that a recent Gartner Research report appoints the lack of innovation as the single biggest disappointment of CEOs in regards to outsourcing engagements.
Of course, not everything that IT does must be innovative. In fact, the largest portion of IT budgets is destined for maintenance and of course the more you can reduce those costs the better. So, let’s try to examine this from a broader perspective.
If we look at the customer’s (in this case, an enterprise) needs (in this context, IT services) with Abraham Maslow’s lenses, we could see it as a pyramid, with “Survival” at the bottom, “Success” in the middle, and “Transformation” at the top (reference to the book “Peak: How Great Companies Get Their Mojo from Maslow,” Chip Conley, 2007).
At the “Survival” level, all that a provider needs to do in order to be successful is to meet the customer’s basic expectations. At this level, the IT organization is seen as a cost center, and its main goal is to reduce costs.
And soon, when the industry becomes even more crowded and we enter the third stage, only the most imaginative providers fit the bill and come out on top by meeting those unrecognized needs at the “Transformation” peak of the pyramid.
At the “Success” level, a successful provider must address the customer’s desires, which go beyond the basic expectations, but can still be understood from explicitly asking the customer: “What would you like to have?” or “What would you like me to do for you?”
At the “Transformation” level of the pyramid, a successful provider addresses unrecognized needs. In other words, one must “surprise” the customer, pretty much like Chef Remy surprised the food critic Anton Ego in the movie Ratatouille. At this level, IT is seen as a source for growth. Working at this level means seeking self-actualization – as a company, and as individuals.
However, it’s not only the customer – the industry also has a maturity curve. When the industry is new, as IT was in the not-so-distant past, there are fewer competitors, and meeting acceptable standards (basic expectations at the “Survival” level) can yield good results.
But after some time the industry reaches its next phase. The market becomes increasingly crowded with many companies providing the same services, and differentiation becomes the word of the day. We can see a direct parallel between differentiation and meeting customer desires at the “Success” level.
And soon, when the industry becomes even more crowded and we enter the third stage, only the most imaginative providers fit the bill and come out on top by meeting those unrecognized needs at the “Transformation” peak of the pyramid. This parallel helps us understand why so many providers are still trying to meet expectations or explicit desires, while so many customers are requiring transformative innovation.
Interestingly, Jeffrey Hammond, principal analyst at Forrester Research, establishes three archetypes of software development shops:
- Solid Utility: The “Software Factory,” with process and tools over people (ITIL, heavy and standard tools), individuals are interchangeable (thus, these companies see high turn-over). It works well with shrinking budgets where IT is seen as no more than a cost center – but this is bad for speed and growth/value generation.
- Trusted Supplier: The “General Contractor,” where project management alone will solve the problem. There are also functional silos (PMO, QA, EA…), and CMMi certification. This works well in large development shops, but it may slow down response to new technology and still considers individuals as interchangeable. If the metaphor for the solid utility was making cars, for the trusted supplier the metaphor is building a house or a city.
- Partner Player: Part of the business, as opposed to serving the business. These shops can be known as a “Craft shop,” consisting of high-performance teams, and creative individuals where results matter more than process.
It’s not difficult to see how these archetypes relate to the customer pyramid. Throughout our 17-year history, we at Ci&T have to admit that we have been all three levels at some point. However, we have been fortunate enough to create an environment that had the desire (and the foresight) to aspire for more, despite enjoying success while at both the Survival and Success levels, while so many other companies got caught in the success trap – unable to see that working at the “Survival” level is not enough anymore.
Today we are at a point where we enjoy long-term, collaborative and creative relationships with our clients, providing peak experiences through high-performance development teams – which puts us in the Partner Player box. How can we say that we are providing peak experiences? Because we hear things like “You guys are magicians;” “I don’t know how you do it;” “You’re coming with ideas and challenging our thinking.” Is this too much to expect from an outsourcing provider? We don’t think so, and that’s what drives us.
In the last part of this series, I will discuss how we reached the Transformation level and began creating these peak experiences for our customers.