How can the IT satisfy the ever-changing business needs?

We have all heard it at one point that IT developments, or the lack of them, are blocking the business to evolve and to deliver the expected results within the expected timeframe. If this is such a common phenomenon among companies, why isn’t there a one-stop solution for this?

The easy answer is that the underlying issues are not always the same. Although in our recent projects we have found one big area that companies are lacking, that is a proper demand and release management function.

First we must clarify what these functions mean, and why they are so relevant for the companies.

What exactly is demand management?

Think about a construction site, where your future house is about to be built. You are the customer, who wants the house to be shaped to your needs and the construction company is the supplier, who listens to your “dream house” ideas, then tries to make the plans and build the house accordingly. In the beginning you describe a house with a huge fireplace, outdoor swimming pool, sauna and extra smart equipment that makes the interior very comfortable and homey. This is your demand, which is then handed over to the construction company, who examines its feasibility on the given site, neighborhood, local regulations, etc., comes back with many questions regarding the details that you haven’t thought about (pool size, type of flooring, heating, windows, lighting, etc.) and finally provides a time plan and proposed fee for the construction work.

As you can imagine, even if your needs are feasible, the length and cost of the construction are very dependent on the details, which you haven’t thought through in the beginning. At the end of a long and tiring negotiation phase, you might end up with a house with just an electric fireplace, and without a swimming pool and sauna, as they are not feasible or affordable.

Customers tend to be very creative, exaggerated, but very high level, when thinking about their needs, whether it is related to their future home or to IT functions, which support their daily work.

In our experience, we see that “customers” (i.e. usually business or other IT departments, who order IT developments from their internal IT developers or from external suppliers) are way too creative and ad-hoc, as they always want to switch to the latest technology in a very short timeframe without any medium- or long term plans. The phrase “want it all and want it now” fits well here, that can lead to unnecessary, very expensive and long lasting development projects. On the other hand IT departments can also be too indulgent and not well-prepared for handling customer needs, which results in IT-business conflicts and the emergence of shadow ITs.

As an IT leader, in order to keep your “customers” on the ground and handle these demands effectively, a strict IT department and a regulated demand management process are needed. Our approach at PwC Hungary is designed to support you in these challenges, while facilitating the cooperation and partnership between business and IT.

1. Strict IT department - The IT department must function as a brake and filter for the vast amount of incoming business demands, so only well-established ideas are further analyzed and sent for development. This is a very crucial function of IT departments, as:

• from IT point of view, you don’t want to burn your own resources on analyzing demands that clearly won’t be developed in a later phase;
• while from business point of view, an efficient demand process with consistent filtering and transparent resource allocation can significantly decrease time-to-market and increase the solution quality.

2. Regulated demand management process - A regulated and well communicated demand management process is also critical, so all related players are aware of the next steps, it is transparent to them and they know why a demand gets rejected or accepted. One of the most important message of our approach is that you should only talk about demand, if it is a clarified business idea that can be separated into groups of business requirements. It has all the required attributes for further analysis by IT resources, and it is handled as a candidate for becoming an IT implementation project. The process must also include the time plan and cost estimation for the development phase, which support the management to make a profound decision whether to start and when to start an IT implementation project.

These are the cornerstones of an effective demand management process, however there are many other criteria as well, that you need to take into consideration when reshaping your demand management, such as an appropriate project portfolio management, customized scoring model, solid decision points with transparent entry and exit criteria, proper business analyst competencies and so on.

In overall, by implementing such a sound process, you can certainly save on your OPEX, CAPEX and you can maintain an effective partnership between the business and IT.

How does release management support the business to succeed?

If the specifications for your “house” are mutually agreed upon by both the business and IT sides, a project can be initiated. To best understand release management you should consider building a block of flats or an apartment building, where everyone can have their own requirements, but you can only move into the new house once. Translating this to IT language, our understanding of release management is that it is a group of IT projects that share IT resources (technical and human) for the sake of higher efficiency, might have system connections, and are delivered along the same schedule (development, testing, Go-Live). If you take a complex IT architecture, where many systems are connected via interfaces, the developments must be aligned, meaning they must be grouped into releases, to ensure that the parallel developments are not conflicting. During our projects we found, that in many cases companies do not follow any set development calendar, the cross-dependent, inter-connected developments are not tested together and often the production incidents, that could have been avoided, cause operation malfunctions.

What benefits does constructing an apartment building have compared to that of a separate house? Even though you would have to compromise on several points, you will save money on construction costs, some building materials and also on the operational costs of the house. Just like that, even though a set release calendar could look like an administrative burden, which is not helping the business to reach its goals, and it is also hindering the IT to deliver flexibly. This might be true if we take a simple IT architecture. But as soon as projects affect and require multiple systems to be developed at the same time, this “burden” will be very beneficial for the quality of the developments.

Some cornerstones of release management, are:

• a set release calendar that is approved by both the IT and the business side,
• time-boxing is the main driver for a release, meaning that each release has a fixed timeline and set dimensions for resources, systems that can be filled up with business content,
• a clear responsibility matrix, that ensures that the tasks are not dropped among the many stakeholders,
• clear and measurable quality gates, that ensure that connected projects are always at a similar development level,
• transparent and clear communication between business and IT.

If we get back to the business side’s fear, that this is all just going to slow down the development process, the answer is the multi-speed IT development method. It is clear that the business only wants quick developments for certain systems (usually online or mobile apps) and in case of more robust systems, like an ERP or billing system a more thorough testing and longer development process is completely acceptable. Adding up these ideas, you might have already guessed what multi-speed IT means. In short, the IT landscape is divided according to the development speed expectation and different release types are created to serve the different needs. This way it is ensured that the business gets what they want and the IT can perform proper testing for the more complex developments.

What do we offer?

We at PwC Hungary’s Technology Advisory offer our clients (1) a thorough review of their demand and release management process resulting in a set of improvement suggestions and (2) further on-site support in the planning and implementation phase of the new approach and processes.

Our findings should have a positive effect on the followings:

• IT resource usage - Better planning and execution means more efficient usage of the IT resources.
• IT-business communication - Better cooperation between IT and business resulting in a true partnership, instead of the finger pointing scheme.
• IT development time planning - Enhanced predictability of IT implementation that supports the business to better plan new products.
• IT development budgets - Enhanced predictability also improves the capability for development budget estimations.
• Development Quality - Following the processes ensures better quality delivery in the end, resulting in a better bottom line.
• Time-to-market - Based on our findings the IT development throughput can be significantly increased and thanks to the set procedures and quality gates the whole development process can be sped up.

Contributed to this article: Dániel Kiss, Senior Manager at PwC Hungary's Technology Advisory.