Accelerating Delivery of Value

Accelerating Delivery of ValueRyan D. Hatch

October 2014

rdkhatch

#Agile

About RyanFamily & Background

About Ryan

Co-Founder, Dynamis

Recovering Developer

Lean Product Strategy & Agile Coach

Focused on Innovation, Software Startups

Helping teams accelerate new product growth

Story Time

Gold Ore Mining

Meet Jim

Story Time

Jim’sCompany

Gold Ore Mining

Built Mine Price Drop

Gold is invisible.

only1 oz gold

63 tons of rock. Long, expensive process.

Challenge: Must find rocks with highest value.

Jim Burnellholding his X-ray gun

Fast Feedback. Before Investing.

Jim Burnellholding his X-ray gun

Fast Feedback. Before Investing.

Use Fast-feedback InnovationCreate Value

Playing by a new set of rules.

The Innovation Challenge

Speed of Business is Accelerating

Speed of Business is Accelerating

B2B B2C

Raw Materials

Cash

Product

The Goal of IT = Help Business Win

IT & Software

Sales Marketing

DistributionOrder

ProcessingAccounts

Receivable ProductsFulfillmentCustomer Support

Management Team

Shareholders Customers

You have huge impact opportunity

Your Company

Value Flow - Capturing Business Opportunity

IT Delivery

Business

Customer’sGoals


IT Delivery

Business

Customer’sGoals

#1 Responsiveness (Time)

#2Value

1.) Fast and Reliable Delivery

Accelerating Value in IT

Drawing Exercise

gettyimages.com


What did you draw?


Even with the best requirementsWithout Visibility… Outcomes will vary.


Reality:As Humans – We need continuous visibility & feedback.We need to see & touch – as we create.

PainterIce sculptureChainsaw sculptureCar clay prototypeSand sculpture


Risk IncreasesBig Bets = High Risk

Time


Moving Target

Technology Change

Customer Expectations

Solution RiskSystems Integration Risk

Customer Needs

3rd Parties


Closer Targets


Closer Targets


Closer Targets


Closer Targets


Closer Targets


Closer Targets


Releasing Faster is not enough to win

Story - Southeast Wisconsin Company

Consequences of Poor IT DecisionsDelivered without Minimizing Risk

Business Requirements

Develop Test Deploy Production

CustomizationsNo Automated Tests

100 Testers Multiple ArtifactsModifying Environments

Production IssuesTicketsCustomers Frustrated

Fast without reliability = Slow

You likely also see:

• Systems become Fragile• Protect Fragile Systems – Create Bottleneck• Tickets, High Wait Times• Production Issues• High Defect Rates• Urgency – Clients & Hot Fixes• Teams not Aligned• Testing Time Increases or Testing Less• Business has to promise to fix mistakes• IT under increasing pressure, deadlines

When you see:

• Fast value (without IT reliability)• Manual Testing• Lower & Upper Environments don’t match• Multiple Artifacts to Deploy• Version Control for only code• New Environments take long time to spin up• Slow feedback to developers

Watch Out For…

BusinessResponsiveness

Reliability

Fragile SystemsHigh Defect Rates

Over Promise CustomersUrgency

Careers on the Line

Fragile SystemsSlow Delivery

Dissatisfied CustomersBusiness Failing

Agile & DevOpsHighly Responsive

Highly ReliableHappy Customers

Enables Innovation & Value

StagnationSlow Delivery

Customers FrustratedLosing Marketshare

IT Maturity Model

AchievingFast and Reliable Delivery

Mockups

Customer HackActual Application

How well would thissolve your problem?

Focused on Sales & Business Value

Business

IT Delivery



Customers

Development Capacity – almost 100% New Business Value

Business

IT Delivery



Customers

Cost of Failure Increases Downstream

Unplanned Work – Steals Business Value

Business

IT Delivery



Customers

Defects, Urgent Items, Ticket Wait Times, Unplanned Work

New Business Value

Deployment PipelineStop the Line. “Build Quality In”

Compile

Unit Tests

Smoke Tests

Basic Scenarios

Acceptance Tests

Scenario Tests

Edge Cases

Browser Tests

Performance

Load Tests

Deployto Production

Feedback TimeFastest Slowest

Stages & Distribution of Tests

Slowest

Fastest

Feed

back T

ime

Deployments

Code

DatabaseConfiguration

Files

OS & Libraries

Network

Environment

Security Patches

Application

DB Migrations

Secret Keys

Module 1

Module 2

Module 3

Environments

Local Dev Dev QA UAT Staging Production

Lower environments should mirror Production

Deploy Often to make it Painless

From This To This

Continuous Delivery

source: CollabNet

Development Production


RequirementsIntegrate & TestComponent A Component B Component C

What’s wrong with this picture?

Sprint 1-3 Sprint 4-6 Sprint 7-9 Sprint 10-12

Customer Delivery


Requirements


Customer Delivery

Milestone 1Requirements


Customer Delivery

Milestone 1Requirements

P D C A


Customer Delivery

Milestone 1 Milestone 2Requirements

P D C A


Customer Delivery

Milestone 1 Milestone 2 Milestone 3Requirements

P D C A


Customer Delivery

Milestone 4 MaintainMilestone 1 Milestone 2 Milestone 3Requirements

P D C A


IT Delivery

Business

Customer’sGoals


#2Value


ITDelivery

Business

Customer’sGoals


Faster Business ResponseFaster & More Reliable Releases

• Fast Feedback Cycles• Stop Defects Upstream• Release to Production Often• Make Production-like Environments Available Upstream• Integrate Early• Single Build Artifact• Configuration – NOT Customization• Monitor Production Proactively• Get Customer Involved Early

Takeaways

MOVE FASTAND

MINIMIZE RISK

2.) Delivering Business Value


ITDelivery

Business

Customer’sGoals

#2Value

$ Value / TimeTime

Velocity is not Value

Focus on Business Impact, not Velocity

Is our customer able to accomplish their goals?

Are we getting feedback from real customers?

Are they even using our features?

How can we run experiments to learn?

cinderellascrummaster


Success Story Maersk IT = $150M / year, 20 development teams

Prioritization process was poor, low value delivered


Success Story MaerskTop 25% 1000x more valuable


Success Story Maersk

Business Conversation - Value is measured in $

1. Revenue Increase2. Protect Existing Revenue3. Decrease Existing Costs4. Avoid Future Costs

Creating Project Success

Cost of Delay improves prioritization

$150/m

4m

$150/m

2m

Which wins?Business Value

Duration

Creating Project Success

Cost of Delay improves prioritization

$150/m

4m

$150/m

2m

Winner !Cost of Delay

Duration


Cost of Delay to Improve Prioritization

Much LowerOpportunity Cost

How to value what we don’t know?

Assumptions

Business Value Flow

Value Flow

Business

IT Delivery



Customers

Myth: Build it. And they will come.

Truth

You build it, and no one cares.

Customers are often biggest risk. Not Technology.

Product development is a discovery process.

Sell before you Build.

Solution: UnknownProblem: Unknown

?Agile Product Development

Solution: UnknownProblem: Unknown

Customer Development Agile Product Development

CustomerCommitment

Lean Startup

Learning Sprints

franciscopalao.com

Innovation Accounting

Growth Hacking Experiments

Flow Metrics

# of Customer Interviews

# of Hypotheses Tested


ITDelivery

Business

Customer’sGoals

#2Value

$ Value / TimeTime

Test for Value. Then Execute.

Accelerating Delivery of ValueRyan D. Hatch

October 2014

rdkhatch

#Agile

Accelerating Delivery of Value

Software

gold jim

gold mining processing

ounces of gold

mining ore

hes mining

year market price of

small company

hauls lots of ore challenge