Innovate 2011: Smarter Software, Better Economics
Here’s my observation about the kickoff session at this morning’s Innovate 2011 event in Orlando, Florida, the IBM conference focused on smarter software and systems:
The best software in the world is everywhere around you — it helps power your car, your refrigerator, your computer, your travel reservation systems, the list goes on. And yet, at the same time, when it’s working at its best the best software in the world is hardly even noticeable!
However, its benefits and economic impact should be noticeable and even quantifiable, and therein emerged the theme for this morning’s kickoff keynote session, one we’ve become increasingly accustomed to in these austere times: Getting more value from less resources.
Though many may have become weary of beating that drum, from a software and systems perspective, however, it seems as though there’s still plenty of additional value to be derived in developing complex applications and systems, if only we would change the way we behave and develop them.
IBM executives Gina Poole, Dr. Kristif Kloeckner, Robert LeBlanc, and Walker Royce all highlighted and introduced several during the morning’s keynote to provide demonstrable proof of how large, complex organizations are realizing that value via three foundational practices: Integration, Collaboration, and Optimization.
General Motors Powers The Volt With Massive Software Reuse
Bill Bolander, a technical fellow for General Motors, took the stage to bring the renowned automaker’s case study to life. GM delivered the electric-powered Volt in only 29 months, a car which has some 10 million lines of code.
Bolander explained to the Orlando audience that there’s “not a better time to be a systems or software engineer” even in these austere times. GM has 16 development application centers across the globe, responsible for everything from code development for the powertrain to the chassie to HVAC and beyond.
This team creates a global software product line for use across the GM vehicle portfolio, and those assets now get applied across various vehicle programs. Because of their integrated, collaborative approach to development GM has seen substantial returns in both time to market and efficiency, without sacrificing quality.
As Bolander quipped, “When you hit the brakes, they need to work.”
That’s certainly how I prefer my car to operate!
As a specific example of the efficiencies, 90% of the software developed for conventional gas cars was reused on the Volt, 80% from their hybrid electric.
The General Motors study was a powerful one in terms of economic value to the organization that practices smarter software and systems development. But it wasn’t the only one.
Danke Bank: Multilingual, Multicurrency, Unified Development
Danke Bank is the second largest bank in Scandinavi and operates in 15 countries throughout Europe, and according to Peter Rasmussen, the bank’s philosophy for banking and information technology is simple: One platform for all.
They have five million customers, 2.4M of which bank via the Internet, with some 670 branches in 15 countries.
But, in terms of simplification, they use one IT platform for their entire organization. Though they still spend some $375M on software development every year, Rasmussen explained their their philosophy was “creating more value for less resource.”
To do so, his team adopted the Rational approach to smarter development, evolving their focus from documents and assets to outcome and results, and moving quicker in the market while addressing the big uncertainties earlier in the development process where they could be more readily (and less expensively!) addressed.
What did they learn? Well, as an example, those projects which had an experienced project manager saw a 50% bottom line impact.
They also improved collaboration among the bank’s key stakeholders, identifying honest measures that would help them focus on the right improvements that would matter most to Danke Bank.
Software Development At IBM Software
So, the question might be asked, do the shoemaker’s children go barefoot? Apparently not when it comes to software development at IBM.
IBM started its own agile transformation in the mid 2000s, where it had 26K developments in more than 70 locations just in its software business. Starting in 2006, Dr. Kloeckner explained, his team started measuring achievement against development goals and incented them to collaborate and share.
He also empowered them with software lifecycle tools, to help make changes stick and pervasive. “Tools, not rules” Kloeckner explained.
Revenue per headcount saw a net gain of 15% (how IBM measures productivity), and reduced scrap and rework by 4.5%. The company also avoided $300M in maintenance costs, and asset reuse shot up dramatically, with the code repository accessed some 70K times per week!
Walker Royce explained the ultimate moral of this story. Better software economics is a result of measured improvement for improved predictability, and agility for improved operational efficiency.
Thsose organizations who better measure and manage their development process better manage uncertainty, and in turn, drive costs down through more accelerated integration testing and measurement of cost of change trends.
As Royce summarized, “Your ability to respond quickly is a key differentiator.”