Delivering value from IT projects: What we can learn from start-ups

‘The times they are a-changin’ are lyrics written before I was born, but they are extremely pertinent in an age where technological innovations are changing the world on a daily basis.

Innovative ideas – think Uber, AirBnB and Spotify – have challenged the status quo, shaken up industries and won the loyalty of millions. In this brave new world, “It’s not the big that eat the small … it’s the fast that eat the slow” if I may borrow a quote from Jennings and Haughton [1].

If they’re smart about it, established organisations can learn a great deal from the way start-ups execute their ideas. Applying some of these strategies can help companies ensure they are delivering optimum business outcomes via their IT projects.

Utilise the ‘Minimum Viable Product’ technique

Eric Ries describes lean start-up technique Minimum Viable Product (MVP) as a “version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort”. In other words, each new feature or product created should be backed-up by data that demonstrates a business challenge, need, or risk is being addressed.

For example, to ensure IT solutions deliver the desired outcome, they need to be tested among users early in their development. The logical stage to conduct this testing would be during Proof of Concept (POC) or Pilot releases as, to get to this stage, the investment has usually been pretty minimal from a time and resources perspective. This allows for early establishment of what Mr. Ries describes as ‘the feedback loop’ between users and developers.

Leverage cloud computing

Most start-ups will utilise cloud computing to build and test their offerings amongst users. This makes absolute sense when you consider the financial commitments are low when compared to the cost of acquiring hardware. Additionally, the team can be up and running in minutes. The time has come to scale up once the POC has proven successful and it makes business sense to continue.

According to Gartner’s 2015 IaaS Magic Quadrant, the cloud market “is dominated by only a few global providers – most notably Amazon Web Services, but also increasingly Microsoft Azure and Google Compute Engine.” There are others, but in Australia the first two seem to be the most popular.

Agility in a Waterfall environment?

Start-ups tend to follow an ‘Agile’ software development methodology, as it aligns with the kind of rapid development found in environments with evolving requirements, reduces the “distance” between users and developers, and places value on working software. However, truly integrating Agile methodology into the processes of organisations that follow the more traditional Waterfall software development methodology is not an easy task.

While purists at either side of the methodology camp might disagree, according to the CAST 2014-15 CRASH report, which evaluated 1,316 applications from 212 organisations in 12 industry sectors, the “health factor scores for the mix of Agile and Waterfall are higher than for Agile or Waterfall approaches used separately.”

The report further states that for the critical applications of large businesses, “the mix of Agile and Waterfall methods produces greater structural quality than other development methods … The superiority of the Agile/Waterfall mix suggests that for these types of applications the greater emphasis on up front design leads to better scores for the Robustness, Changeability, and Security of the application, and to a smaller extent for its Performance and Transferability.”

Learn to fail

There is one more crucial point I would like to make – we should all learn how to fail early.

Over the years, I have seen a number of organisations spend hundreds of millions of dollars on projects that have little chance of being delivered successfully. As Doug Hall put it, sometimes “the only barrier to failing fast and failing cheap is your ego. You must be willing to fail, fail, and fail again if you are going to win in today’s competitive marketplace. Remember, even if you’re falling flat on your face, at least you’re still moving forward.”

Measuring and evaluating projects throughout their lifecycle is essential to ensuring they deliver real business outcomes. We live in a world of constant technological innovation and change. By leveraging lessons learned from the start-up community, applying appropriate methodologies and checkpoints, smart companies can deliver demonstrable better business outcomes from their IT projects.

[1] Jennings J & Haughton L 2002, It’s Not the Big That Eat the Small…It’s the Fast That Eat the Slow: How to Use Speed as a Competitive Tool in Business, HarperCollins, New York