Developing a product as software: why agility is no longer an option.

How Agility Is Changing the Way Companies Operate

By Michele Lanzinger, SAFe Strategic Advisor at Scaled Agile, and Carmine Paragano, Head of Enterprise Agility & Program Governance at NTT DATA

To remain competitive in the market, companies invest in innovation, but having an innovative product alone is no longer enough to outpace the competition: today, it's even more crucial that the innovation process is supported by structural and organizational changes aimed at greater flexibility. Without this aspect, the realization of innovative products can be slowed down or may be less aligned with the actual needs of customers. Moreover, the context in which companies compete today is extremely complex and constantly evolving, making an adaptive and agile approach even more indispensable. Software and new technologies such as artificial intelligence are becoming integral parts of many industrial products, necessitating greater responsiveness than in the past, allowing companies to change course within weeks, not months or years as was traditionally the case. For this reason, a concept that has already established itself in the software field and will characterize the near future of the product world is now emerging in the industrial world: agility.

The SAFe Framework: Developing a Product becomes as Agile as Software

Technology is evolving at an increasingly rapid pace, which means that the path of technological innovation is also much faster than in the past and, therefore, much more complex to manage without the necessary agility precautions. In some sectors, such as the automotive industry, it is not only necessary to bring products to the market more quickly, but also to ensure that the product's associated experience can be updated over time, preventing it from becoming obsolete after just a few months. Companies must, therefore, be able to change their strategy entirely in a short period, resulting in organizational and mindset changes before even technological ones. The product has become a service, known as "servitization." The product evolves quickly with updates delivered directly "over the air," in real-time, and at minimal cost. Consider our cars, which undergo restyling every one or two years, requiring a revision of the entire production process and real-time software updates thanks to onboard diagnostics systems.

The Scaled Agile Framework (SAFe) was specifically created to enable this type of agility in managing change because it allows the management of complex initiatives involving various teams, promoting seamless communication and constant alignment among the various roles involved, ultimately leading to faster goal attainment. The SAFe framework is not just a set of mechanisms to apply but proposes a genuine change in the mindset of organizational management and decision-making processes. While in the past, the market was slower, and the time required to pass through all the levels involved in a decision did not significantly affect the success of a product or service, today, an adaptive approach is necessary. This approach allows for changes in direction during the development phases based on evolving customer needs. To fully benefit from this approach, companies must not merely adopt it for individual initiatives; they require a transformation in the way the organization operates, touching all processes from ideation for a new product to its market launch and subsequent evolution. Initiating a transformation that involves all or most of the processes is one of the main challenges for companies, where different areas often operate independently. Being able to quickly reconfigure strategies, processes, and business models to seize opportunities and deliver greater value through innovation enables companies to achieve true business agility, as shown in the diagram below. This necessitates an organization based on the product and capable of providing services continuously, evolving them in line with contextual changes, shifting to an organizational logic based on Value Streams, streams of value.

Although every industry has its specificities, the world of product development is beginning to adopt logic increasingly similar to software development: it involves swiftly reaching a prototype to test the market's response before making significant investments, quickly understanding whether it's worthwhile to proceed with further developments or how to adapt. All of this happens in significantly shorter timeframes compared to traditional practices.

SAFe: Agility is Not Just for Large Enterprises

One might think that this approach is primarily dedicated to large companies, but that's not entirely true. Certainly, a transformation journey of this kind for a structured company with many employees brings about non-trivial complexity to manage and has a significant impact on its way of operating. Startups, for example, already have a mindset very close to what the SAFe framework aims to promote, as they revolve around a product or service. They see this new way of collaboration among different company departments as a perfect alignment tool, with the advantage of having very short feedback cycles.

As the concept of agility, originally born in the software development world, is spreading to product-based companies.

To keep up in a market that is constantly changing at an accelerated pace, this type of transformation is a necessity that companies, regardless of their size or the products they currently offer on the market, can no longer ignore. Even small companies must embrace change because even if they have a successful product today, only by continuing listening to the market they can evolve their offerings according to emerging needs and new technologies.

The risk that resistant companies to change face is the inability to adapt in time, resulting in a loss of competitiveness. Staying up to date goes beyond just acquiring new software or implementing technology; it requires a much broader organizational transformation that enables the flexibility to change strategies while continuing to create value for customers.

Change is no longer an option: understanding this is already a significant step toward the future.

The collaboration between NTT DATA, one of the largest technology players, and SAI, the holder of the SAFe framework, can support companies of all sizes in their transformation to maximize the benefits of a Business Agility-oriented organization.