Leveraging the “Agile Edge” for Innovation within a Hybrid IT Model

November 20, 2015 § Leave a comment

The agile edge capability within a Hybrid IT model is what we are calling the environment that allows for both rapid experimentation and elastic scaling to cope with exponential adoption. It enables faster IT delivery and increasing innovation from both internal employees and external partners or ecosystems. This requires major change of culture, procedures and technologies. Enterprises will need to shift away from rigid methodologies and processes to those which enable agile and collaborative development (e.g. hackathons). Besides Platforms as a Services (PaaSs), this could include the use of IBM Design Thinking (learn more here) which is based on user focused development and highlights the user experience rather than the product itself though frequent updates and feature releases. Additionally, for an enterprise with mature Agile Edge capabilities, venture funding partnerships may be created which allow new growth models.

Below is a detailed description of each level within the Agile Edge with technology examples and key dependencies; special thanks to Rashik Parmar for assisting with the examples and Mark Tomlinson for helping review the content and providing the illustrations which are included within each level.

Level 1 — Initial

Level 1 is the initial point for enterprises seeking to create an Agile Edge and this could be characterized as the “as-is” environment for most enterprises. At this level, strict development methodologies (such as waterfall) and homegrown and managed omni-channel impede agility as processes and proprietary technology create silos and development delays. Additionally, the existing technology at this level may prevent the enterprise from becoming more agile. An example depiction of this scenario is depicted in the image below where a business executive faces critical IT delays when attempting to launch innovative new products and services.

For example, rather than pushing frequent updates to their mobile applications, an enterprise at this level may wait for quarterly or yearly releases to better align with the in-house development lifecycle. This may be due to the time it takes the development teams to create updates (i.e. the time spent on gathering requirements, designing the solution, implementing the update, and testing the update which is required by the waterfall methodology) or the manual work associated with understanding that an update is needed in the first place! Contrast this to a scenario where built in mobile feedback functionality is integrated with the internal development team’s QA system through an API so that continuous feedback is available and on the spot updates can be made based on common user issues. This scenario would require a shift from product-focused releases to user-focused releases (IBM Design Thinking) and also the technology expose internal APIs (such as those for mobile QA). Some of this is addressed when an enterprise moves to level 2 on the Agile Edge framework.

Level 2 — Managed

Example objectives at this level are:

  • Faster IT delivery enabling quicker time to market
  • Increased IT appropriateness and value to business innovation
  • Increased end user satisfaction with IT delivery

These objectives enable enterprises to start viewing IT as a core element supporting both agility and innovation through agile development and frequent function release. By adopting the right methodologies and tooling which create a more flexible development structure, IT is able to act in response enterprise needs in a quicker fashion which allows the first two objectives to be achieved; examples of this include establishing agile methods and tooling (e.g. Extreme programming, SCRUM, iterative feedback tools, software lifecycle management tools, etc.). Additionally, to achieve increased user satisfaction with IT delivery, enterprises should adopt user-centered design practices. An example of this is IBM Design Thinking which assists in “identifying and ideating on the aspects that make a solution desirable to its users,” with the result being solutions which rely on the end users’ needs (e.g. in the initial example from level 1, critical updates are pushed out as required by the mobile application users rather than based on product release cycles). Building upon the illustration from level 1, agile practices like Design Thinking can assist in the agile transformation by helping realign IT to the needs of the business and its’ users.

Reaching this level is more about a culture shift within the organization so that teams are empowered to take action based on what is needed rather than what a process may dictate. Additionally, from a skills perspective, enterprises need to ensure that employees are equipped to automate as many processes as possible. As a result, many of the capabilities at this level are closely dependent on the initial levels (2–3) of the DevOps capabilities which is another element within the Hybrid IT Framework. These initial levels focus on automating processes and deployments to remove silos between the development and operational sides of IT. Another key dependency is the Business-IT Partnership capability, especially at level 3 and above, which focuses on IT planning driven by key business needs.

Level 3 — Defined

Example objectives at this level are:

  • Increased innovation based on ideas from employees
  • Quicker IT engagement to realize ideas through APIs
  • Enabling the prerequisites to support externally driven innovation

At this level, enterprises are able to build upon the culture shift from the previous level to create an IT environment which allows the realization of ideas. Besides the IT teams now working with the business, they are able to enable new ideas through rapid prototyping through tools like Platforms as a service (PaaSs).

The first part of this is utilizing forums such as internal hackathons to gather ideas from employees (related to objective 1). The second part is the use of the right tools and technologies to support the development of the ideas and form the foundation to enable the externally driven innovation in the higher levels of this Agile Edge capability (related to the last 2 objectives). At this level, using and exposing APIs to access various functionality is critical which means that a service based architecture design is a necessary pre-requisite to enable agility. As an example, if an enterprise maintains a monolithic system to track credit card users and the points earned for every dollar they spend, future innovation (either internal or external) is difficult to realize if services are not available to access functionality related to the credit card users. Instead, development solely depends on the enterprise IT teams in charge of the system. In contrast, if the right services are available to interact with the system, ideas such implementing “pay with points” functionality on 3rd party businesses becomes easier to implement as anyone with access to the API can do the development work. Other examples of the types of activities needed to move to level 3 are: establishing a Platform as a Service (PaaS) and implementing API catalogs to manage usage. It should be noted that a PaaS is important for its ability to help with access to innovation (e.g. providing rapid access to the services and additional technologies such as IoT, Cognitive Analytics, etc).

This is also where enterprises may consider integrating hybrid environments (e.g. system of record with systems of insight) so that new, born on the cloud applications can interface with legacy applications. Within this level, a key dependency is the Integrated through Data capability especially at level 2 or above since APIs being available is a key part of realizing the likelihood of innovation from an internal and external perspective. Additionally, as internal functionality gets exposed through APIs, an organization at this level will require an effective security policy with established foundational practices (level 2). As an example, this may require an enterprise using PaaS capabilities through a “sandbox” environment until the IT teams have been able to conduct a detailed assessment. Finally at the organizational level, enterprises will have to continue building upon the culture change from level 2 by focusing on practices which enable opening up the enterprises capabilities to third parties outside of IT. As capabilities are exposed, an ecosystem can emerge, but enterprises must realize that while there is a possibility of cannibalization, when properly managed, a new revenue stream is provided as well.

Level 4 — Quantitively Managed

While the previous 3 levels were primarily about the culture shift needed to enable the agility and the tools required to create the innovation platform, the final two levels focus on the external value provided by having a matured Agile Edge. Example objectives at this level are:

  • Enhanced brand reputation and differentiation through hackathons
  • Increased IT impact on new revenue streams
  • Enabling the foundations of an external ecosystem

This level builds upon the innovation enablement work done in level 3 by creating a system to fund internal innovations and expanding the scope of hackathons to external parties. The former requires developing internal venture funds so that employees are able to pursue their ideas. The latter is similar to the internal hackathons conducted previously using exposed APIs, but now enterprises can now begin holding external hackathons as well achieving objective 1. This can then be expanded as external APIs are published creating new revenue streams through robust ecosystems (enabling objectives 2 & 3). Additional activities required to evolve to this level include developing external APIs, implementing tools to manage external APIs (security, billing, etc.), establishing a network of external hackathons, and creating the management framework for internal venture funds.

Similar to the previous level, the exposure of services through APIs is critical as external innovation is difficult to realize without the capabilities for 3rd parties to integrate with. Additionally, as more external events are held and APIs are exposed, proper security will be necessary to ensure data safety. This is related to the Effective Security capability, especially level 3 and above, which should be viewed as one key dependency. Besides the basic security dependencies mentioned in level 3, enterprises at this level need to ensure that external access to IT functionality does not impact sensitive or proprietary data. This can be achieved through proactive security policies which monitor network data and usage to uncover suspicious traffic or requests. As an enterprise matures within the Agile Edge framework, security may evolve from simply monitoring and identifying unusual traffic to understanding when the system is under an attack (security intelligence algorithms).

Finally, from a pre-requisite perspective, enterprises should begin piloting API management tools which can not only aid with security (authorization/authentication of API usage), but form a monetization strategy as well. Because many of the cultural shifts and organizational impacts were realized by the first 3 levels, enterprises at this level need to focus on refining items like employees’ automation skills and service creation and exposure. Because of the investments being made, it is important to start measuring the impact of these efforts although innovation based metrics are difficult to standardize.

Level 5 — Optimizing

Example objectives at this level include:

  • Increased value through new ecosystems and venture funding models
  • Increased range of ideas through external venues
  • Enabling disruption through IT

As the title of the level states, enterprises at this point optimize the capabilities introduced in the previous 4 levels. By expanding the external APIs trialed in level 4, enterprises at this state have a robust public API set which allows partner ecosystems to emerge and a new range of ideas to emerge achieving objectives 1 and 2. Additionally, the internal venture funding model is expanded so that external parties are able to realize ideas formed within the ecosystem space. This aligns with objective 3 as enterprises can invest in potentially disruptive ideas which are enabled (at least partially) by traditional IT capabilities. As mentioned previously, all proceeding capabilities are optimized at this level meaning that enterprises have become well skilled in agile methodologies placing the user at the forefront of solution design. Additionally, defined models are in place to expose, manage, and monitor APIs. Enterprises at this level may have a federated API catalog offering multi-tiered pricing models for external usage which is optionally integrated to a defined PaaS. These APIs would then be leveraged at hackathon programs to create solutions which would be a part of the partner ecosystems. For example, using the initial credit card example mentioned in level 3, a plug in could be created so that any small or medium business is able to easily add “pay with points” functionality to their check out pages. The plug in may have a one-time install cost followed by an ongoing fee based on the price of the transaction; this creates a new revenue source for the enterprise as well as the developers from the ecosystem.

Other standard activities at this level include a fully expanded API catalog, established ecosystem management approach, defined hackathon program, and an expanded venture funding partnership and management model. Building upon the dependencies mentioned in the previous levels, a level 5 enterprise would be expected to have the following related capabilities at level 2 or above: DevOps and Effective Security while having the following at level 3 or above: Business-IT Partnership and Integrated through Data. Finally, at this level, enterprises have built upon the skills and metrics mentioned in level 4 to have an experienced agile workforce, fully defined service creation and exposure model, and an optimized set of appropriate innovation metrics. As seen in the graphic below, the sum of these practices allows IT to be transformed to fully support and enable business innovation by adopting the right agile and collaborative practices.

As seen above, each level is characterized by key activities and dependencies which enable specific outcomes. The process to evolve from initial level 1 to the optimized level 5 is inherently different for each enterprise but the framework helps provide a guide to transform traditional IT into enablers for innovation.

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