Digital technologies are reinventing the rules of businesses. Traditional ideas for example, that large businesses grow slowly, have been confounded by Amazon’s continual rapid growth, as its e-commerce sales are expected to increase 32% in 2017. Software-driven automation and predictive software means organizations can increase efficiencies, hold substantially less inventory, and respond in real-time to customers.

However while in previous years, the speed of business has consistently increased, doubts have slowed the adoption of some technologies. Security concerns for instance have meant the spread of smart devices has been slower than what was expected. Enterprises took a similar wait-and-see approach to other new technologies such as blockchain and artificial intelligence (AI). Belatrix’s machine learning survey for instance at the end of 2016, found that just 12% of organizations had already started a machine learning initiative. 40% meanwhile were investigating, but hadn’t yet started. From the enterprise perspective, there remained some willingness to hold back investment and question the transformative power of many technologies.

However, the theoretical benefits of new technologies are rapidly giving way to “real world” deployments. By one estimate, Amazon shipped more than 10 million Echo speakers in 2017. Linked to other smart home devices, it is likely that hundreds of thousands, possibly millions, of Americans have gotten used to saying “Alexa, lower the thermostat to 68” before they go to bed. The potential of the Internet of Things to re-shape daily life is no longer so hard to grasp.

Likewise, in the enterprise domain, costs are coming down and benefits are coming into focus. 2018 promises to be the year when deployments of cutting-edge technologies spread throughout the marketplace. Early adopters will be joined by competitive firms of all sizes, with profound effects on the software development industry.

In looking at the transformation year that 2018 promises to be, Belatrix forecasts the following trends will dominate software development in 2018:

Digital Transformation with Agile

Agile quickens the process of software development by bringing 6-8 team members into a collaborative, cross-functional team. Given the success of Agile principles in fostering software development in the 17 years since the Agile Manifesto appeared, its adoption has become widespread. Agile supplanted Waterfall as the favored method for software development several years ago. Still, while Agile is well known throughout the industry, it holds immense – and untapped – potential for businesses ushering in digital transformation initiatives.

Much of Agile’s potential for digital transformation comes from the fact that enterprises are reconciling themselves to a new competitive landscape, where tech savvy start-ups pose a major threat. Established banks, under threat from fintech, are a good example.

In one case, Belatrix helped one of the largest banks in Latin America implement Agile development in its innovation center, and then scale it to the rest of the organization. White boards were set up, team members were given notebooks to chart progress, and the bank invested in tools such as Jira and Bitbucket. This helped create the right physical environment upon which Belatrix coached the bank’s team on Agile principles. Thanks to this wholesale digital transformation initiative, the bank has introduced a series of user-friendly apps, including one that makes customer transfers of small amounts of money easy. Another allows for customers to open an account without having to walk into a branch; another allows for customers to easily apply for loans.

Within the software development industry, one key area where Agile will perceptibly change in 2018 is when it comes to remote teams. By 2020, an estimated 65% of projects worldwide will be developed remotely. So, quicker development, testing, and deployment, will all be carried out by developers working from Buenos Aires to Boston. Cohesion and culture will count for more among teams, even as members are more widely geographically dispersed.

What you should do

Enterprises eyeing digital transformation should look to Agile principles to help them. These principles, include at their core, for development teams to focus on iterative improvements. This helps organizations stay close to their customers. The fundamental lesson that we have seen, is for enterprises to avoid the so-called “dark side of Agile development” – this is where absolutes, such as rigidly pre-defining inputs, roles and time allotments, start to define what an organization is trying to do. Those teams that have been successful, realized how important it is to create healthy values, based on time, processes, team and quality. There is a focus on empowering individuals to do what is necessary.

DevOps helps create a customer-focused organization

Many successful developer teams have followed a long-standing practice whereby a single team attends a product through its lifecycle, from ideation to development, deployment, and then updates and maintenance. DevOps takes this philosophy even further, by focusing on creating cross-functional teams where developer and operations teams work side-by-side. As Belatrix noted in a primer on DevOps in 2017, this removes the organizational silos that characterized past development, and it means the team better understands the consequences of their actions. As a consequence of this level of team integration, communication problems diminish, and ultimately the quality and speed of software development is enhanced.

DevOps concerns developers working together with operations to make progress faster, and in a more highly automated and systematic way. The intensive use of DevOps attests to the underlying utility of Agile methodologies. And as with Agile, DevOps have been deployed by developer teams for years. Still, even though DevOps are by now familiar within the software development industry, it has yet to reach its full potential. A 2016 survey of over 1400 senior IT and business executives conducted by CA Technologies found that only 20 percent of organizations that have attempted to implement DevOps have fully deployed it.

What you should do

First and foremost, software developer teams should view DevOps as a way of focusing on the customer. DevOps enable teams to test ideas quickly, incorporate feedback on products rapidly, and calibrate software and applications. Fundamentally, this process brings developers closer to consumers, allowing a closer view of what consumers love.

While maintaining customer focus, teams can successfully deploy DevOps through select tools that allow the sort of continuous testing of the code they are writing, all of which is required for a thousand or more deployments a year. ANT and Maven are popular tools for continuous testing, as is Jenkins, the open-source continuous integration tool for Java developers. Github is a widely favored open-source tool to review and track code changes. There are a variety of tools to automatically deploy code, and in 2018 it seems likely that the popularity of Docker will continue to increase as a tool that developers find easy to use in conjunction with others in order to deploy code. Finally, there is a set of tools used in DevOps to gauge performance, including New Relic.

The merits of these tools and others, as well as a detailed analysis of how to automate pipelines for DevOps success, is found in Belatrix’s “Build and deliver software in a faster and consistent way with DevOps.”

Blockchain will lead to an explosion in new business models

Bitcoin’s 2009 launch and the subsequent steady “mining” of the cryptocurrency, leading to a total circulation of 17 million at present, has been the major driver of blockchain technology. As the Harvard Business Review noted in May of 2017, Bitcoin is the “killer app” that is likely to drive blockchain adoption in much the same way email powered use of the Internet. “Bitcoin drives adoption of its underlying blockchain,” notes the HBR article, “and its strong technical community and robust code review process make it the most secure and reliable of the various blockchains.” Bitcoin will be a core driver of blockchain adoption through 2018. As blockchain permeates financial services, the security of the ledgers will deliver sizable reductions in the amount of time it takes to clear transactions.

Even as more financial services firms recognize the benefits of blockchain in the near term, the potential of blockchain for wider usage will become increasingly apparent. Over time it promises to deliver gains through use in smart contracts, claims processing, and supply chain sensors, to name a few examples.

What you should do

Simply hiring people with Bitcoin or cryptocurency experience is unlikely in and of itself to bring about significant benefits. Instead, as Belatrix has pointed out in “Blockchain is the basis for your future digital transformation,” firms utilizing blockchain need to lay the groundwork by asking about what it means to re-conceptualize and re-architect their business for a world where blockchain dominates. C-Suite discussions should probe the fundamental question: How will blockchain change the business?

Considering this question will inform a deeper grasp of the capabilities enabled by blockchain, and subsequently allow the team to design a business model that exploits those capabilities. Carried to its successful conclusion, asking the question now will allow for the creation of a new business model that positions the firm in the market to take full advantage of what a blockchain business has to offer in 2018 and beyond.

Conclusion: Create a digital strategy and culture to keep competitive advantage

In 2018, the gap between high performing technology organizations and low performing organizations will become increasingly apparent. This technology gap will have a direct impact on business operations – those enterprises unable to nimbly react to changing market requirements will find themselves quickly overtaken by their competition.

However the focus will be less on the need to pick the right technology. Rather the onus will be on enterprises to create a digital strategy that brings together new business models and processes, together with the right talent. A key part of this digital transformation will be the cultural shift required to achieve this.

Blockchain and a host of other cutting-edge technologies will become a prominent part of the software development business in 2018. That will only amplify the importance of flexible, continuously adaptive, Agile teamwork.

Predictions 2018: A Year of Transformation