Published on: December, 2015
Published on: December, 2015
Predictions 2016: Cracking Open The Digital Economy
What’s In Store For Software Development In 2016
Digital technologies have continued to transform businesses at a lightening pace over the past 12 months. From healthcare to automotive, it is software which today makes the difference between a runaway product success, and rapid failure. While software may be “eating the world”, it has also proven it’s ability to eat executives’ jobs, as high-profile failures, from Volkswagen to Target, hit the news over 2015. These failures highlight the challenges that organizations face as they pivot to today’s digital world, where their customers have ever greater demands and expectations. The emerging digital economy will increase by a quarter from today’s size, to $4.8 trillion in 2025.
Enterprise technology spending will double during the “Second Digital Revolution”, and investment in software will comprise a major proportion of this. It will be software that underpins this transition, and powers many of the major business and societal changes we will see in the next few years.
Therefore within the midst of a transforming business and technology landscape we have identified the following predictions for software development in 2016.
- Testing gets a seat at the executive table
- Design Thinking continues to gain traction and changes the shape of the services industry
- Software powers increasingly individual customer journeys
- Software platforms for the internet of things shifts focus of software product development
Each of these will have a major impact on your organization. The following section examines each of the predictions, and what you can do to best prepare for them.
Prediction No.1:Testing Gets A Seat At The Executive Table
With the rise of mobile and cloud applications, executives have increasingly focused on the importance of testing, driven by greater complexity and faster release cycles. 75% of mobile apps today ship with between 1 and 10 bugs. Given your app will be the key interaction point between you and your customer, you can no longer consider testing and quality assurance (QA) as a side-thought. In today’s mobile-focused world, QA must have the same level of status and importance as development.
Automation is a critical element in handling this increased level of complexity. Automation helps lead to faster test cases and greater accuracy. Particularly in complex areas such as regression testing, automation significantly reduces the time required for testing cycles. This is particularly important with the ever rising complexity of software which most companies rely on for critical business processes.
Moving into 2016 we believe testing automation will increasingly blur with the rapid advances being made in cognitive computing and artificial intelligence (AI). While still at an early stage, there is tremendous potential for AI within software testing, particularly by improving the use of data, and prediction.
- What you should do about it: The first step needs to be to elevate the importance of testing within your organization. Do business executives understand the importance of testing (and automation) to your 2016 business agenda? Do they understand how testing can lower risk, improve the customer experience, and help you create and shift to new business models?
- Meanwhile, if you are just getting started with automation, begin by identifying those processes and workflows which can most easily be automated. Not every task will meet this criteria, and it will depend significantly on the level of complexity. The greatest challenge for automation within testing is when the application is in a state of constant change or flux. Here, for every change you make to the application you will need to make a corresponding change to the test framework, and this can cause time, effort, and budget increases. We recommend therefore first analyzing your application portfolio to determine where you can apply automation most effectively. While automation will benefit your product development, it remains critical to have highly talented quality assurance (QA) individuals who can understand and implement this automation where it is appropriate, while also pushing back when other approaches are more effective.
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Prediction No.2: Design Thinking Continues To Gain Traction
Last year we predicted that Design Thinking would start to transform product development, but its rise has been even faster than expected – 2015 was certainly the year that Design Thinking came to prominence. Front-page articles in the Harvard Business Review for example drove broader business stakeholder awareness of the framework. As a result we believe 2016 will be the year when the Design Thinking starts to profoundly alter the shape and characteristics of the technology services and outsourcing industry. Research by the analyst firm, Horses for Sources, for example found that 92% of enterprise service buyers believe that Design Thinking will have “some” to “significant” impact on what they are terming the shift to an “as-a-service economy”.
We still believe however that the services industry has much to do to take full advantage of the power of Design Thinking. Design Thinking will lead to service providers taking greater responsibility for business outcomes. In addition it will contribute to customers requesting end-to-end capabilities, rather than looking for discrete service offerings.
- What you should do about it: Start experimenting with Design Thinking. If you´re not familiar with the approach, look to courses such as those run by Ideo to get a headstart. Ask your service provider and partners what they are doing with Design Thinking, and how they can apply it to your projects and engagements. As we highlighted in our 2015 predictions, adopting Design Thinking will involve creating multidisciplinary teams including project managers, developers, QA and user experience experts. This diversity of expertise will help provide a greater variety of inputs to really understand the challenge or obstacle that your customer is trying to overcome with your product or service.
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Prediction No.3: Software Powers Increasingly Individual Customer Journeys
We’re already fortunate to have at our disposal incredibly powerful technology. While the pace of new technology development continues to accelerate, we believe 2016 will be more about using the technology we already have to create delightful and powerful customer experiences. Product development executives will be tasked with bringing together a blend of design, technology, and customer focus, as they work to create new products and services.
But to create these compelling customer experiences, we will need to shift from simply better understanding the customer journey, to redesigning the technology and organizational processes to make the organization laser-focused on the customer and their specific needs at each stage of the journey. Customer experience initiatives will be one of the key areas of innovation spending going into 2016.
This trend will shift from being largely reactive amongst companies to proactively seeking to understand their customers. The ability to understand and then shape the customer journey will become a key source of competitive advantage.
- What you should do about it: First, understanding is key. The research you conduct will help provide the insight necessary to better understand your customer. For example, do you know if your customers use your mobile app or your mobile website, and how does this change during the customer journey? How does your customer behavior vary across your key customer segments? Approaches, such as that offered by Design Thinking which we discussed earlier in this paper will be a powerful tool in your armoury. Examine the skillsets you have available, particular with regard to user experience.
- In addition to better using sociological insights and the power of Design Thinking to understand the customer journey, data will be critical. Investment in big data and analytics will be critical to better understand your customer in ways not possible before. The emerging world of wearables for example will provide a treasure trove of information about the actions of your customers. The greater challenge however will be creating the technology, organization, and processes to effectively collect, analyze and act upon this data. Predictive and prescriptive analytics will be critical to ensure this analysis and that actions are taken within the time necessary to influence the customer at the specific point in their individual customer journey.
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Prediction No.4: Software Platforms For The Internet Of Things Shifts Focus Of Software Product Development
According to IDC, by 2018 there will already be over 22 billion IOT devices, and there will be over 200,000 IOT apps and services. 1 million new IoT devices will be purchased every hour of every day in 2021. However we believe the focus will increasingly shift away from the number of connected devices, to how the IOT can create transformative customer experiences. And creating these customer experiences will require the development of powerful software platforms.
It is the software platform (powered by cloud technologies) which will bring together the range of data from the myriad of IOT devices in today’s world. Commentators have described this software as the “connective tissue for value creation”, and it will become the critical aspect in driving the IOT to wider mainstream adoption.
- What you should do about it: Given the explosive IOT growth, particularly in the apps and services which are imperative for creating the customer value around the devices, start looking to shift your budget allocation towards IOT initiatives. As the IOT becomes more widely adopted, it will require shifts in your technology organizations’ processes, culture, and skill-sets. Meanwhile, given this is an emerging area, consider running dedicated IOT hackathons to explore its potential with your existing products and services.
- Remember, much of the technology we need to create transformative software products is already available. Look to products such as the Flic device, or Nest thermostat, which are great examples of taking existing technology, but creating simple and powerful customer experiences around them.
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Key Takeaways
2016 promises to be an exciting time in the technology industry. As technology becomes ever more embedded in, and critical to, business processes, so the potential for new business models and transformation will increase. This will manifest itself, most visibly, in the continuing shift of budgets from technology stakeholders to business stakeholders. Already 55% of worldwide technology spending is controlled by line of business executives, and we believe this shift will continue to accelerate in the next 3 to 4 years.
To get a deeper insight in this topic, we’d like to invite you to join our webinar about Predictions 2016 on December 16th. Please, follow this link to register.