At the recent Frontiers in Service conference in San Jose, CA, I had the pleasure of introducing a presentation from 3 Pillar Global, Rockbridge Associates and the Center for Excellence in Service at the University of Maryland’s Robert H. Smith School of Business that was up for the Best Practitioner award.
The presentation covered a study on factors that influence software product development success that was conducted in the second half of 2014. The study is based on interviews completed with more than 200 professionals in the software development space that have shared or full responsibility for software development purchasing and procurement. The participants represented mid-sized companies in sectors like banking, entertainment or healthcare, that used software products to augment their core services.
The study culminated in the development of a Product Development Success Index – or PDSI for short – that can help companies predict whether or not their development efforts will ultimately be successful.
What did the study find? One of the key outcomes was that it identified 6 key factors that influence whether or not a company will be successful at conceiving and developing new software products. The factors are not all as technology-related, as one might think, and some of them are in fact “softer” factors and are not technology-related at all.
The importance of the factors was found to be, in order of importance with the weight in parentheses:
Perhaps the most interesting finding of the study is that Time & Budget, which are the 2 most traditional and quantifiable ways of measuring software projects, actually were shown to have minimal impact on a project’s overall success as defined by the study.
Another key takeaway is that leaders at companies the study found to be successful are committed to agile. Twenty-six percent of companies that the study found to be highly successful engaged in at least five agile practices, whereas none of the companies that were found to be rarely successful engaged in that many agile practices.
The measures of agile development that respondents to the study were asked included:
- Length of time from idea to working software (3 weeks or less)
- Whether new software is covered by automated tests
- Frequency of review and re-planning priorities (every 3 weeks or more often)
- Frequency of end user testing (every 3 weeks or more often)
- Frequency of process improvement (every 3 weeks or more often)
- Whether team members exchange information and learn from each other
- Whether business and technical teams collaborate on software development projects
Another key finding from the study was that there is a perception gap inside companies between senior management (i.e., Vice President and higher titles) and those directly involved in development activities (i.e., Director or lower titles), which can have a profound effect on their overall success.
Professionals at the Vice President level or higher rate their company better on many areas of the PDSI and also believe their companies are performing better on a variety of software product development business goals. For example, 54% of senior executives say they are successful at meeting customer needs compared to 32% of more junior employees.
Contrary to this trend, Vice Presidents and higher report similar levels of performance on a variety of business outcome metrics, including revenue, brand perception, customer loyalty and customer growth. This indicates that while there is a shared consensus between rank and file and senior executives on the business success of their firms, the senior level professionals tend to be far more optimistic in their view of their organization’s success in new software product development.
One problem that may result from this perception gap is that senior decision-makers may ignore key problem areas that, if addressed, could improve their overall success. Similarly, the rank and file employees may fail to see the total picture, harboring an overly pessimistic viewpoint that could impact morale. Summing it up, this study provides valuable insights into how companies can bolster the success of their internal software development functions. This is an area of increasing importance to clients of 3 Pillar Global who rely on custom software solutions to drive their core business, improve customer value and create new revenue streams.
Please visit www.PDSInsights.com to learn more about the Product Development Success Study, get your organization’s own product development readiness grade, and read related content on how to build an organization that is optimized to build software successfully.
