, Summary:Systems Development and -Economics [HMH79a] – Axel Temmerman
Chapter 1: Introduction and Motivation
Digitalization?
- D
igitalization is the use of digital technologies to change abusiness model
and providenew revenue and value-producing opportunities;it is the
process of moving to adigital business.
Software is everywhere:
- D igitalization is primarily (but not only) about providing software support to
products and services that were not supported by software in the past.
- It touches every function of the company, so the entirety of the organization
should be rethought in function of the digital change.
- COVID-19 pandemic gave this digitalization an enormous boost. Plans that
had dragged on for years had to be implemented at very short notice,
overcoming many technological organizational, skill gaps, and cultural
barriers.
Digitalization is the new disruptor:
- A ccording to Jim Collins, companies last on average no more than 10 years
on the Fortune 500 list. That time period keeps on regressing.
- Why does it regress? → Companies fail to innovate and to build new core
capacities.
What makes a company a digital one?
Not a digital company A digital company
- ses emails
U - ata-driven decision making
D
- Has a website - Relentless experimentation (e.g. A/B
- Uses social media testing)
- Uses video conferencing - Short feedback cycles
- Has a chatbot - Decision making pushed down in
organization
- Strategic data collection
- Unified data warehouse
- Pervasive automation
- New job descriptions
Evolution of Technology
2
, Summary:Systems Development and -Economics [HMH79a] – Axel Temmerman
ommodity functionalities don’t give competitive advantage, differentiating
C
functionalities do.
Three Key Take-Aways so far:
1. D igitalization is disrupting industry and society; the same trend should
continue and even accelerate.
2. Companies need a new digital business operating system:
a. SOFTWAREneeds to be developed to sustain all of thebusiness
activities in the most rapid and flexible way possible.
b. DATAallows forArtificial Intelligence(Machine andDeep Learning)
solutions and forEMPOWERMENTandautonomy
3. ECOSYSTEMSaround software systems and IT servicesneed to be included
in this new digital business operating system.
Trends in the industry and Explosion of produced data
Software drives everything!
- F rom cars to drones
- IOT (Internet of Things)
- But in the future, we could see smart
cities, more integration of processes in
the blockchain, …
oftware is so important that the “general law”
S
is that the size of software multiplies by 10
every 7 years. → exponential growth
AI Technique: Deep Learning
n algorithm is created out of an existing
A
dataset. This algorithm is then trained to (in
this example) recognize what animal it is
looking at through trial and error.
nce this algorithm is fully formed/developed
O
on the test set, you can deploy it and use it
outside of the training scenario.
Trend: Need for Speed
In highly innovative environments (e.g.
apps development for smartphones) you
need short development cycles (agile
development), as well as continuous
development (DevOps).
3
, Summary:Systems Development and -Economics [HMH79a] – Axel Temmerman
eing speedy with the rolling out of new software/updates means that you can
B
capitalize on them as quickly as possible → generates a bigger competitive
advantage
Agile Development
- B uild each feature one after the other in
independent short time iterations called sprints.
Each sprint produces an executable feature.
- Features are prioritized in function of the business
value they offer (highest business value first)
et’s imagine that you want to develop an entire system, cutting the system into
L
pieces allows you to deploy it piece by piece very early in the project life cycle. This
allows you to generate a return on investment on the piece that are already
deployed.
unctionalities that generate the most value (e.g. money) are developed first so as to
F
be deployed as quickly as possible. → Driving developments by value
DevOps
- C an be seen as an evolution of agile
development, it is relevant of technology
driven businesses (e.g. Netflix, Amazon,
…)
- Sprints do not only involve the traditional
development team (the Devs) but also the
operation team (the Ops) in charge of integrating the produced software
(features) into the organization’s software ecosystem. This way each new
release (or feature) can be immediately (continuously) integrated in the
organization’s software ecosystem.
- This approach, while successful, presents a lot of constraints; for it to be
effective both groups need to be aware of what the software ecosystem is and
how it functions. If that is not the case, it could result in an unusable
infrastructure.
4
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