Scary economic times - how can enterprise IT survive?

Posted by Paul Giurata

We are going through a very unnerving financial crises in the US . Everything is in flux and the ramifications will be significant across the business world in general, and companies that deliver solutions via software, in particular. 

With credit scarce and future sales unpredictable, many companies are thinking about hunkering down and going on life-support. But a bunker mentality may not be the best approach, if, at the end of this turmoil (and there will be an end), you want to end up ahead of your competition.

To the contrary, if you have been thinking about updating your software applications or moving to SaaS, now may actually be the time to invest and make your move - but do it wisely.

Even if the financial crises had never occurred, the rate of economic change requires a shift in how enterprises roll out new technologies and services. They can no longer afford the traditional sequential model of needs analysis, requirements documents, design, code, debug, beta test, grand rollout.  By the time the new service, product or campaign is rolled out, the world has changed and the service no longer meets the current market demands or competition. 

Big software projects get the ax

But it’s not just time-to-market where traditional software development projects tend to get bogged down or fail.  As a rule, large, sequential software projects are not predictable, they come in late, they cost more than anticipated, the risky development stuff happens at the end (where it is harder to change), and the users are unhappy with any software that does get delivered.  In a time of economic crises, these projects get the ax (and they should).

Adaptive, agile development

But there is a better way - one that does not require a total cutback on all software development projects.  Instead of projects that follow the analysis-document-design-code-test-rollout sequential model, develop projects that use rapid iteration to deliver early and frequent releases, adding features as needed. You might end up with only a small percentage of what would be in a traditional needs assessment.  But you release quickly, get users in the loop right from the beginning of the design, and update frequently based on user tracking and analysis.  Projects are fast, reliable, and affordable.  Moreover if built correctly, they are scalable, so that as you grow, the software can accommodate new users without you having to add new staff.

This “agile” approach is particularly suited to SaaS application design.  At Catalyst, we typically look at a user-validated design of a SaaS application with proof of concepts in 4-8 weeks, with rollouts and updates coming every 90 days.

Optimize human capital

SaaS also can be designed to address a touchier subject in unstable economic times - staffing.  Human resources are still the greatest expenditure for any software application company.  By addressing the full customer life cycle as part of the SaaS application design, you can significantly reduce the human costs.  Put the acquisition, customization, provisioning and support workflows in your customers hands as part of the SaaS application design, instead of opting for a big high touch sales or support process.

The strategy I am suggesting for SaaS application design is both cost contained and predictable. User validation is an integral part of the design so you know in advance that the product will be of value to users.  The design will also scalable for when growth does reoccur.

Use this (euphemism coming next) “financial transition period” as the impetus to adopt an adaptive enterprise application design and development model that will work well now, and work really well when the markets recover.