I have said in a previous post that “A digital organization is a software development company at heart”. In Mckinsey’s 2022 article, there are the same notions just for a reminder I try to summarize this article.
This stat makes everything super-clear: “From June 2022, nearly 70 percent of the top economic performers, are using their software to differentiate themselves from their competitors”. This means no matter which industry you are in, the thing that makes you a “top performer” and “digitally matured” is your usage of the software.
On the other hand, another stat shows that this path is extremely challenging: “less than 7 percent of all software revenue in the world accrues to nontech companies”.
These tips from Mckinsey’s article will help you in this journey to become a software-oriented company with a “software development company (SDC) ” culture.
- Culture: it was obvious. SDCs have an agile and multi-disciplinary culture that breeds innovation and value-centricity.
- Leadership: there is a high demand for software people on teams, regardless of their goals. Software people (those who can detect problems and come up with a software solution or blueprint) bring something new to your table. This pattern should be seen at the leadership levels of the company.
- Communication: if the communication line between leaders and the operation level is damaged or cut, nothing can get through and the results that should be derived from strategy will never happen.
- Investment: how much of your revenue gets reinvested in creating a software-oriented company? One of the strategies is to acquire small software companies and use their products/services for your operation in addition to expanding your ecosystem.
- Organization roles: in order to become such a company, first you need to design a chart that supports this mission. Product/service managers are hot topics and many organizations are implementing these roles to delegate A-Z of a product to a dedicated team while supportive teams enable them.
- Autonomy: “Good software development can’t thrive in a hierarchical organization”. In addition to changing the org chart, OKR-like mechanisms are in order. this shift creates a new accountability and performance management framework.
- IT Architecture: The fundamental elements of this architectural design consist of APIs, which can interact with the fundamental data, algorithms, and procedures within older systems. Moreover, there is a collection of microservices, which are self-contained units of code responsible for executing specific tasks.
- Ecosystem: either joining an existing ecosystem or building an ecosystem, you can’t do it all. Strategic partnerships and collaborations can decrease T2M significantly.
This whole thing reminds me of a quote from Domnio’s Pizzas CEO that says I don’t know if we are a Tech company that sells pizza or the other way around! Can you say the same for your organizations?
Results-Focused Investor | Strategic Advisor. I turn big ideas into unstoppable ventures that scale fast. I talk about AI, Robotics and Growth
1 年Seyed Mahdi asserts that every digital organization inherently is a software development company, a sentiment echoed in a recent McKinsey article. Check out his insights on this topic.?