Creating a Business Strategy for your Software Factory: A Comprehensive Guide

Henk Kok

Creating a Business Strategy for your Software Factory: A Comprehensive Guide

Developing a business strategy for your software factory is essential for achieving long-term success in today’s competitive market. A strategic approach to planning and decision-making can help you align your goals with your target market, differentiate your offerings from competitors, and create a roadmap for growth. In this blog post, we’ll guide you through the strategic approaches, tactical phases and operational aspects of creating a comprehensive business strategy for your software factory. From defining your overall development process and unique value proposition, to outlining your internal communication, business model, and technical strategy, we’ll cover all the key components you need to consider. Download our white paper for our more elaborate take on all aspects, the key takeaways some final tips for success.

Table of Contents

Did you ever visit a factory and get a guided tour by the CEO explaining in detail how the production process works, which machines are used, who can operate them and which machine is going to be replaced soon? If not, try it in your network. Almost every CEO in the manufacturing industry will be delighted to give you the Grand Tour.

The experience in the IT landscape is very different. If you also ask a CEO of a software company to get an understanding of their company’s software production process, you will find that they don’t know how to explain it. They usually talk about their software and not about the process by which it was manufactured. This article explains why everybody in a software company should understand the process of how they produce software. And of course how to be able to give the Grand Tour 😃

Strategic Approaches:

Having a consistent vision on building a software factory is important for getting everyone on the same page. Today’s software development utilizes many strategic approaches to facilitate building applications and software solutions. We have Waterfall, Agile, Lean Startup, Design Thinking and DevOps as well as their combinations to meet the needs of different parts of your organization.

Let’s dive into these five types:

Waterfall | Objective-driven approaches

Benefits: Better manageability, apt for fixed fee and deadline, clear development instructions.

Drawbacks: Difficult to adapt to change, requirements don’t always reflect real user needs, difficult to gather user feedback, estimates based on initial documentation is often wrong.

Agile | Subjective-driven approaches

Benefits: Continues adaption to lessons learned, more efficient tasks on the board so everyone is working on relevant tasks, less bureaucracy, smaller and faster software releases.

Drawbacks: poor documentation, difficult to measure progress, difficult to create a budget in terms of feature costs, difficult to prevent technical debt, agile ceremonies can consume a lot of time from everyone involved, the project often lacks design from both an architectural and a UX perspective.

Lean | Process-driven approaches

Benefits: Improved efficiency by reducing waste, Increased collaboration to boost comprehensiveness, Continuous improvement by quickly addressing problems, increased customer satisfaction by focussing on the delivery of the value to customers.

Drawbacks: Requires a strong focus on metrics, not suitable for projects with very well defined requirements, has a steep learning curve, it will take time before everyone masters the appropriate skills.

Design Thinking | User-driven approaches

Benefits: speeds up problem finding, discovering unknown unknows, strong engagement and bonding with end-users, but the biggest of them all: reaching the most suitable solution before starting the actual and expensive implementation

Drawbacks: the initial design thinking process takes a lot of time. This is easily regained in the implementation but is difficult to explain to a lot of companies. The direct involvement of end users is crucial but often difficult to realize. Overemphasizing generating new ideas instead of understanding how they actually work could also be a big drawback.

DevOps | Operations-driven approaches

Benefits: DevOps can help organizations deliver software more quickly and with fewer defects, improve the reliability and stability of software products, and increase efficiency. It can also help organizations respond more quickly to changing business needs and customer requirements.

Drawbacks: implementing DevOps creates a lot of complexity and it can be challenging to establish a DevOps culture and get all team members on board. The implementation can be costly and might disrupt the current process.

Tactical Phases:

There are many different phases in the software development process. In an operational setting, a subset of the following phases is often used:

Initiation \ Ideation: This is the first step of the idea, feature or innovation process. It begins when a customer or product manager identifies a need or opportunity. This phase is crucial for setting the stage for software development. It involves brainstorming sessions, stakeholder meetings, and market research. Effective ideation should not only consider internal capabilities but also external market trends and customer feedback.

System Concept Development: Defines the scope and boundaries of the concept or feature. This step extends the initial idea into a more tangible concept. It involves defining the system’s scope, potential limitations, and its broader impact on the organization. This phase benefits from tools like SWOT analysis and feasibility studies.

Planning & resource gathering: The first steps in planning and resource gathering include identifying the team’s skills and roles, writing high level goals and objectives, defining the scope of the project, identifying stakeholders and their needs based on the previous phases. Here, detailed planning is undertaken, encompassing resource allocation, budgeting, and timeline setting. This phase often involves using project management methodologies like Gantt charts or Kanban boards.

Requirements Analysis: Requirements analysis is the process of fully understanding what a user wants from an application. In this phase, the team identifies the specific requirements the software must meet. This involves gathering detailed input from stakeholders, and potential users, and using tools like user stories or use cases.

Design: This phase can iterate very well with the previous phase and fleshes out the actual pixel-perfect design of the idea or feature. This phase transforms requirements into a detailed design, including user interface, experience design, and system architecture. Tools like wireframes, prototypes, and design specifications are key.

Development: The process of converting a design into an actual information system is more than just writing code but can also include a combination of online services and hardware. Actual coding and system development take place in this phase. It’s crucial to have coding standards, version control, and regular code reviews to ensure quality and consistency.

Integration and Testing: The goal of integration & testing is to check that the communication among all the modules of your product is correct. This phase focuses on combining all developed modules and rigorously testing them for bugs, performance, and user acceptance. Automated testing and continuous integration tools are often used here.

Implementation: Modern implementation is often done with a DevOps focus. Effective DevOps practices help an organization deliver faster, better, higher-quality, and more reliable software. This involves deploying the software in a live environment. Key considerations include data migration, user training, and a phased rollout plan.

Operations and Maintenance: All systems require some type of upkeep and monitoring to ensure that they stay up and running. Post-deployment, the focus shifts to ongoing support, bug fixes, and updates. Regular monitoring, user feedback collection, and performance analysis are integral to this phase.

Disposition: The disposition activities ensure the orderly termination of features on the system and preserve vital information about these features. This final phase deals with the systematic discontinuation of software features or the entire system. It involves data archiving, user notification, and transitioning to new systems if necessary.

Metrics for Success: To ensure that your software factory is operating efficiently, the organization should establish metrics for success.

Operational Choices:

Based on your strategic approach and the tactical phases you are going to implement in your software development process you need to select the right tools.

The first step is to think about what you need to accomplish in each phase and make sure the selected tools can deliver on those needs. For example, if you’re planning a mix of standard software with custom development for selected users, then you’ll want to make sure your UX tooling can help you create clickable demos and define acceptance criteria fast. If your current toolset can’t do this, then maybe it’s time for an upgrade!

Another example of an aspect to consider is the market introduction. If the amount of users on your system is larger, it might be wise to have a beta team testing every new release before all other users will receive the update. Your DevOps team can setup the right CI\CD toolchain to fully automate this process.

Is your feature list growing? Your development team might want to experiment with Github’s CoPilot to speed up feature development.

Once you’ve selected the right set of tools, it’s important that they work together seamlessly. And that everybody understands what you are using and why. That’s why we recommend using a tool like Spotify’s BackStage as part of our Software Factory Solution—it allows you to seamlessly integrate all your infrastructure tooling, services, and documentation with a single, consistent UI, into your existing process so that developers can get up and running quickly while still staying connected with their team members throughout the process.

The Four Way Software Factory Principles

Whether you chose a Waterfall, Agile, Design Thinking or a mixed approach, there are 4 major principles that govern the development of your Software Factory:

  1. The first principle is that there should always be well defined, research backed, timebound goals which are clear for all people involved. 
  2. The second principle is that all work should be done in small batches. This means breaking down large tasks into smaller pieces so that they can be completed more quickly and with less chance of errors. Small batches also allow for more frequent feedback from customers, which helps ensure that the final product meets their needs.
  3. The third principle is to automate as much as possible. This includes automating tests, deployments, and other repetitive tasks. Automation reduces the amount of time needed to complete these tasks and makes it easier to make changes without introducing new errors.
  4. Finally, the fourth principle is to share as much knowledge as possible within your organization. Share your successes together, tell others about new insights and make your documentation accessible for as many people as your governance allows you to. Continuously improve your process by learning from your mistakes and making changes accordingly. This includes constantly experimenting with new techniques and tools to find what works best for your team or organization.

Curious how Xablu can help your organization ?