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It's actually easy to see the economics. Consider all the startup costs from selecting a technology, physical installation, configuration, integration, training, and developing support processes that are all overhead above developing applications. Even if your technology is SaaS or cloud deployed, it only addresses some of these startup costs.
What is difficult to understand or estimate is the benefit when individuals and teams develop an expertise with the platform. In addition to better productivity, the team develops better expertise in guiding the business on capabilities and feasibilities. Strong teams will develop reusable components and services that factor into both speed and quality.
Achieving 2X in Speed To Market Using Agile Platforms
Let's assume you take out the overhead of selection, installation, training, etc. and only compare the time and cost to develop product #1 versus product #2? Obviously I have to assume these products are somewhat equal in size and complexity, but take a guess how much more efficient a team will be developing that second product? From my experience, it's 2x which means either they can complete the second product in half the time, or build the second product with a 2x in functionality or complexity. Yes, I have working examples from multiple points in my career leveraging different teams and agile platforms that have achieved this 2x.
This is the final ingredient in Shifting to a Market, Program, and Platform Organization. Once you know your target audiences (markets) and develop running programs using agile planning and development processes, it's the expertise around a platform of technologies that makes the team truly nimble.
I agree that we leverage the majority of the fixed costs as we develop the first couple of products using a platform. In terms of creating market demand and / or meeting the needs of an existing market, the platform-oriented approach should consider (1) the ability of the platform to create and / or meet market needs, (2) the TCO for upgrading and maintaining the platform, (3) the opportunity cost of refraining from the use of quickly-evolving technologies that may provide better solutions, and (4) peoples' desire for self-improvement and expansion of skill sets, which is a crucial consideration for motivation, drive for excellence, and the propensity to achieve business goals.
ReplyDeleteTo achieve short-term deliverables, building upon an existing platform accelerates time to market; long-term, there are other aspects to consider.
I actually enjoyed reading through this posting.Many thanks.
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