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By Clive Howard, Principal Analyst and Bola Rotibi, Research Director, Creative Intellect Consulting

Part 1 in a 3 part series Increasingly enterprises are feeling threatened by far smaller companies referred to as technology “Start-ups”. These micro organisations are often innovative and agile with a focus on user experience to quickly engage and win users. It is important to state that not all of these companies are the same. An academic “start-up” in the UK university town of Cambridge, could be very different from a two person company in Shoreditch, a borough in London that is being hailed as the hub of the UK Silicon Valley.

Start-up appeal

However it is most often the Shoreditch style of start-up that large organisations most fear. Typically these companies are small, pure play and driven by acquiring as much market share as possible in as short a time as possible. To do this they have to focus on what attracts users more than issues that enterprises typically concentrate on like governance. If these companies get it right then they can rapidly become incredibly successful with large market valuations. The poster child for “start-ups” is of course Facebook but there are many others, some less well known, that have seriously disrupted industries and have become worth billions of dollars in the process. In their wake often lie the demise of well-known “bricks and mortar” companies such as Blockbuster (film rental provider), HMV (music, film and games) and Jessops (photo processing and photography equipment). As these companies fell others looked on and began to think that they could be next. That begs the question as to how any organisation either weighed down by decades of building software in a certain way (often very slowly) and without the environment to make change quickly  can respond to such innovative and nimble competition? How each company answers this question will probably decide whether they are still around 5 to 10 years from now.

It’s the culture, stupid

The first issue that enterprises should look to address is process. Many enterprises still follow software development processes created for a different era when software ran on desktops and quarterly upgrades were considered regular. Most start-ups can get a product to market in weeks (sometimes days) not years and upgrades come every few weeks, daily or faster. These small organisations have often adopted Agile methodologies and concepts such as DevOps, Continuous Integration (CI) and Continuous Delivery (CD) (see CIC report on Continuous Delivery and DevOps : link - http://www.creativeintellectuk.com/research-library/#id81). Such processes inherently allow for software to be altered and delivered very quickly. The dynamics of the workflows truly embody the notion of a software factory with repeatable and predictable deliverable outcomes. These new processes are not beyond the enterprise and certainly Agile is rapidly gaining ground. The traditional Waterfall based approach that large organisations have pursued for years is being replaced. This is by no means easy and requires transformation programs that involve departmental restructuring, new roles (such as Scrum Masters) and training. Most significantly it requires a change in culture as well as a mind shift that is willing to address and shake up the underlying politics. It is here that start-ups truly have the advantage. Often populated with young developers who usually have to take on many different roles (including operations) they have a culture of delivering quickly. Once you have teams that can turnaround new features and push them out to production rapidly then you have an environment in which innovation can thrive. Innovation can be difficult when an idea has to go through multiple tiers of management and takes months to design, develop and deliver. Instead, using faster processes and idea can be pushed out, tried and then refined based on user feedback very quickly. In a world of ever increasing platforms and different devices, the ability to create an app for a new platform or form factor very quickly allows that business to be more creative.

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