Benefits of Industrial DevOps

This post is an excerpt from Industrial DevOps: Build Better Systems Faster by Dr. Suzette Johnson and Robin Yeman.

There are multiple benefits that have been realized by companies that have implemented some or all of these practices. The goal of adopting Industrial DevOps principles is to achieve desired business outcomes. As you embark on your Industrial DevOps journey, start by understanding what benefits (business outcomes) you are seeking and how Industrial DevOps can help your organization achieve those benefits.

The benefits that most organizations are seeking fall into one or more of the following areas:

• Learn faster
• Time to market/speed
• Productivity
• Quality
• Employee happiness
• Customer satisfaction

Learn Faster

Learning faster allows us to remain competitive. As discussed in Perez’s work on historical patterns of innovation and their impact on economic growth, we are experiencing the fifth technical revolution, which is referred to as the age of information and technology that began in the late 1970s. According to this article in 2016, 50% of the companies listed in the S&P 500 index would be replaced over the next ten years. The companies that learn the fastest are likely to remain relevant. We cannot predict what products customers are going to need in the next ten years, but leveraging the short learning cycles that Agile and DevOps provide can keep us on point.

Time to Market/Speed

Time to market means getting your product out to your users/customers in the time they need it. You may be working to release just before a major holiday in the hope of increased online shopping sales, or maybe you are working to outpace your nearest competitor and get a new product released ahead of them. If you are in defense, you may be responding to increasing threats or cybersecurity needs and need to respond quickly. Regardless of why speed is important to your organization, Industrial DevOps principles can help you.

According to the Harvard Business Review research report Competitive Advantage through DevOps, in 2019, 86% of those surveyed responded that releasing new software quickly is important to outpace their competition. And 70% responded that DevOps is contributing to increased speed to market. Within the automotive industry, there have been similar improvements in faster delivery, with reports of Tesla being able to deliver one-hundred-times-faster factories or production by applying Agile methodologies to hardware manufacturing.

The first scenario could mean faster delivery time of new software functionality to an existing product in the field. This could mean pushing out new software features to cars that are already purchased or updates to satellite systems. Another scenario is when the software and hardware for a new cyber-physical system are still being developed. Faster time to market in this case could mean improving the overall lead time for the development of a new satellite, rocket booster, medical device, or robot for the manufacturing plant in which there is development for both hardware and software, resulting in a much longer lead time than in the first scenario.

Regardless of the scenario, the goal is to achieve faster time to market to meet specific business outcomes. Faster time to market helps us gain a competitive advantage, see the return on investments, and shorten the lead time to deliver value to the customer.

Productivity

Continuous improvement in practices and digital capabilities improves productivity, which is the ability to produce more by reducing waste and streamlining wait times. With the application of Lean, Agile, and DevOps, there has been evidence of improved productivity and operational efficiencies, which is clearly a good thing.

Based on work by Gary Gruver in 2015 while he was working at Hewlett Packard during the early adoption of the Agile transformation, they experienced significant improvements. The organization recognized a reduction in development costs ($100 million to $155 million) with a 140% increase in the number of products supported and increased capacity for innovation from 5% to 40%. What is also interesting is that the greatest improvements witnessed were not at the team level but with teams of teams coming together through regular integration in production-like environments. This resulted in greater impacts through overall improved productivity of the organization to meet business outcomes.

While the benefits of Agile are often considered to be team level, research in 2021 by Paula de Oliveria Santos and colleagues uncovered the benefits of large-scale Agile. Their research analyzed seventy-six articles that highlighted Agile’s recognized benefits. From that research, they discovered over thirty benefits of large-scale Agile, with one of those benefits being improved productivity. This finding was based on the implementation of multiple Agile frameworks. Their research identified that of the benefits realized, productivity was often identified as a benefit, and “adopters of Scaled Agile Framework have reported significant improvement in terms of productivity and quality.”

Tesla also has their own results to tout. According to an article published by Nikkei Asia, by the end of 2022, Tesla’s methods replaced Toyota’s Lean and produced a more profitable car. Tesla achieved $9,570 net profit per car, which is approximately eight times the profit of Toyota. We recognize there are multiple factors impacting profitability and not process alone.

Improved efficiencies in one area are not the whole story. Without understanding where the bottlenecks are in the whole value stream, improving efficiencies and producing more product parts or features before a bottleneck can lead to too much inventory or wait time until the bottleneck is removed. This is exemplified in The Goal by Eliyahu Goldratt. Improve productivity with the entire value stream in mind and focus on removing bottlenecks so value can be delivered.

In Sooner Safer Happier: Antipatterns and Patterns for Business Agility, Jonathan Smart recognizes the shift in mindset from a focus on localized improvements in productivity to the end-to-end flow or lead time. While improvement in processes can lead to improved productivity, caution needs to be exercised. With an increase in productivity, you may be improving time to market and delivery of product features; however, it is important to ensure what you are delivering is providing value to the customer. He refers to this concept as “valuetivity”—that is, “the soonest realization of the most value with the least output.”

Improving productivity and operational efficiencies is important, but you must also look across the entire value stream to ensure improvements are made at the right place in the value stream. Improve productivity. Improve time to market. Ensure improvement in “valuetivity.”

Quality

A quality product is about both ensuring we build the right product and we build the product right. Building the right product means that it provides “valuetivity.” The product is working as intended, and the customer is receiving the intended value. The other perspective is that the product is built right. This means the product or its subcomponents are working and have been tested. These two concepts demonstrate the difference between system validation and verification.

As we improve the quality and value of the product, we are continuously improving the process. The improved quality of the process ties back to the benefit of improved productivity. For decades, the Lean community has touted the need for getting it right the first time. This concept means building quality in along the way versus bolting it on at the end. Teams continuously improve the product by improving their technical capabilities and receiving regular feedback from the customer.

This is also true for the cyber-physical system community. Due to the safety and security aspect of cyber-physical systems, along with the often-enormous costs of the systems, getting it right the first time (at launch) is often a requirement. However, we can do that only by building in quality with each iteration of work. Based on reports published by Harvard Business Review, quality continues to be a driver for the adoption of DevOps. According to their market research, 64% of the respondents claimed service/product quality benefits.

The DevOps revolution has had a major emphasis on improved quality. Through improved product quality, systems are more sustainable. Defects are discovered earlier in the product life cycle, with the implementation of short iterations creating savings in cost and schedule.

According to Jeff Sutherland in Scrum: The Art of Doing Twice the Work in Half the Time, if a developer entered a bug into the system and fixed it right away, it might take only an hour to fix. However, if the defect was discovered three weeks later, it took at least twenty-four times longer to fix. That was a software team that specialized in the development of PDAs. Imagine scaling that scenario into a cyber-physical system that has hundreds, if not thousands, of developers. The savings in time, cost, and frustration has the potential to be significant as we scale these practices.

Employee Happiness

One of the core Lean principles focuses on respect for people. It is the people who do all the work, and through their daily efforts and dedication, they are delivering results. Improving business performance and delivering value to the customer in the shortest lead time hinges on the engagement and collaboration of the workforce to deliver results.

Workplaces need to harness the involvement and enthusiasm of their employees to build better systems faster with more innovative solutions for their customers. Environments that are psychologically safe and where people are given the tools to do their job lead to increased performance. A place where people are able to experiment and innovate, where their products are used, leads to improved “employee satisfaction.” This creates a better work environment where collaboration and morale are high.

Lean and Agile teams are actively engaged in planning and demonstrating their team’s products. Through planning across multiple horizons, they can see how their work ties back to the strategy. This creates a sense of alignment with the organization.

In 2016, Harvard Business Review published the article “Embracing Agile.” The authors emphasize that Agile has not only revolutionized the world of software development but is also impacting how organizations lead people: “Compared with traditional management approaches, agile offers a number of major benefits, all of which have been studied and documented. It increases team productivity and employee satisfaction.”

Also supporting this claim is the Business Agility Institute. In 2019, they conducted research investigating employee engagement and found a positive and higher correlation between employee engagement and mature Agile organizations.

Agile is transforming the world of work. It is transforming how we build systems, how we lead people, and how we work together. This shift is leading to higher levels of employee engagement, which leads to happier employees and improved business outcomes.

In 2021, Forbes published an article, based on data from Gallup’s State of the American Workforce report, that says:

“Companies with an engaged workforce are 21% more profitable. Companies that lead in customer experience have 60% more engaged employees. And study after study has shown that investing in employee experience impacts the customer experience and can generate a high ROI for the company. And here’s our favorite stat of all, proving once and for all that if you’re not taking your employees’ experience into consideration, your customers will go elsewhere: Companies with highly engaged employees outperform their competitors by 147%.”

Based on the data from the collective research, it is clear that Agile ways of working lead to increased employee engagement, and building this positive experience for your employees produces even better results for the company.

Customer Satisfaction

Our goal is to deliver value in the shortest lead time through an empowered and engaged workforce. Delivering value means demonstrating value to the customer. Industrial DevOps principles enable large development teams to continuously improve and adapt to customers’ changing needs and priorities and to allow for the opportunity for increased innovation. Short, iterative development cycles provide the opportunity for increased customer engagement and ongoing feedback to the teams as the product is developed.

A 2016 Harvard Business Review article confirmed that based on interviewees’ experience, “Agile improves customer engagement and satisfaction, brings the most valuable products and features to market faster and more predictably, and reduces risk.”

Research on the benefits of Agile manufacturing for smart factories has also indicated improvements in customer satisfaction because of improved product quality and the ability to meet schedule demands.¹⁵

Engagement with the customer, as the product is developed, helps ensure the highest-priority items are being addressed. Customer satisfaction increases as a result of improved engagement and open collaboration.

In our last post in this series, we’ll take a look at the common misconceptions about Industrial DevOps.

- About The Authors

Suzette Johnson

Dr. Suzette Johnson is an award-winning author who has spent most of her career in the aerospace defense industry working for Northrop Grumman Corporation. Suzette was the enterprise Lean/Agile transformation lead. In this role, she launched the Northrop Grumman Agile Community of Practice and the Lean/Agile Center of Excellence. She has supported over a hundred enterprise, government, and DoD transitions to and the maturation of Lean-Agile principles and engineering development practices. She has also trained and coached over four thousand individuals on Lean/Agile principles and practices and delivered more than one hundred presentations on Lean/Agile at conferences both nationally and abroad. Her current role is as Northrop Grumman Fellow and Technical Fellow Emeritus, where she continues to actively drive the adoption of Lean/Agile principles with leadership at the portfolio levels and within cyber-physical solutions, specifically within the space sector. As a mentor, coach, and leader, she launched the Women in Computing, Johns Hopkins University Chapter; the Women in Leadership Development program; the Northrop Grumman Lean-Agile Center of Excellence; and the NDIA ADAPT (Agile Delivery for Agencies, Programs, and Teams) working group. She received a Doctorate of Management at the University of Maryland with a dissertation focused on investigating the impact of leadership styles on software project outcomes in traditional and Agile engineering environments. She am also a Certified Agile Enterprise Coach and Scaled Agile Program Consultant/SPCT

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Robin Yeman

Robin Yeman is an award-winning author who has spent twenty-six years working at Lockheed Martin in various roles leading up to senior technical fellow building large systems including everything from submarines to satellites. She led the Agile community of practice supporting a workforce of 120,000 people. Her initial experience with Lean practices began in the late ’90s. In 2002, she had the opportunity to lead my first Agile program with multiple Scrum teams. After just a couple months of experience, she was hooked and never turned back. She both led and supported Agile transformations for intelligence, federal, and Department of Defense organizations over the next two decades, and each one was more exciting and challenging than the last. In 2012, She had the opportunity to extend our Agile practices into DevOps, which added extensive automation and tightened our feedback loops, providing even larger results. Currently, she is the Carnegie Mellon Space Domain Lead at the Software Engineering Institute at Carnegie Mellon. She is also currently pursuing a PhD in Systems Engineering at Colorado State University, where she is working on my contribution to demonstrate empirical data of the benefits of implementing Agile and DevOps for safety-critical cyber-physical systems.

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