IT is an integral component in product development, helping to create and deliver products that meet the market’s demands. Too much reliance on IT can restrain flexibility while dragging down business agility. Reducing our ability to respond quickly enough or with sufficient autonomy.
Challenges of IT Dependency in Product Management
Business agility, often hampered by IT-related disruptions in features, components, or teams, faces challenges in time-to-market and innovation due to IT dependencies. A profound understanding of these complexities enables businesses to plan effectively, ensuring efficient resource allocation for product development while maintaining market creativity.
Concurrently, the importance of evolving IT strategies is echoed by Deloitte's Mainframe Market Pulse Survey 2020, involving 261 business and IT decision-makers. This survey emphasizes the critical role of mainframe-based technologies and the need for updating rules engines, with over half leveraging these engines to manage mainframe applications. Significantly, 88% consider modernizing their rules engines, and 38% of those initiating application modernization regard upgrading their rules engine as a priority.
Hard-coded rules, often scattered across applications, necessitate manual identification of all instances and dependencies, a time-consuming process that can lead to increased time to market time, costs, and risks. Hence, updating rules engines and adopting business rules management systems (BRMS) have become crucial priorities for mitigating these challenges.
Time-to-market delays
The product roadmap is essential for successful product management as it can help mitigate risks associated with IT dependency that could disrupt the development process. Gartner, Inc.’s research shows that only 55% of products make it to market on time due to these dependencies [1].
Thus, customer experience may suffer and revenue diminish if they wait longer than expected for new features or products. To maintain a competitive edge in the marketplace and keep customers happy, swift launching without disruptions is key — and this requires careful planning via an effective product roadmap.
Limited innovation
IT dependencies can significantly hinder innovation in product development. The limited access to resources and complex systems not only slow down the response to customer feedback and market trends but also constrain creativity and financial resources. This creates challenges in creating diverse and innovative products, emphasizing the importance of effective resource management for fostering innovation.
Research indicates that the way product architecture and its components interact can affect innovation performance. Technological dependencies between components can undermine innovation efforts, especially when product development is centered around existing architectures [2].
Furthermore, the integration of product development with IT operations (DevOps) and a focus on continuous delivery are identified as key methods to enhance innovation. These approaches emphasize automation and continuous monitoring, which can significantly increase the speed to market and reduce the cost of delivering new products and services. They also ensure higher-quality software and better customer adoption rates.
However, the full potential of these methods is often not realized due to legacy IT systems, outdated technologies, and complex management processes, which undermine innovation efforts [3].
Inefficient resource allocation
Effective resource management in product management is crucial, akin to strategic chess moves. Misallocation leads to resource shortages, inefficient processes, and communication gaps, causing project delays and inefficiencies, similar to poor chess strategies. This can result in overuse of assets, lack of expertise, and inaccurate forecasting. Poor resource management impacts financial health, project success, and organizational stability [4].
Strategies for Reducing IT Dependency
To mitigate IT dependency, strategies like agile methodologies, cross-functional collaboration, and continuous improvement are vital. Agile methods enable flexibility and quick response to changes. Collaborating across diverse teams breaks down barriers, aligning goals and priorities. Emphasizing process improvement leads to more efficient systems, enhancing product development productivity. These approaches collectively reduce IT reliance and boost efficiency.
Agile methodologies
Agile methodologies concentrate on empowered individuals and their interactions, ensuring the early and constant delivery of value. They allow for early testing and rejection of decisions, with feedback loops providing benefits not evident in traditional methods [5].
The benefits of agile include increased employee input, responsiveness to customer feedback, higher job satisfaction, faster fixes, and more cross-functional collaboration, among others [6].
Cross-functional collaboration
Cross-functional collaboration in IT and product development, akin to a well-organized ship's crew, enhances adaptability, customer connection, and creativity. This approach, supported by research, shows its effectiveness in driving innovation, especially during disruptions, by enabling quick environmental response and resource access, including diverse perspectives and skills.
Companies like CarMax demonstrate the success of this model in rapidly changing technological and customer landscapes. These teams often enjoy considerable autonomy and are more likely in supportive environments, contributing to their effectiveness [7].
Continuous improvement
Continuous improvement in product management, like a sailor's constant course adjustments, involves regular analysis and updates based on feedback and market trends. It utilizes tools like PDCA (Plan-Do-Check-Act) and root cause analysis (5 Whys) to enhance innovation and user experience. Continuous improvement is an ongoing process focused on incremental changes to processes, products, and personnel, aligning with methodologies like lean and agile [8].
Successful companies embed this concept into every aspect, continuously seeking innovations and performance improvements, and understanding its importance across all business areas [9].
Examples of companies that successfully adapted this concept are [10]:
- Toyota – Toyota's renowned Toyota Production System (TPS) focuses on efficiency, waste reduction, and continuous improvement, utilizing techniques like Just-in-Time (JIT), Kaizen, Kanban, and Andon.
- Amazon – Amazon has a deeply ingrained culture of continuous innovation, driven by constant experimentation, risk-taking, and customer-centricity.
- Apple – Apple emphasizes simplicity, aesthetics, and user experience in its design and development process, incorporating continuous improvement techniques.
- General Electric (GE) – GE is committed to excellence and efficiency through ongoing improvement initiatives, making continuous improvement a core aspect of its operational philosophy.
- Intel – Intel leverages continuous improvement to enhance product quality and customer satisfaction.
- IBM – Continuous improvement is integral to IBM's operational philosophy, deeply ingrained in the company's culture.
Business Rules Engines: A Solution for IT Dependency
Business Rules Engines (BREs) are crucial for navigating complex IT-dependent environments, streamlining decision-making, increasing compliance, and reducing IT dependency. BREs automate decision-making in varied business processes, handling complex data volumes and rules, such as government regulations and organizational policies.
BREs offer several key advantages [12]:
- Streamlined Decision-Making – BREs automate decisions, speeding up the process and enforcing compliance with business rules, which is a significant operational benefit. They provide a support system for rules-based decision management, making organizations more efficient and responsive.
- Enhanced Compliance and Auditing – By ensuring internal processes comply with regulations and laws, BREs prevent severe penalties and reduce the risk associated with manual processes. They also offer a consolidated view of decision-making history, allowing for easier management of software-related business rules.
- Increased Efficiency and Adaptability – By removing manual decision-making, BREs save organizations time and cost incurred due to manual errors. They make the system more agile and responsive to changes, aiding in updating and managing rules more effectively.
Overall, the use of BREs is akin to a compass in navigation, providing precision and direction in decision-making and policy adherence, making them indispensable in today’s fast-paced and complex business environment.
Real-world Examples of Business Rules Engines in Action
Using business rules engines has helped companies from numerous industries reduce their dependence on IT and become more efficient. To show the success of this approach, we’ll look at two sectors that have employed these tools – financial institutions and insurers.
In both cases, they’ve used them to automate procedures, increase regulatory compliance and improve decision-making power, enabling greater productivity whilst cutting down on reliance upon technology sources. We can easily understand how such examples demonstrate the efficacy of implementing business rule systems across a variety of businesses, with great results overall!
Financial institutions
The best example of BREs in action in the finance industry was the time, when interest rates were increased all around the world due to various macroeconomic factors. Normally, it could take these institutions weeks to implement changes because of the numerous ties and dependencies in the business logic. Thanks to BREs, changes can be applied in a matter of minutes [11].
Also, what's worth highlighting, operating on a living organism is risky. An environment where such changes can be safely tested is golden. Just like flight simulators that allow you to test maneuvers without being afraid of losing your life, whereas in a real-life they are life-threatening.
Reminder: Higson has a built-in sandbox testing module, where all business rules changes can be tested without breaking the whole business.
It’s clear that such automation has revolutionized how these companies operate. Just as ships find faster routes over time, so do firms when they embrace automated procedures within an industry like finance.
Insurance companies
In the insurance industry, Business Rules Engines (BREs) are essential for managing complex decisions and regulations. These systems automate decision-making processes like underwriting policies, calculating premiums, and processing claims, improving accuracy and consistency.
They enhance efficiency and speed in decision-making, reducing operational costs and improving customer satisfaction by processing claims and underwriting policies more quickly. BREs also enable effective risk management, identifying potential risks to mitigate losses and improve financial performance [13].
BREs help reduce IT dependency in the insurance industry by automating repetitive tasks, such as form processing and rate calculations, and removing human error from these automated tasks. This automation leads to quicker policy creation and faster claim payments, enhancing customer satisfaction. Furthermore, BREs offer flexibility by integrating with existing applications through APIs, eliminating the need for retraining on new platforms or UIs [14].
Sources:
[2] https://www.emerald.com/insight/content/doi/10.1108/S0742-3322(2013)0000030008/full/html
[3] https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/finding-the-speed-to-innovate
[4] https://www.planview.com/resources/guide/resource-management-software/cost-poor-resource-management/
[6] https://builtin.com/agile/benefits-of-agile
[7] https://www2.deloitte.com/us/en/insights/topics/strategy/cross-functional-collaboration.html
[8] https://www.atlassian.com/agile/project-management/continuous-improvement
[9] https://www.planview.com/resources/articles/lkdc-importance-continuous-improvement/
[10] https://blog.kainexus.com/continuous-improvement-companies
[13] https://research.aimultiple.com/business-rules-engine/
[15] Rev up your business rules engine, Deloitte, https://www2.deloitte.com/content/dam/Deloitte/us/Documents/about-deloitte/us-deloitte-innowake-ibm-business-rules-engine-digital.pdf
