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May 2020
Software Engineering
Becoming a Software-
Centric Business —
Best Path Forward in
an Uncertain Post-
COVID-19 World
Innovating in a post-pandemic world will pose new
challenges — from unpredictable shifts in customer
behavior to development teams that work from home
by necessity or choice. Adapting quickly to new
risks and opportunities requires a modern infrastructure
and application architecture, new processes and a
culture that rewards experimentation.
2 / Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World
Software Engineering
Executive Summary
Software is today’s engine of business. For customers,
software is the way they engage with your company — to
place orders, request service, apply for loans, view account
status, troubleshoot their Wi-Fi access points, and more. If the
preeminence of the mobile application wasn’t clear before,
overwhelmed call centers during the COVID-19 pandemic
drove home the point. For the workforce, software delivers the
information, analytics and automation needed to dynamically
adapt to unpredictable changes — like the onslaught of market
disruptions and anxious consumer behaviors due to the viral 9
outbreak and resultant preventive measures.
In short, the pandemic fast-tracked the need for every company across virtually every
industry to become software-centric. How well the company can deliver quality software and
software products that address real needs — and master virtual teams that can work from
anywhere — will have a direct effect on revenue, costs and customer satisfaction.
To learn what leading companies expect from software engineering, progress to date and
barriers, in mid-2019 we surveyed 2,628 business and technology leaders in North America,
Western Europe and across the Asia-Pacific region. (See Methodology, page 18.)
The study reveals a disconnect between leaders’ beliefs — that modern software delivery
can make or break the business — and their actions to date. Nearly all respondents (94%)
acknowledge that software engineering is important or critical to their company’s future.
The value they expect includes cost savings of 25% or more (89% of respondents), revenue
increases of 3% or more (96% of respondents), at least 45% faster time to market (72% of
respondents) and at least a 6% boost to customer satisfaction (96% of respondents).
And yet progress has been slow. While 80% of respondents have begun adopting a digital
engineering strategy, only 8% have crossed over to production. Top barriers are lack of
budget (cited by 82% of respondents) and “poor perception of the business impact of
software engineering” (37%).
Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World / 3
Software Engineering
Becoming a software-driven business doesn’t happen in one
go — it’s a journey. Companies that adopt the technology,
processes and culture to anticipate new customer needs and
quickly adapt to unforeseen risks lead the way.
This white paper offers concrete recommendations for overcoming both barriers by
converting software engineering from a cost center to a catalyst for competitive advantage.
Recommendations are organized in four sections:
	❙ Rethinking the technology foundation: Agility in an uncertain world requires accelerating
the transition to the cloud and modernizing applications to take advantage
of cloud scale, automation and elasticity.
	❙ Adopting a software product engineering mindset: Months-long release cycles are
nonstarters when consumer desires and business needs can do an about-face in an
instant.Agile methodology accelerates the cadence of innovation to days — even hours
or minutes.A focus on customer and business outcomes from the earliest stages of
product planning,what we call “outcome engineering,” helps make sure the product
meets real customer needs.
	❙ Reshaping the software delivery organization: The new working unit is the pod – an
autonomous team,typically with six to eight members that collectively have all the skills
needed to design and develop a prototype, conduct user testing and deploy the solution.
	❙ Fostering a culture that rewards experimentation: Every experiment is a success,
whether it proves or disproves a hypothesis. Each experiment uncovers new risks and
new opportunities.
Becoming a software-driven business doesn’t happen in one go — it’s a journey.
Companies that adopt the technology, processes and culture to anticipate new customer
needs and quickly adapt to unforeseen risks lead the way. Those stuck in reactive mode,
with months-long development cycles, will fall ever further behind.
Software Engineering
4 / Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World
Note: Percentages do not sum to 100% due to rounding.
Response base: 2,628 executives
Source: Cognizant
Figure 1
Rethink the technology foundation
Customer needs and the technology to address them are in a constant
state of change. Underscoring how fast emerging technologies can
become mainstream, many respondents reported using natural language
processing (59%), augmented reality (56%) and biometrics (41%).
Accelerating the pace of innovation requires transitioning from on-premise infrastructure and monolithic
applications to hybrid clouds and container-based applications. Social distancing will also require more
automation to enable virtual data centers and self-healing networks.
Hybrid clouds — create the “elastic enterprise”
Cloud migration remains a work in progress for our survey respondents. Only 33% have completed cloud
migration, while 51% are somewhere on the journey (see Figure 1).
Migration of apps from legacy architecture to
cloud-based architecture
Do not plan to migrate to cloud
Planning but not yet started
In process of migrating to cloud
Have migrated to cloud
33%
51%
14%
2%
1

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Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World / 5
Software Engineering
Quick Take
Freight leader quickly adapts to
changing market conditions
Challenge: A leading transportation company recognized that it needed a more agile business
model to keep up with massive changes taking place in the freight shipping market.
But, its aging and inflexible set of applications development methods made business agility nearly
impossible. Moving to the cloud would increase operational efficiency and enable the company to
quickly build appealing applications and software products for shippers and truckers.
Solution: We worked with the company to build a modern cloud platform and introduce Agile
methodology. More than 400 developers working in pods of six to eight people built microservices-
based modules for order management, pricing, rating, assets and yards, and more.
Outcomes:
	❙ 80% more electronic orders accepted automatically.
	❙ 40% more carrier payments processed automatically.
	❙ Up to 10 days of advance visibility for account representatives,
improving supply chain collaboration.
6 / Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World
Software Engineering
Applications can be moved to the cloud gradually. For early results, we recommend starting with heavily
used applications experiencing variable demand over the day; cloud services enable organizations to add or
remove resources in step with demand, paying only for what is needed. (See Quick Take on the preceding
page. For more insight on how to automate the scaling of cloud resources, read “Keeping the Lights on
During the Pandemic.”)
If the public cloud is farther away from your users than your data centers, reduce application latency by
caching frequently accessed content on internal servers. Edge caching works best with content that doesn’t
change often, such as product and pricing information for an e-commerce application, documentation,
and profile data for customers who use the application daily. (Learn more by reading “Social Distancing
Investments Made Now Will Continue Reaping Benefits Later.”)
Modern application architecture: take full advantage of cloud scale,
elasticity and automation
The pandemic introduced new consumer consumption behavior, including more online interactions, more
interactions outside normal hours and more video consumption. Some of these behaviors will fade over time,
but most will endure and new ones will doubtless arise. Companies that wait for the return of pre-pandemic
market behavior and business norms may wait themselves right out of business.
Simply “lifting and shifting” applications to the cloud provides limited value to the business. Taking full
advantage of cloud scale, elasticity and automation requires modernizing the application architecture.
Cloud-native applications take far less time to update than legacy applications because they are built from
self-contained components (microservices or containers) — often one per feature — that communicate via
application programming interfaces (APIs). As needs evolve, developers can add components and APIs
without changing what’s already there. (To learn more, read “Using Containers to More Effectively Manage
DevOps Continuous Integration.”)
Application transformation rarely requires a full rewrite. Typically it’s more practical and cost-effective
to reshape the existing legacy monolithic applications into a cloud-native form. (See Quick Take, page
8.) When we measured the impact of a microservices-based architecture for a large insurance client in
Canada, downtime decreased from 10% to nearly zero, application management overhead shrank 25% and
infrastructure costs dropped 30%.
Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World / 7
Software Engineering
Cloud-native applications take
far less time to update than
legacy applications because they
are built from self-contained
components (microservices or
containers) — often one per
feature — that communicate
via application programming
interfaces.
Software Engineering
Quick Take
8 / Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World
Cloud-native card payment
platform adapts easily to
new payment methods and
standards
Challenge: A multinational financial services company envisioned a fully digital payments
network. The old mainframe application had reached capacity and made it very difficult to
add country-specific features.
Solution: We started with three virtual pods, including members in the U.S. and India, and
scaled to 14 pods. The cloud-native payment platform approves or denies transactions
quickly — in part because microservices communicate with each other seamlessly.
Outcomes:
	❙ Better customer experience: Payments are approved in less than one-tenth the time it
takes to blink.
	❙ Faster pace of innovation: With microservices, the company can quickly introduce
country-specific features and support for new payment methods.
	❙ New revenue source: Our client can now offer value-added services for merchants:
analytics for targeted marketing campaigns and other decisions.

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Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World / 9
Software Engineering
Adopt a product engineering mindset
Shift your team’s focus from developing software applications
to developing software products. This transition is not trivial. It
requires a mind shift from building functions to serving customer
needs. Embracing the new mindset requires Agile methodology,
DevSecOps practices, automation and a focus on outcomes.
2
Agile and DevSecOps: accelerate delivery
Companies release working code in a fraction of the time needed with Waterfall development by using
Agile methodology and DevSecOps practices such as continuous integration and continuous delivery
(CI/CD). Be sure to loop in customers right from the beginning — in the ideation phase. It’s generally
accepted that 20% of defects stem from problems capturing business requirements.
1
In our experience,
the figure is closer to 30%.
Continue soliciting customer feedback throughout the development process, using it to improve each
successive iteration of the product.
Automation: reduce costs and free developers from repetitive work
In our study, 96% of companies had automated software development to some extent, and 94% had
automated testing. In our practice we’ve also seen good results from using application portfolio mapping
tools to assess performance, usage and business impact of all applications. Insights about feature usage,for
example, are useful for deciding which features to retain and which to switch off. Rationalizing the feature set
simplifies and improves the user experience, increases the overall value of the product and often reduces costs.
10 / Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World
Software Engineering
Outcome engineering: keep the focus on the customer
Human-centric design means starting each product idea by understanding the market, customer or
consumer needs, frustrations, goals and behavior — and coming back to them continuously throughout the
development cycle. In our survey, 61% of respondents said they had significantly embraced human-centric
design and design thinking, citing a variety of approaches. The top approaches are behavioral science,
analyzing big data to model consumer interactions and buying patterns (48%); field research, observing of
customers in their environment (48%); and tracking product usage via internet-connected sensors (41%).
Fewer respondents (16%) use predictive artificial intelligence (AI) to anticipate the consumer’s next action
based on previous behavior patterns.
Note: Only selected items shown.
Response base: 2,628 executives
Source: Cognizant
Figure 2
Approaches to understanding customer needs
0 10 20 30 40 50
We use predictive capabilities of
AI to anticipate customer needs
We track product usage and
gather user behavior insights
IoT, intelligent devices and sensors are employed
to gather inputs about needs and experience
Customer research is carried out by
spending time with actual users
We explore end-user needs using a
behavioral science framework 48%
48%
41%
36%
16%
Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World / 11
Software Engineering
Reshape the software delivery organization
into virtual pods
Handoffs between siloed design, engineering and QA
teams prolong release cycles. We recommend organizing
team members in pods — small, cross-functional, agile
teams that keep the customer at the center of the development process.
These teams perform all the tasks needed to successfully complete a
given project and deliver a specific product or solution.
In our practice we source pod talent from communities of people around the world with a specific skill set —
for example, product managers, user experience designers,full-stack engineers, architects, quality engineers,
machine learning specialists and voice interface specialists. Pods can work in physical locations such as design
and delivery studios — or, by necessity or choice, from home. “Virtual pods,” born of necessity during the
pandemic lockdown, enable companies to source talent from anywhere (see Figure 3).
3
Source: Cognizant
Figure 3
Virtual pod composition
UX/UI Designer
Full Stack Engineer
DevOps
Full Stack Engineer
Scrum Master
Quality Engineer
Product OwnerFull Stack Engineer
POD
12 / Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World
Software Engineering
In a post-pandemic world,where virtual product engineering is the norm, pod members need tools and
culture to collaborate virtually for ideation, prototyping, coding and testing.Virtual pods also require a
supportive culture, including:
	❙ Community: Community-building ideas include scheduled “lunch and learn” sessions and online
coffee breaks. An outlet for socializing is important for morale and spontaneous learning from
colleagues. To keep projects on track, consider a morning stand-up call and end-of-day retrospective
call for all pod members.
	❙ Communication: Teams need videoconferencing software,“presence” apps for finding an available
expert in a particular discipline and a whiteboarding solution for ideation.
	❙ Focus on business impact: Evaluate individuals and pods on how well their products improve key
performance indicators (KPIs) and meet business needs. Metrics might include traffic, time to market,
click-throughs, customer retention, revenue, cost savings, and the like. Keep in mind that measuring
business impact of the first release is challenging when there is no “before” metric. In this situation,
capture baseline metrics and measure improvements with the second release, ideally delivered within
weeks of the first.
New approaches to talent acquisition:
hiring, continuous learning and cocreation with partners
Modernizing software for outcome engineering requires talent in full-stack engineering, data science,
cloud-native architectures and Agile methodologies. Demand outstrips supply, with 49% of respondents
ranking lack of talent among the five top stumbling blocks to modern software engineering.
To acquire and retain top talent, consider these approaches:
	❙ Widen the net. Search for talent where people hang out (e.g., hackathons).
	❙ Offer robust continuous learning opportunities. Surprisingly, only 30% of survey respondents
provided training in house to fill the talent gap.
	❙ Advocate for corporate social responsibility (CSR). This is especially important to millennials and
Generation Z.
2
	❙ Establish and cultivate communities for all aspects of software product development.
Don’t overlook research, tools development and innovation.
	❙ Build relationships with partners that offer a deep bench of talent to supplement your own.
Partners can provide access to scarce skills that are hard to hire or build internally, providing some or
all pod members. (See Quick Take on next page.)
In our survey, 95% of respondents work with a solution provider or system integrator on their transition to
application transformation.

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Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World / 13
Software Engineering
Quick Take
Intrado expects to free up
$13 million annually through
cloud adoption
Challenge: Intrado (formerly West Corp) builds the software that powers services sold
by communications services providers, such as 911 calling, videoconferencing, call center
operations and messaging. More than 200 legacy applications used different platforms,
languages and middleware. Most applications depended on multiple other applications, so
deploying new code took up to 12 months.
Solution: We migrated the entire application portfolio to Pivotal Cloud Foundry — a
platform as a service (PaaS) solution that can be deployed on multiple public clouds. More
than 60 Pivotal specialists worked in pods, first identifying application interdependencies
and then transforming applications into reusable microservices.
Outcomes:
	❙ $13 million annual savings — money that can be reallocated to innovation.
	❙ On-demand deployment of new code, down from eight hours previously.
	❙ Faster time to market: new releases take one person-day, down from five
person-years previously.
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14 / Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World
Software Engineering
Culture: The key to long-term success
Culture can make or break software development. Notably, 95% of respondents say that the transition to
modern software engineering is culturally challenging (see Figure 4).
To foster a culture that rewards innovation, focus on three areas:
	❙ Team structure and collaboration: Build an operational structure that makes team collaboration the
norm. (See Quick Take, page 16.) We see good results from paired programming. Another approach is
to simply make two team members responsible for the same or related tasks and have them collaborate.
(For more, see “Seven Changes That Will Shift Your Software Development Approach for the Better.”)
	❙ Talent acquisition and retention: Specifically, reward based on merit, not tenure. The transformation
to a simpler, cloud-native architecture can help eliminate dependence on the few people who understand
complex monolithic applications built years (or decades) ago. Provide opportunities for people to
develop skills.
	❙ A “fail-fast, learn-fast” mindset: Encourage experimentation and treat failed experiments as learning
opportunities. (For more, see “Understanding How to Fail: The Essential Ingredient of Radical
Innovation.”) Reward and celebrate individuals and teams that improve products and processes. We
suggest measuring team performance based not on lines of code, but on velocity, quality, product impact
(traffic, click-throughs, revenue, etc.) and autonomy (the extent to which the team meets goals without
management interference). This comprehensive view of performance shapes work behavior and drives
cultural change.
Response base: 2,099 executives
Source: Cognizant
Figure 4
Business leaders see cultural transformation as a challenge
No, it was not culturally challenging
Somewhat culturally challenging
Yes, it was culturally challenging
62%
33%
5%
4
Software Engineering
Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World / 15
Cultivating a software-centric culture increases the visibility of the software engineering organization and its
value to the business. As noted earlier, 37% of survey respondents ranked “poor perception of the business
impact of software engineering” as a top obstacle to implementation. Outcome engineering — that is, clearly
linking software products to KPIs like revenue and costs — gives senior leaders a clear picture of the central
role of software in the business. This can have the effect of loosening up the purse strings for more budget,
called out by 82% of respondents as an impediment to continued progress.
Outcome engineering — that is, clearly linking software
products to KPIs like revenue and costs — gives senior leaders
a clear picture of the central role of software in the business.
This can have the effect of loosening up the purse strings
for more budget, called out by 82% of respondents as an
impediment to continued progress.
Water utility modernizes
customer experience — and
culture
Challenge: Severn Trent Water, a UK water utility, wanted to modernize its applications to
deliver a superior customer experience.
Solution: We worked with the utility to introduce Agile methodologies, tools and culture.
Pods included experts in DevOps and automation. We introduced new incentives to reward
team performance, and we ran walk-in clinics, Agile meetings open to all staff and brown-
bag lunch sessions. These programs brought people together and helped them become
comfortable with Agile culture.
Outcomes:
	❙ 300% faster application release cycle — from 12 weeks to four weeks.
	❙ 20% more time available for innovation.
	❙ 88% of employees agreed the new culture improved collaboration and communication.
	❙ 40% increase in first-time-right ratio.
Read more here.
16 / Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World
Software Engineering
Quick Take

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Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World / 17
Software Engineering
Looking ahead: Prepare to be nimble in uncertain
times — and never stop
Recognize that becoming a software-centric business is an ongoing process that requires significant change.
Where to begin?
For quick wins, start by modernizing legacy applications. By moving them to the cloud you can retire on-
premise infrastructure, freeing funds for innovation. And making software products easier to adapt to
changing consumer expectations provides a competitive edge.
Organize designers, engineers and QA specialists in agile pods with full responsibility for a feature or set of
features, speeding time to market. Embed a product manager in each pod whose responsibility is to solicit
customer feedback throughout the process — so what you deliver is what customers want.
As the plan progresses, find the right pace to reshape software engineering — not so fast that it disrupts
operations, not so slow that the business succumbs to more nimble, cloud-native competitors. Start with
discrete projects and products that have measurable business impact rather than back-office or “safe”
projects. Then build on their success to introduce the new thinking and processes across the organization.
Above all, cultivate the mindset that innovation and transformation are not one-time events but continuous
processes. Unpredictable events happen all of the time. Transformation efforts need to be ongoing so the
business gets ever better at anticipating change in customer behaviors and wants — always innovating to stay
one step ahead.
Start with discrete projects and products that have
measurable business impact rather than back-office or “safe”
projects. Then build on their success to introduce the new
thinking and processes across the organization.
Software Engineering
18 / Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World
Endnotes
1	 Capers Jones,“The Mess of Software Metrics,” Vol. 9.0, March 8, 2017, www.ppi-int.com/wp-content/uploads/2018/02/The-
Mess-of-Software-Metrics_Jones-C_2017.pdf.
2	 Jennifer Robison, “Millennials Worry About the Environment: Should Your Company?” Gallup, May 29, 2019.
Methodology
We surveyed 2,628 business and technology leaders across North America, Europe and Asia-Pac in mid
2019 to understand their thinking around software engineering, both building cloud-native applications and
transforming legacy environments, to operate in the modern digital world. Survey respondents included
primarily C-suite executives and vice presidents (60%), and directors and senior managers (40%) across
the following industries: banking and financial services; insurance; retail and consumer goods; and media,
entertainment, communications and technology.
Software Engineering
About the author
Allen Shaheen
Executive Vice President, Digital Engineering, Cognizant
Allen Shaheen is an Executive Vice President responsible for Cognizant’s
Digital Engineering practice. He is also a founding board member of the
Cognizant U.S. Foundation, a nonprofit organization established to expand the
STEM workforce in the U. S. by providing grants to non-profit organizations
that deliver education and skills programs, and other initiatives designed
for high school graduates, women, military veterans and other communities
seeking specialized technical skills for digital technology jobs. Previously, he
led Cognizant’s mergers and acquisitions strategy, and was Global Markets Leader for a number of other
Cognizant groups including the Advanced Solutions Group, Enterprise Applications Solutions, and Quality
Assurance and Engineering Practices. Allen can be reached at Allen.Shaheen@cognizant.com |
linkedin.com/in/allen-shaheen-a52101.
Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World / 19
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Paddington Central
London W2 6BD England
Phone: +44 (0) 20 7297 7600
Fax: +44 (0) 20 7121 0102
India Operations Headquarters
#5/535 Old Mahabalipuram Road
Okkiyam Pettai, Thoraipakkam
Chennai, 600 096 India
Phone: +91 (0) 44 4209 6000
Fax: +91 (0) 44 4209 6060
APAC Headquarters
1 Changi Business Park Crescent,
Plaza 8@CBP # 07-04/05/06,
Tower A, Singapore 486025
Phone: + 65 6812 4051
Fax: + 65 6324 4051
Cognizant
Cognizant is a leading product engineering company, creating impactful end-to-end digital products and solutions that connect brands with customers.
Delivering sustainable innovation, agility and a connection that inspires engagement and business transformation, we’ve worked with some of the world’s
largest leading brands. Cognizant has over 10,000 product, design and engineering professionals across a network of 25 studios in 11 countries and five
continents. Learn how Cognizant designs experiences and engineers outcomes that result in memorable interactions at www.cognizantsoftvision.com.
Digital Operations
Cognizant Digital Operations helps clients re-engineer, digitize, manage and operate their most essential business processes, lowering operating costs,
improving user experiences, and delivering better outcomes and topline growth. Across the practice, we are creating automated, data-driven platforms and
industry utilities. We help clients run better by applying traditional optimization levers, and we help them run differently by creating competitive advantage
through making their processes digital-ready, which often leads to more effective operating models and corresponding topline revenue growth. Visit us at
cognizant.com/cognizant-digital-operations.
About Cognizant
Cognizant (Nasdaq-100: CTSH) is one of the world’s leading professional services companies, transforming clients’ business, operating and technology
models for the digital era. Our unique industry-based, consultative approach helps clients envision, build and run more innovative and efficient businesses.
Headquartered in the U.S., Cognizant is ranked 194 on the Fortune 500 and is consistently listed among the most admired companies in the world. Learn
how Cognizant helps clients lead with digital at www.cognizant.com or follow us @Cognizant.
© Copyright 2020, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means,electronic, mechanical,
photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice. All other trademarks mentioned
herein are the property of their respective owners.
Codex 5451

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Accenture publishes its technology vision annually. It is a distillation of our extensive research over the course of the previous 12 months, the experiences of our research teams and the input of our clients. In it, we outline the emerging technology trends that forward-thinking CIOs will use to position their organizations to drive growth and high performance, rather than just focusing on cost-cutting and efficiency improvements. Business leaders now accept that their organizations’ future success is bound up with their ability to keep pace with technology. CIOs have to play a key role in helping these business leaders recognize and seize the opportunities enabled by new trends—but the price of progress will have to be paid, along with new risks assumed. We believe six technology trends will influence business over the next three to five years: Context-based services. Where you are and what you are doing will drive the next wave of digital services. Converging data architectures. Successfully rebalancing the data architecture portfolio and blending the structured with the unstructured are key to turning data into new streams of value. Industrialized data services. The ability to share data will make it more valuable—but only if it is managed differently. Social-driven IT. Realize that social is not just a bolt-on marketing channel. It will have true business-wide impact. PaaS-enabled agility. The maturing platform-as-a-service (PaaS) market will shift the emphasis from cost-cutting to business innovation, supporting rapid evolution for business processes that need continuous change. Orchestrated analytical security. Organizations will have to accept that their gates will be breached and begin preparing their second line of defense—data platforms—to mitigate the damage caused by attacks that get through.

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Becoming a Software-Centric Business - Best Path Forward in an Uncertain Post-COVID-19 World

  • 1. May 2020 Software Engineering Becoming a Software- Centric Business — Best Path Forward in an Uncertain Post- COVID-19 World Innovating in a post-pandemic world will pose new challenges — from unpredictable shifts in customer behavior to development teams that work from home by necessity or choice. Adapting quickly to new risks and opportunities requires a modern infrastructure and application architecture, new processes and a culture that rewards experimentation.
  • 2. 2 / Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World Software Engineering Executive Summary Software is today’s engine of business. For customers, software is the way they engage with your company — to place orders, request service, apply for loans, view account status, troubleshoot their Wi-Fi access points, and more. If the preeminence of the mobile application wasn’t clear before, overwhelmed call centers during the COVID-19 pandemic drove home the point. For the workforce, software delivers the information, analytics and automation needed to dynamically adapt to unpredictable changes — like the onslaught of market disruptions and anxious consumer behaviors due to the viral 9 outbreak and resultant preventive measures. In short, the pandemic fast-tracked the need for every company across virtually every industry to become software-centric. How well the company can deliver quality software and software products that address real needs — and master virtual teams that can work from anywhere — will have a direct effect on revenue, costs and customer satisfaction. To learn what leading companies expect from software engineering, progress to date and barriers, in mid-2019 we surveyed 2,628 business and technology leaders in North America, Western Europe and across the Asia-Pacific region. (See Methodology, page 18.) The study reveals a disconnect between leaders’ beliefs — that modern software delivery can make or break the business — and their actions to date. Nearly all respondents (94%) acknowledge that software engineering is important or critical to their company’s future. The value they expect includes cost savings of 25% or more (89% of respondents), revenue increases of 3% or more (96% of respondents), at least 45% faster time to market (72% of respondents) and at least a 6% boost to customer satisfaction (96% of respondents). And yet progress has been slow. While 80% of respondents have begun adopting a digital engineering strategy, only 8% have crossed over to production. Top barriers are lack of budget (cited by 82% of respondents) and “poor perception of the business impact of software engineering” (37%).
  • 3. Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World / 3 Software Engineering Becoming a software-driven business doesn’t happen in one go — it’s a journey. Companies that adopt the technology, processes and culture to anticipate new customer needs and quickly adapt to unforeseen risks lead the way. This white paper offers concrete recommendations for overcoming both barriers by converting software engineering from a cost center to a catalyst for competitive advantage. Recommendations are organized in four sections: ❙ Rethinking the technology foundation: Agility in an uncertain world requires accelerating the transition to the cloud and modernizing applications to take advantage of cloud scale, automation and elasticity. ❙ Adopting a software product engineering mindset: Months-long release cycles are nonstarters when consumer desires and business needs can do an about-face in an instant.Agile methodology accelerates the cadence of innovation to days — even hours or minutes.A focus on customer and business outcomes from the earliest stages of product planning,what we call “outcome engineering,” helps make sure the product meets real customer needs. ❙ Reshaping the software delivery organization: The new working unit is the pod – an autonomous team,typically with six to eight members that collectively have all the skills needed to design and develop a prototype, conduct user testing and deploy the solution. ❙ Fostering a culture that rewards experimentation: Every experiment is a success, whether it proves or disproves a hypothesis. Each experiment uncovers new risks and new opportunities. Becoming a software-driven business doesn’t happen in one go — it’s a journey. Companies that adopt the technology, processes and culture to anticipate new customer needs and quickly adapt to unforeseen risks lead the way. Those stuck in reactive mode, with months-long development cycles, will fall ever further behind.
  • 4. Software Engineering 4 / Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World Note: Percentages do not sum to 100% due to rounding. Response base: 2,628 executives Source: Cognizant Figure 1 Rethink the technology foundation Customer needs and the technology to address them are in a constant state of change. Underscoring how fast emerging technologies can become mainstream, many respondents reported using natural language processing (59%), augmented reality (56%) and biometrics (41%). Accelerating the pace of innovation requires transitioning from on-premise infrastructure and monolithic applications to hybrid clouds and container-based applications. Social distancing will also require more automation to enable virtual data centers and self-healing networks. Hybrid clouds — create the “elastic enterprise” Cloud migration remains a work in progress for our survey respondents. Only 33% have completed cloud migration, while 51% are somewhere on the journey (see Figure 1). Migration of apps from legacy architecture to cloud-based architecture Do not plan to migrate to cloud Planning but not yet started In process of migrating to cloud Have migrated to cloud 33% 51% 14% 2% 1
  • 5. Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World / 5 Software Engineering Quick Take Freight leader quickly adapts to changing market conditions Challenge: A leading transportation company recognized that it needed a more agile business model to keep up with massive changes taking place in the freight shipping market. But, its aging and inflexible set of applications development methods made business agility nearly impossible. Moving to the cloud would increase operational efficiency and enable the company to quickly build appealing applications and software products for shippers and truckers. Solution: We worked with the company to build a modern cloud platform and introduce Agile methodology. More than 400 developers working in pods of six to eight people built microservices- based modules for order management, pricing, rating, assets and yards, and more. Outcomes: ❙ 80% more electronic orders accepted automatically. ❙ 40% more carrier payments processed automatically. ❙ Up to 10 days of advance visibility for account representatives, improving supply chain collaboration.
  • 6. 6 / Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World Software Engineering Applications can be moved to the cloud gradually. For early results, we recommend starting with heavily used applications experiencing variable demand over the day; cloud services enable organizations to add or remove resources in step with demand, paying only for what is needed. (See Quick Take on the preceding page. For more insight on how to automate the scaling of cloud resources, read “Keeping the Lights on During the Pandemic.”) If the public cloud is farther away from your users than your data centers, reduce application latency by caching frequently accessed content on internal servers. Edge caching works best with content that doesn’t change often, such as product and pricing information for an e-commerce application, documentation, and profile data for customers who use the application daily. (Learn more by reading “Social Distancing Investments Made Now Will Continue Reaping Benefits Later.”) Modern application architecture: take full advantage of cloud scale, elasticity and automation The pandemic introduced new consumer consumption behavior, including more online interactions, more interactions outside normal hours and more video consumption. Some of these behaviors will fade over time, but most will endure and new ones will doubtless arise. Companies that wait for the return of pre-pandemic market behavior and business norms may wait themselves right out of business. Simply “lifting and shifting” applications to the cloud provides limited value to the business. Taking full advantage of cloud scale, elasticity and automation requires modernizing the application architecture. Cloud-native applications take far less time to update than legacy applications because they are built from self-contained components (microservices or containers) — often one per feature — that communicate via application programming interfaces (APIs). As needs evolve, developers can add components and APIs without changing what’s already there. (To learn more, read “Using Containers to More Effectively Manage DevOps Continuous Integration.”) Application transformation rarely requires a full rewrite. Typically it’s more practical and cost-effective to reshape the existing legacy monolithic applications into a cloud-native form. (See Quick Take, page 8.) When we measured the impact of a microservices-based architecture for a large insurance client in Canada, downtime decreased from 10% to nearly zero, application management overhead shrank 25% and infrastructure costs dropped 30%.
  • 7. Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World / 7 Software Engineering Cloud-native applications take far less time to update than legacy applications because they are built from self-contained components (microservices or containers) — often one per feature — that communicate via application programming interfaces.
  • 8. Software Engineering Quick Take 8 / Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World Cloud-native card payment platform adapts easily to new payment methods and standards Challenge: A multinational financial services company envisioned a fully digital payments network. The old mainframe application had reached capacity and made it very difficult to add country-specific features. Solution: We started with three virtual pods, including members in the U.S. and India, and scaled to 14 pods. The cloud-native payment platform approves or denies transactions quickly — in part because microservices communicate with each other seamlessly. Outcomes: ❙ Better customer experience: Payments are approved in less than one-tenth the time it takes to blink. ❙ Faster pace of innovation: With microservices, the company can quickly introduce country-specific features and support for new payment methods. ❙ New revenue source: Our client can now offer value-added services for merchants: analytics for targeted marketing campaigns and other decisions.
  • 9. Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World / 9 Software Engineering Adopt a product engineering mindset Shift your team’s focus from developing software applications to developing software products. This transition is not trivial. It requires a mind shift from building functions to serving customer needs. Embracing the new mindset requires Agile methodology, DevSecOps practices, automation and a focus on outcomes. 2 Agile and DevSecOps: accelerate delivery Companies release working code in a fraction of the time needed with Waterfall development by using Agile methodology and DevSecOps practices such as continuous integration and continuous delivery (CI/CD). Be sure to loop in customers right from the beginning — in the ideation phase. It’s generally accepted that 20% of defects stem from problems capturing business requirements. 1 In our experience, the figure is closer to 30%. Continue soliciting customer feedback throughout the development process, using it to improve each successive iteration of the product. Automation: reduce costs and free developers from repetitive work In our study, 96% of companies had automated software development to some extent, and 94% had automated testing. In our practice we’ve also seen good results from using application portfolio mapping tools to assess performance, usage and business impact of all applications. Insights about feature usage,for example, are useful for deciding which features to retain and which to switch off. Rationalizing the feature set simplifies and improves the user experience, increases the overall value of the product and often reduces costs.
  • 10. 10 / Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World Software Engineering Outcome engineering: keep the focus on the customer Human-centric design means starting each product idea by understanding the market, customer or consumer needs, frustrations, goals and behavior — and coming back to them continuously throughout the development cycle. In our survey, 61% of respondents said they had significantly embraced human-centric design and design thinking, citing a variety of approaches. The top approaches are behavioral science, analyzing big data to model consumer interactions and buying patterns (48%); field research, observing of customers in their environment (48%); and tracking product usage via internet-connected sensors (41%). Fewer respondents (16%) use predictive artificial intelligence (AI) to anticipate the consumer’s next action based on previous behavior patterns. Note: Only selected items shown. Response base: 2,628 executives Source: Cognizant Figure 2 Approaches to understanding customer needs 0 10 20 30 40 50 We use predictive capabilities of AI to anticipate customer needs We track product usage and gather user behavior insights IoT, intelligent devices and sensors are employed to gather inputs about needs and experience Customer research is carried out by spending time with actual users We explore end-user needs using a behavioral science framework 48% 48% 41% 36% 16%
  • 11. Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World / 11 Software Engineering Reshape the software delivery organization into virtual pods Handoffs between siloed design, engineering and QA teams prolong release cycles. We recommend organizing team members in pods — small, cross-functional, agile teams that keep the customer at the center of the development process. These teams perform all the tasks needed to successfully complete a given project and deliver a specific product or solution. In our practice we source pod talent from communities of people around the world with a specific skill set — for example, product managers, user experience designers,full-stack engineers, architects, quality engineers, machine learning specialists and voice interface specialists. Pods can work in physical locations such as design and delivery studios — or, by necessity or choice, from home. “Virtual pods,” born of necessity during the pandemic lockdown, enable companies to source talent from anywhere (see Figure 3). 3 Source: Cognizant Figure 3 Virtual pod composition UX/UI Designer Full Stack Engineer DevOps Full Stack Engineer Scrum Master Quality Engineer Product OwnerFull Stack Engineer POD
  • 12. 12 / Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World Software Engineering In a post-pandemic world,where virtual product engineering is the norm, pod members need tools and culture to collaborate virtually for ideation, prototyping, coding and testing.Virtual pods also require a supportive culture, including: ❙ Community: Community-building ideas include scheduled “lunch and learn” sessions and online coffee breaks. An outlet for socializing is important for morale and spontaneous learning from colleagues. To keep projects on track, consider a morning stand-up call and end-of-day retrospective call for all pod members. ❙ Communication: Teams need videoconferencing software,“presence” apps for finding an available expert in a particular discipline and a whiteboarding solution for ideation. ❙ Focus on business impact: Evaluate individuals and pods on how well their products improve key performance indicators (KPIs) and meet business needs. Metrics might include traffic, time to market, click-throughs, customer retention, revenue, cost savings, and the like. Keep in mind that measuring business impact of the first release is challenging when there is no “before” metric. In this situation, capture baseline metrics and measure improvements with the second release, ideally delivered within weeks of the first. New approaches to talent acquisition: hiring, continuous learning and cocreation with partners Modernizing software for outcome engineering requires talent in full-stack engineering, data science, cloud-native architectures and Agile methodologies. Demand outstrips supply, with 49% of respondents ranking lack of talent among the five top stumbling blocks to modern software engineering. To acquire and retain top talent, consider these approaches: ❙ Widen the net. Search for talent where people hang out (e.g., hackathons). ❙ Offer robust continuous learning opportunities. Surprisingly, only 30% of survey respondents provided training in house to fill the talent gap. ❙ Advocate for corporate social responsibility (CSR). This is especially important to millennials and Generation Z. 2 ❙ Establish and cultivate communities for all aspects of software product development. Don’t overlook research, tools development and innovation. ❙ Build relationships with partners that offer a deep bench of talent to supplement your own. Partners can provide access to scarce skills that are hard to hire or build internally, providing some or all pod members. (See Quick Take on next page.) In our survey, 95% of respondents work with a solution provider or system integrator on their transition to application transformation.
  • 13. Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World / 13 Software Engineering Quick Take Intrado expects to free up $13 million annually through cloud adoption Challenge: Intrado (formerly West Corp) builds the software that powers services sold by communications services providers, such as 911 calling, videoconferencing, call center operations and messaging. More than 200 legacy applications used different platforms, languages and middleware. Most applications depended on multiple other applications, so deploying new code took up to 12 months. Solution: We migrated the entire application portfolio to Pivotal Cloud Foundry — a platform as a service (PaaS) solution that can be deployed on multiple public clouds. More than 60 Pivotal specialists worked in pods, first identifying application interdependencies and then transforming applications into reusable microservices. Outcomes: ❙ $13 million annual savings — money that can be reallocated to innovation. ❙ On-demand deployment of new code, down from eight hours previously. ❙ Faster time to market: new releases take one person-day, down from five person-years previously. Read more here.
  • 14. 14 / Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World Software Engineering Culture: The key to long-term success Culture can make or break software development. Notably, 95% of respondents say that the transition to modern software engineering is culturally challenging (see Figure 4). To foster a culture that rewards innovation, focus on three areas: ❙ Team structure and collaboration: Build an operational structure that makes team collaboration the norm. (See Quick Take, page 16.) We see good results from paired programming. Another approach is to simply make two team members responsible for the same or related tasks and have them collaborate. (For more, see “Seven Changes That Will Shift Your Software Development Approach for the Better.”) ❙ Talent acquisition and retention: Specifically, reward based on merit, not tenure. The transformation to a simpler, cloud-native architecture can help eliminate dependence on the few people who understand complex monolithic applications built years (or decades) ago. Provide opportunities for people to develop skills. ❙ A “fail-fast, learn-fast” mindset: Encourage experimentation and treat failed experiments as learning opportunities. (For more, see “Understanding How to Fail: The Essential Ingredient of Radical Innovation.”) Reward and celebrate individuals and teams that improve products and processes. We suggest measuring team performance based not on lines of code, but on velocity, quality, product impact (traffic, click-throughs, revenue, etc.) and autonomy (the extent to which the team meets goals without management interference). This comprehensive view of performance shapes work behavior and drives cultural change. Response base: 2,099 executives Source: Cognizant Figure 4 Business leaders see cultural transformation as a challenge No, it was not culturally challenging Somewhat culturally challenging Yes, it was culturally challenging 62% 33% 5% 4
  • 15. Software Engineering Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World / 15 Cultivating a software-centric culture increases the visibility of the software engineering organization and its value to the business. As noted earlier, 37% of survey respondents ranked “poor perception of the business impact of software engineering” as a top obstacle to implementation. Outcome engineering — that is, clearly linking software products to KPIs like revenue and costs — gives senior leaders a clear picture of the central role of software in the business. This can have the effect of loosening up the purse strings for more budget, called out by 82% of respondents as an impediment to continued progress. Outcome engineering — that is, clearly linking software products to KPIs like revenue and costs — gives senior leaders a clear picture of the central role of software in the business. This can have the effect of loosening up the purse strings for more budget, called out by 82% of respondents as an impediment to continued progress.
  • 16. Water utility modernizes customer experience — and culture Challenge: Severn Trent Water, a UK water utility, wanted to modernize its applications to deliver a superior customer experience. Solution: We worked with the utility to introduce Agile methodologies, tools and culture. Pods included experts in DevOps and automation. We introduced new incentives to reward team performance, and we ran walk-in clinics, Agile meetings open to all staff and brown- bag lunch sessions. These programs brought people together and helped them become comfortable with Agile culture. Outcomes: ❙ 300% faster application release cycle — from 12 weeks to four weeks. ❙ 20% more time available for innovation. ❙ 88% of employees agreed the new culture improved collaboration and communication. ❙ 40% increase in first-time-right ratio. Read more here. 16 / Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World Software Engineering Quick Take
  • 17. Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World / 17 Software Engineering Looking ahead: Prepare to be nimble in uncertain times — and never stop Recognize that becoming a software-centric business is an ongoing process that requires significant change. Where to begin? For quick wins, start by modernizing legacy applications. By moving them to the cloud you can retire on- premise infrastructure, freeing funds for innovation. And making software products easier to adapt to changing consumer expectations provides a competitive edge. Organize designers, engineers and QA specialists in agile pods with full responsibility for a feature or set of features, speeding time to market. Embed a product manager in each pod whose responsibility is to solicit customer feedback throughout the process — so what you deliver is what customers want. As the plan progresses, find the right pace to reshape software engineering — not so fast that it disrupts operations, not so slow that the business succumbs to more nimble, cloud-native competitors. Start with discrete projects and products that have measurable business impact rather than back-office or “safe” projects. Then build on their success to introduce the new thinking and processes across the organization. Above all, cultivate the mindset that innovation and transformation are not one-time events but continuous processes. Unpredictable events happen all of the time. Transformation efforts need to be ongoing so the business gets ever better at anticipating change in customer behaviors and wants — always innovating to stay one step ahead. Start with discrete projects and products that have measurable business impact rather than back-office or “safe” projects. Then build on their success to introduce the new thinking and processes across the organization.
  • 18. Software Engineering 18 / Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World Endnotes 1 Capers Jones,“The Mess of Software Metrics,” Vol. 9.0, March 8, 2017, www.ppi-int.com/wp-content/uploads/2018/02/The- Mess-of-Software-Metrics_Jones-C_2017.pdf. 2 Jennifer Robison, “Millennials Worry About the Environment: Should Your Company?” Gallup, May 29, 2019. Methodology We surveyed 2,628 business and technology leaders across North America, Europe and Asia-Pac in mid 2019 to understand their thinking around software engineering, both building cloud-native applications and transforming legacy environments, to operate in the modern digital world. Survey respondents included primarily C-suite executives and vice presidents (60%), and directors and senior managers (40%) across the following industries: banking and financial services; insurance; retail and consumer goods; and media, entertainment, communications and technology.
  • 19. Software Engineering About the author Allen Shaheen Executive Vice President, Digital Engineering, Cognizant Allen Shaheen is an Executive Vice President responsible for Cognizant’s Digital Engineering practice. He is also a founding board member of the Cognizant U.S. Foundation, a nonprofit organization established to expand the STEM workforce in the U. S. by providing grants to non-profit organizations that deliver education and skills programs, and other initiatives designed for high school graduates, women, military veterans and other communities seeking specialized technical skills for digital technology jobs. Previously, he led Cognizant’s mergers and acquisitions strategy, and was Global Markets Leader for a number of other Cognizant groups including the Advanced Solutions Group, Enterprise Applications Solutions, and Quality Assurance and Engineering Practices. Allen can be reached at Allen.Shaheen@cognizant.com | linkedin.com/in/allen-shaheen-a52101. Becoming a Software-Centric Business — Best Path Forward in an Uncertain Post-COVID-19 World / 19
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