People keep asking me about industrialization with its means and its goals. Where it starts and where it ends. Whether it's a good or a bad thing and of course, what the consequences for our IT profession would be.
Well you know, I just have an opinion about it like anyone else so I don't have a clear scientific underpinned definition of true industrialization of IT but I'll give you a few angles to look at it. The first lines on Wikipedia about industrialization start like this: "Industrialization is the period of social and economic change that transforms a human group from an agrarian society into an industrial one. It is a part of a wider modernization process, where social change and economic development are closely related with technological innovation…”
Projected onto my IT-profession, it means that industrialization of IT changes the way we are producing software and delivering IT-services in general from “hand-craftsmanship” towards an automated, outsourced and off-shored production-line. In other words, it changes the delivery model and in some circumstances even the business model dramatically.
Some people might argue that it is mainly about standardization and achieving more efficient, cost-reducing processes to create and sell products or services for a lower price. Well, the answer would be both a yes and a no. Efficiency is just the means but usually not the goal. The money freed by lower-cost production should be re-invested to deliver better and more innovative products or services to the clients. Why? Because unless you want to be the “cheapest-product-seller-of-the-world”, market and competitive distinction will come from continuous innovation of products and services with a decent price to deliver the margin.
Secondly, industrialization is an innovative process by itself. The change from handcrafted products and services towards component-based design and assembly with all the complications in technology and logistics is usually a much bigger challenge than just the innovation of a single product.
The same people often think that true industrialization is about hammering down the process into tiny little activities neatly positioned one after the other in a “conveyor belt” workflow.
Well, this is as outmoded as the Charlie Chaplin movie “Modern Times”. This is called the "Tailor way of thinking”. It’s not wrong by itself. But, for example, a simple flow-error stops the entire process, as is humorously shown in the movie. So meanwhile Tailor is surpassed by things like TPS, Toyota’s Production System also often called LEAN. The huge misunderstanding about LEAN is that its core is not about manufacturing efficiency at all. Of course the concept of "waste reduction" is the foundation of LEAN but you would not find a task like “Thy shall reduce cost or waste” in LEAN literature. On the contrary, the 14 basic principles of LEAN are mostly about a sustainable philosophy, collaboration, leadership, people development, partnerships, problem solving, and easy to grasp planning and reporting like with A3’s. Of course some process and technology aspects are involved but they are more conditional than leading. By creating people and teams in a collaborative environment, problem solving and innovation would be the culture to do things with waste and cost reduction almost as a “convenient side-effect”.
Thirdly, industrialization is about a major change in core-competence. To start with a definition of this concept: ‘Core-competence is the knowledge and experience that distinguishes a company from the competition, both qualitatively and quantitatively, in order to be able to design, produce, and deliver products or services clients will prefer (as opposed to those of the competition)’. So to become and stay competitive, core-competence needs to be very, very hard to copy. It cannot be about volume (alone), there needs to be a certain “specialty” which often, or even preferably, takes years to develop. If it is too easy, the competition can do it too. That also implies a serious risk. What if that “specialty" gets obsolete due to a special change or innovation? Well, there you see the need to continuously innovate to drive the change in core-competence to be able to stay ahead of the competition. And innovation was paid by? Yes, innovative industrialization.
On top of this, consider the IT-profession (as it was) as something that has developed itself as a commodity. Today, IT is everywhere and embedded in everything. Little tech-companies start and develop themselves with an amazing pace focusing only on what is really a competitive distinction and outsourcing as much as they can. These new companies pull away a lot of highly appreciated (but underpaid) core-competence and business from the traditional IT-players.
So, industrialization is not explicitely about making support processes better or more efficient. Support functions are about general governance, administrative, and infrastructural activities. Of course in a services organization like in IT control-functions tend to get bureaucratic, so usually there is already a lot to gain. But it’s just a first easy step. The main target of industrialization is the change of the primary process. After all, this is where not only the most volume is but also where the distinction has to come from. Being too lazy and protective about soon to be outsmarted craftsmanship or volume is a proven recipe for being pushed out of business. This is not only deadly in a competitive commercial environment but the economic crisis has proved that the same rules even apply for countries as well. Let alone internal divisions, departments, or functions. Sooner or later they will get either too expensive or just obsolete. Ready to be “vaporized” or outsourced to external partners.
Converging all the above (and now a new definition emerges) "Industrialization usually leads, or even must lead, to a continuous shift and innovation of production/delivery process, core competence and business model". A few examples: Apple’s distinction today comes from the design of its hardware, the marketing including the special retail, the look and feel of the software (most of it is given away for free!) and their supply chain with external partners to manufacture and deliver very large volumes of products. Oracle, IBM, and HP are triple-players. They all “produce” hardware, software, and services to leverage each other. Microsoft has bought (and sold) Nokia Mobile. SAP moved into the Cloud-space rapidly. Amazon and Google are leveraging their internet-presence to expand to other markets. All mentioned companies started their life with different delivery and business models but were clever enough to move in time.
To summarize, without relentless innovation (in order to achieve competitive distinction) both in process and in products, delivery and business models, core-competence, governance, and mainly and especially in the primary processes, there cannot be serious industrialization - industrialization to stay successful and grow - for all stakeholders, including own co-workers.
Have fun inno-strializing :)
(This article has been published on my old website earlier)