This article is an excerpt from a white paper co-authored by Peter Alkema and Dr Jeff Yu-Chen from Gibs University.
Increasing competition in the financial services sector has motivated South African banks to embrace Agile and DevOps methodologies.
Agile is an approach that emphasises the product development process with quick, iterative product development.
Through the fundamental concept of test-and learn approaches, and frequent collaboration among teams, empowered IT developers are able to respond quickly to changing customer needs and desires.
Rooted in the Agile approach, DevOps is the practice that emphasises the partnership, communication and integration between software developers and IT operations personnel that may lead to improved business and IT benefits.
In South Africa, the 154-year- old banking giant Standard Bank embarked on a multi-year digital transformation focused strongly towards a shift to Agile methodology.
Barclays Bank is also enjoying the success of an 18-month long company-wide Agile adoption campaign.
Banks are also driving more agile business models which include how they run operations and IT projects.
Standard Bank has made a shift to Agile software development, which it credits with an improvement in service delivery and efficiencies of internal processes.
Chief Technology Officer Mike Murphy told McKinsey in a recent interview:
“By the end of 2016 we’re aiming to have the rest of Application Development organisation using agile development. Much more emphasis on collaboration and co-location, we gave teams autonomy, set a maximum time for sprints and each team member goes through training. Before agile our developers might post a 38 percent testing-failure rate; after agile a 3 percent failure rate.”
At a recent Africa DevOps Day industry conference Peter Rix, CTO of Barclays Africa, spoke about the bank’s Agile transformation programme that has put hundreds of people through training.
He noted too that Barclay’s Africa also built an Agile workspace called co-labs, which fosters innovation and collaboration for feature teams working on high profile, digital transformation projects.
Its investment in Agile is paying dividends through a motivated IT workforce, better partnership with business, greater trust levels and quicker speed to market with IT enabled projects.
A recent example of this is the bank’s newly launched open API for SMEs, which provides external parties with access to the banks products and services.
This is the first of its kind “banking as a service” (BAAS) product to be launched in South Africa and also supports the rise of the API economy as a key enabler of the type of digital disruption caused by Fintech.
The 12 key principles of Agile were agreed in 2001 and formed the “Agile Manifesto”, which is universally accepted as guiding serious attempts at embedding any agile methodology of software development.
Business and IT leaders who are looking for more agility in their software project teams should review these principles and consider how to make practical changes that encourage their adoption.
Importantly it is not an “all or nothing” approach – it can be a toolbox of ideas and approaches that should also be considered as cultural improvements, not only process or operational imperatives.
For example the fifth principle requires leaders to “build projects around motivated individuals, give them the environment and support they need, and trust them to get the job done”.
While at face value this is common sense and good practice, it is surprising how many projects fail because of environmental issues.
The hierarchical nature of organisations does not naturally form spaces within which multi-functional teams can self-organise and be semi-autonomous.
Today’s knowledge workers simply do not perform well in the command and control worlds of many large organisations and radical cultural changes are required.
Often the top level executives and bottom rungs of an organisation intuitively understand this; it is the middle management layers that often get in the way.
By definition, middle management exists to retain the structure of an organisation; it keeps people organised and under control.
Agile is definitely seen as a threat to this means of control and research shows that middle management will act like the immune system of an organism and isolate the Agile virus, cutting it off from the host and killing it.
The world is moving too fast and the stakes of disruptive innovation are too high for organisations to risk losing the benefits of Agile by allowing career managers to protect their empires.
Some organisations have managed to adopt Agile very successfully – and take most of their middle management team with them on the journey.
Suncorp, one of the largest banking and insurance companies in Australia, started a five year journey of Agile adoption led by the new CIO in 2007. After two years, the benefits were already apparent.
A key learning in the journey was the need for a “symbiotic relationship between line management and the Agile teams”.
While the Suncorp Agile journey was led from the top, it became clear that the traditional line manager’s handbook differs from the Agile way of working and “Daunting Dysfunctions” arose as a result.
The Agile way of building software encourages self-organisation and a large degree of autonomy by project teams.
This approach has resonated well with IT teams that want to build software quicker and collaborate closely with their customers as well as other teams across organisational boundaries.
However, this could be seen as disruptive or even a threat to the highly structured environment that management has created, and it might therefore become difficult for these software projects to be delivered.
Two examples of managerial dysfunctions on Agile projects at Suncorp was “back door conflict resolution” and “corridor interventions”.
Line managers exerted their authority counter-productively and this affected trust and relationships.
To help prevent such dysfunctions, Suncorp developed a social contract for project teams to counteract this influence, even stating, “We have zero tolerance for bullying”.
Characterising managers as bullies is an unfair generalisation but it is clear that the required symbiotic relationship between Agile teams and line managers required significant focus on the human aspects of software development.
Ultimately, they were successful and found that:
“Teams that have gone agile show an almost immediate increase in safety and morale. They feel appreciated, empowered, valued. This benefit, while hard to quantify, is firmly believed by senior leaders to be the key to sustainable success.”
It is essentially a test of leadership: Management is based on the transactional style, but Agile ways of working are creating an imperative for more “servant leadership” in the workplace.
Key aspects of successful Agile project environments – such as trust, empowerment and support – require a radical new way of thinking about how we lead people in organisations, and especially in the software projects that keep the business competitive.