Why do some companies bring innovative IT solutions to a market better, faster and more efficiently, while others fall behind?
In this episode, our hosts Sandra and Sam invite you to a deep dive into the world of digital transformation as they delve into a peer-reviewed scientific paper of Mark van der Pas, that reveals how an organization accelerated their IT investments’ time-to-market by 40%. Discover the three key levers they used—insights that you can apply to your own projects!
How do we optimize Time-to-market? The need for speed.
The ability to quickly bring IT investments to market is critical in a competitive digital environment. Organizations face increasing pressure to accelerate the deployment of IT solutions while maintaining quality and alignment with business goals. Optimizing Time-to-market involves adopting strategies that streamline processes, enhance collaboration, and foster innovation.
The research investigates factors influencing Time-to-market of IT investments, by using a stage-gated process and identifying three key drivers: the number of concurrent projects, project budget size, and the incentive structure in place.
Number of Projects
The number of projects being executed simultaneously is positively correlated with time-to-market. Multitasking across numerous projects can slow down overall delivery. When projects are executed sequentially, the average time to market is faster than when the same projects are tackled simultaneously. This is due to time lost switching between activities and correcting errors that result from task switching. Furthermore, increased work-in-progress can create queues, increasing lead time and variability.
Project Cost
The research also establishes a positive correlation between project cost and time-to-market. Higher project costs generally indicate a larger amount of work, which tends to prolong the time needed for completion. However, this thesis acknowledges that this relationship is not always straightforward. For example, the cost of commercial software may not directly correspond to the effort needed to create it. Also, project costs can sometimes increase to speed up the time-to-market with additional staff or by minimizing procedures.
Incentive Structures
Different incentive structures significantly influence time-to-market. His study focuses on three types of incentives:
Plan accuracy, which is delivering projects according to the planned cost, time and quality, has been a major focus in IT. However, prioritizing plan accuracy can lead to slower time-to-market since project managers might add extra time to project estimates to buffer against potential delays.
Efficiency, which is the speed of execution and the cost to produce software. Efficiency incentives can be focused on lowering the cost per function point and speeding up time-to-market.
Impact, which is the effect of an IT investment, can be financial, related to customer experience, or be linked to compliance with new legislation.
These three incentives can sometimes create conflicting priorities. For example, optimizing for efficiency might reduce the overall impact of the project, and prioritizing plan accuracy might reduce efficiency.
Conclusion and the key message
Based on the research and our customers, the incentive structures focused on plan accuracy result in slower time-to-market, whereas efficiency-based incentives lead to the fastest time-to-market.
The study uses data from a large commercial organization over 10 years, showing that the organization improved its time-to-market by more than 40% due to changes in the amount of projects, average project cost, and incentive structure. The shift from plan accuracy to a combination of impact and efficiency incentives was associated with a 31% improvement in time-to-market. Overall, 15.4% of the variance in time-to-market could be explained by these three factors.
The key message of our new podcast episode is prioritizing the impact of the actual work instead of fixating on speed and costs.
Focusing on the value we create for our customers, our organization and for our society. Simply delivering projects faster and cheaper and turn our attention on the real impact they have. It’s about making a difference!
