Partnering to Deliver in the Era of Downsizing

By Cornelia Pool  |  Posted 05-07-2009

Partnering to Deliver in the Era of Downsizing

In today's unstable business environment, market volatility, rising operating costs and escalating competition have hit every business in some way. Covad, the owner and operator of one of the largest national broadband networks in the United States, has been no exception.

Covad faced challenges in meeting software delivery dates when I began managing the company's information technology services. My charter was to provide better IT options to more effectively support our expanding business and product portfolio--even as shrinking budgets and headcount combined to put enormous pressure on our business. 

Despite the challenges posed by the accelerating pace of change, we became energized by this change--and the initiative to improve our competitive position quickly resulted in a total transformation of IT services. 

New Technology, New Ideas

To start, we initiated a careful analysis of gating factors that could limit the throughput of our software and IT teams. We evaluated alternative methodologies and tried out several variables. At the end of this exercise, I adopted Scrum, an iterative incremental process commonly used with agile software development.

Since the process is team based, it allows us to manage resources more efficiently. And because it delivers projects iteratively, it helps us to better control the progress on projects. Scrum was also a key to transforming the organization through improved communications.

The next step was to find a trusted partner. We collaborated with Persistent Systems, an outsourced product development leader with deep telecommunications expertise. Our objective with Persistent was to work together in unique ways to drive change, namely by creating an interactive development cycle that would improve productivity. Everyone gets cost reductions from outsourcing, but my goal was to move beyond that and truly innovate.

With an eye on organizational productivity, I had to empower all stakeholders, from the Covad business owners in California to the support people in India. Critical success factors included setting the right strategic direction, building an all-star team and achieving operational excellence on a daily basis.

Early on it became clear that to make the program work on a larger scale, the individual teams needed to be self-organizing and self-managing. As a result, we merged two dominant software development paradigms: pure outsourcing, and Scrum. 

Before we could execute, we needed to resolve the innate tensions between the two models. The strategy was to put our business at the center of the IT initiatives, while leveraging the Persistent team's engineering expertise wherever possible.

Keys to Success

Even though distributed agile software development may seem at odds with a methodology that has its roots in small, co-located teams, Covad and Persistent adapted agile methodologies to work effectively across companies, supply chains and even continents. The teams managed the different time zones and other barriers in order to improve Covad's bottom line.

We also moved away from having communications flow through vertical teams--such as analysts, architects, developers and quality assurance--to forming cross-functional teams that communicated directly with each other. These functions could now also be distributed geographically. We maintained a strong onshore team that continues to set the strategic direction, in combination with strong operation execution among the teams.

Leadership, Agility, and Incentives: The Keys to Success

The Persistent-Covad partnership was based on a leaner team, improved communications, a deeper knowledge base of our processes, and setting firm expectations with clear metrics and exit criteria--all done with the goal of achieving higher productivity. The Persistent team understood our business as well as the impact that their work had on the company and our customers.

Hands-on leadership was another important shift. As long as each project was completed within predetermined parameters and productivity metrics (i.e., budget and timeline), the team was free to bring new ideas to the table.

This kind of autonomy encouraged developers to innovate from fresh points of view. The method built mutual trust among team members. Questions such as "How could we solve this problem?" and "If we change and do things a certain way, would it make things X percent better?" became standard practice. 

In other words, instead of simply being "the vendor" handing over a set of specs, Persistent became part of the solution. This approach went a long way in cultivating strong relationships and building confidence, as well as a knowledge base. It was a leap of faith, but it worked extraordinarily well.

In addition, the team adopted an agile development process that encouraged frequent inspection and adaptation; a leadership philosophy that encouraged teamwork, self-organization, and accountability; a set of engineering best practices that allowed for rapid delivery of high-quality software; and a business approach that aligned development with customer needs and company goals.

But taking agile development even further meant working across geographies with offshore team members. Building efficient, agile teams across a 12-hour time difference was non-trivial and required fine tuning. Best practices were developed, including daily communication, monitoring and reviews.

To achieve business process optimization, we incentivized team members (Covad and Persistent) with recognition, as well as "bonus" dollars and gift cards. Rewarding stellar work and initiative led to enhanced creativity and process innovation. The key for management was to give incentives and encourage the correct and desired behavior.

By design, Covad's leadership team made sure that all developers saw end results to gain an understanding of how they impacted the bottom line. This helped each team member feel like an all-around contributor with a sense of pride, rather than "just a coder." 

To-Do List

The "How-To" Boils Down to This:

1.    Put the business at the center of everything IT services set out to do.
2.    Define processes and communication guidelines.
3.    Partner with a vendor that has the right DNA in how they approach their work, that will align with your culture, and that is nimble enough to change as your needs change.
4.    Define metrics and exit criteria for each team to ensure operational excellence at all times.
5.    Build and nurture a process of continued improvement and optimization. Part of this involves rewarding the right behavior and reinforcement of processes and guidelines
6.    Reach a point of having repeatable successful results.

The Bottom Line

Our agile software initiative has resulted in a reduction in overall costs, as well as high uptime at lower costs, enabling us to reduce IT spend by 50 percent over three years. Availability of systems was consistently at or above 99.9 percent in 2008.

We have also substantially reduced time-to-market. Covad recently completed its 23rd on-time release since the beginning of 2006, when we started the initiative. In addition, we've reduced the release cycle to six weeks and delivered product introductions in a much more efficient and timely manner.

What's more, Covad's 2008 annual wholesale partner survey revealed greater customer satisfaction. Scores averaged 3.9 out of 5 in ordering, provisioning, installation and support, with ratings of "better/excellent" when compared to competitors' systems. Covad's online prequalification and ordering tools were rated an overwhelming strength of Covad's value to partners. 

Making all of these changes without quality or availability issues affecting the business was a monumental accomplishment for us. Today the company continues to establish the benchmark for automation and integration capability.

We knew when we set out to become more agile that we needed to change not only our environment but the cultures of both teams. We have truly redefined the vendor relationship and recognize that our partnership with Persistent has been a key ingredient to Covad's success.

While the business landscape continues to present challenges, an emphasis on innovative technology combined with a willingness to try new approaches will create rewarding opportunities for enterprises and the customers they set out to serve. To borrow a phrase from Albert Einstein: "Insanity is doing the same things over and over again and expecting different results."

Cornelia Pool is CIO of Covad. Previously she served as an IT executive with, South African retailer Pep, and Parmalat.