The Data Gap: Why Business Leaders and Their Development Teams Aren't Connecting
June 05, 2019

Dave Karow
Split Software

The race for customer-centric technology is heating up. Applications and online stores have seen major changes in recent years to boost organizations’ digital customer experience. Some of the front-runners in this race include:

■ SnapTravel, which revolutionized the travel booking industry by allowing customers to simply send a message via messenger and then receive the best travel options.

■ Netflix, which utilizes the huge amount of data it collects on its customers to ensure that the entertainment they recommend is always personalized.

■ Amazon (the current clear winner of this race), which offers customers everything from free two-day shipping, to live delivery tracking, to their innovative Amazon Lockers and Amazon Key.

This focus on customer-centric technology is the modern-day equivalent of the age-old phrase "the customer is king," meaning customer satisfaction is everything. Today, with the increase of online shopping and digital retail experiences, this ideology has evolved to focus on customers’ experience when using an organization’s e-commerce platform.

As a result, product development teams are coming under immense pressure to innovate at a relentless pace while trying to find the balance between competitiveness and quality. Ironically, however, the demand for rapid product development often comes at the expense of the customer experience.

A recent report published by Harvard Business Review shows that the majority of business leaders are not very confident that their organizations are getting the best return on their product development investments. Furthermore, 30 percent have little to no confidence in this process at all.

The report, Closing the Data Gap in Product Development, which is based on the responses of 169 Harvard Business Review readers, also brings to light that this lack of confidence is directly impacting business success, as more than 70 percent of those who participated in the report say they are not able to bring products to market faster than their competitors. This statistic does not reflect the fact that 50 percent of companies have implemented a responsive approach to development, and 70 percent say that their employees feel comfortable bringing up new ideas.

There is obviously a concerning disconnect between organizations, who are responding to the need for rapid product development, and business leaders, who are failing to see the benefits of this increase in speed.

According to the report, the main cause of this gap in confidence is a lack of sufficient data. 80 percent of executives say their confidence in their organization’s return on product development would be greater if decisions were made on data and not on intuition. This belief is supported by the fact that only 43 percent of companies believe that when data is available it is well-managed and accurate, despite more than half saying they somewhat or strongly agree that they have the tools they need to make data-based decisions on product development.

However, many organizations are about to see a change, as leaders are wanting to fill this gap with more product and market data. As indicated in the report, 90 percent stated that more detailed analysis of product performance in the market, and more testing with customers (as well as more feedback from customers) during the development process would increase their confidence in getting the best possible return on product investment.

The research also shows that organizations are leaning more towards a culture of continuous development and experimentation, as 71 percent are beginning to embrace a mostly team-based structure that involves a great deal of cross-functional collaboration. This is a huge change compared to only 19 percent who have been operating within that type of structure. Similarly, 70 percent of respondents indicate that they will embrace a more open and flexible structure where employees and teams are empowered to make many decisions, compared to just 23 percent utilizing this decision-making structure today.

Overall, this report shows that while development teams are working relentlessly to maintain an excellent customer experience in a world where instant gratification is the norm, they are battling with the shrinking development cycle times and traditional intuition-driven, hierarchical decision making. As a result, what we are seeing is more and more applications that have no business value that are driven only by the need for speed.

We can and should do better. By facilitating a culture of continuous improvement, organizations can decentralize decision-making, encourage experimentation, and foster data-driven product delivery.

Dave Karow is the Continuous Delivery Evangelist at Split Software
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