In 2022, organizations, including mine, underwent rounds of cost optimizations starting with the cloud, followed by software, and eventually talent. It was a year of reducing spending across the organization to result in an optimal operating environment.
In its course, many technology companies were affected by the cost-saving exercises. Ultimately, layoffs were necessary for organizations to be EBITDA-positive and, eventually, profitable.
So what?
Leaders in the industry are forced to consider new ways to run a business while keeping operations lean. This means that organizations will reduce their travel & expenses unless necessary or reduce business entertainment where possible. While these are effective, organizations might not be able to optimize further their operating expenditures if it wasn’t a large amount, to begin with. One strategy is to optimize your operations.
Toyota’s lean manufacturing process has been a source of inspiration for many businesses for years. Whether in manufacturing or software development, there are many learnings we can take away to optimize operations to reduce the cost of production.
Seven wastes of software development
- Inventory
- Overproduction
- Extra Processing
- Transportation
- Waiting
- Motion
- Defects
Inventory Waste
Partially done work: Work in progress that has not been completed. This includes codes not checked in, tested, documented, released, and so on. If the task is started and not completed, it remains a work in progress.
Business Impact: The business impact is an obvious hit to profits. The business cannot write software that is not released. Human capital investments and time spent brings no Return on Investment to software that is not released, which damages the organizations’ health.
Lessons on Leadership: Eliminate waste by introducing work-in-progress limits to ensure work is completed.
Overproduction
Extra Features: Have you ever encountered a feature in the software that seemed entirely useless to you? What if the same feature is useless for most software users? Creating components that people do not use is wasteful. Extra features that make the software more complex with more lines of code than necessary result in the additional documentation and extra testing to ensure that these unused features still work. Overproduction is when many features in the software are not being used or valued by customers. This waste must be eliminated.
Business Impact: This is the cost and time spent on developers creating the features that will be a waste.
Lessons on Leadership: Eliminate waste by building a minimum viable product (MVP) model in software development. The 80/20 rule of 80% of the users using 20% of the software is an excellent guiding principle, the Pareto Principle.