Introduction

My client was an automotive manufacturer in the Fortune 10. The idea was simple—shift from IT as a cost center to a profit center. The way to achieve this was to develop revenue-generating software products.

Background

The IT organization had over 500 teams and was rooted in traditional software projects. After a lengthy annual planning process, projects ran over budget, struggled from crippling quality, and offered dubious benefits to users. To add to the challenge, this effort began just as COVID-19 was taking hold in the nation. With shutdowns, budget cuts, and uncertainty everywhere, we had to find a way to make progress.

Approach

Backed by the executive team, we focused our approach on two areas. The first was to build a highly competent near-shore development center that embodied exceptional software delivery with agile and DevOps practices. Second, we would invest heavily in a customer-first lean-startup approach to building software while training client Product Managers.

The near-shore development center was a partnership between myself and another consultant. Together, we built out the development center in Medellin, Colombia, hired developers, trained, and managed them to be better than vendor teams typically found at the client. We provided side-by-side comparisons to a random sample of 500 teams, focusing on core development metrics of speed, quality, and cost.

The product management engagement introduced new methods, including the use of one-page canvases to brainstorm new products and iterate quickly, qualitative and quantitative customer interviews, incorporating early adopters into the development process for feedback, and pre-selling the product. Creating one of the first-ever revenue-generating products also required intensive work with legal teams and accounting to allow payment and a simplified contracting process for the new subscription services.

Results

Within a year of starting, we saw incredible results.

• Launched a software product that was worth ~$7 million with existing customers and ~$30 million with its larger market
• Develop an ecosystem strategy to increase profits by 4x over the next three years
• Outline and execute a discovery process to reduce product-market fit risks
• Save the client ~$3 million by eliminating products with no return
• Operationalize a development team that worked 450% faster than other teams and had zero defects

During this time, we also started conversations to sell our product in B2B deals worth $8m, which would be the first of its kind for the enterprise.

Conclusion

My client was the IT cost center of an automotive manufacturer that required a significant transformation. During the year we worked together, we created a near-shore development center that was cheaper than other vendors and 450% more productive with fewer quality issues. At the same time, we proved it was possible to build profitable software products by focusing on methods and techniques that focus on customer value. This product had customers lined up to pay within 3 months and would bring in approximately $7 million with the existing user base. We worked transparently and had many people come see and learn how we worked to help introduce the wider group to the techniques and results possible.