Financial services companies have traditionally shrunk from the notion of releasing applications that haven't been thoroughly baked and battled tested. But in today's digital world, companies that agonize over building the perfect app risk losing out to more nimble competitors. That's why many companies are turning to agile software development to push more products out the door and rescue other projects from oblivion.
This is certainly true for Principal Financial Group, a provider of insurance, retirement planning and other asset management services for corporate employees. In 2013, the Des Moines, Iowa, (needed?) company was struggling to prioritize and complete software projects. One insurance business unit in hyper-growth mode couldn't get group benefits products to market fast enough. A services unit was slogging through a project that had gone on for too long and had no end in sight.
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The units rescued their respective projects with an agile methodology in which IT and business unit leaders collaborate on feature requirements in bi-weekly sprints, after which they are regularly refined and upgraded. A feature here and a feature there enable the app to be built iteratively. If some features don't work, they can be nipped and tucked without breaking the app. "Two different strategies for two different business units and both were very successful," Principal CIO Gary Scholten tells CIO.com.
Neither group would have achieved success continuing to build software with the waterfall development model, in which IT would spend several months building software based on business requirements. But in a world where consumers prefer to interact with brands online and from mobile devices, time-to-market velocity and minimum viable products are prized over deliberation and polished code.
Agile begets business agility
Scholten knows the value of agile full well and so did his software engineers, who in 2013 began hosting internal hackathons and invited employees to submit ideas for projects they should work on and vote on them. These hackathons, along with the company's increased focus on building digital products that enable customers to better manage their money, paved the path for broader agile adoption at Principal. "It really helped to accelerate the 'Oh, you can do things differently here and helped drive the concept of agile’," Scholten says.
Doing things differently can be code for striving for more nimble product development and continuous deployment. But agile also poses a cultural shift for organizations whose employees are unaccustomed to moving faster. It's best to start slowly, according to a Gartner report published in March. The researcher firm cautioned against "big bang" approaches to agile that could trigger significant cultural disruption, particularly among the IT team. For example, an overemphasis on subject matter expertise, or role specializations can lead to feelings of inequality on the agile team, leading to bottlenecks in deliverables.
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Scholten says both Principal's business line leaders and its global IT staff of 2,600 workers were receptive to the agile move. As part of a corporate campus redesign the company built open workspaces designed to enable IT to build code in rapid sprints.
The increased reliance on agile had forced Principal to rethink its development architecture and metrics for how it measures productivity. "All of those things have had to change as a result of our movement toward agile," Scholten says.
Rather than have meetings every two months, business and IT peers met about projects within the cadence of the biweekly sprints, ensuring that the right stakeholders were present to make decisions. The result is that Principal operates like a software startup building proof of concepts and minimum viable products.
Build, launch, then watch the data
One product Principal developed using agile is My Virtual Coach, a personalized enrollment and education application for retirement plan participants. Like many bot technologies today, the coach conducts an interactive conversation with individuals, leaning on natural language processing. The app walks participants through scenarios and allows them to take immediate action as they step through the enrollment process. Another service, called Participant Experience, allots a score to participants based on their retirement preparedness and lets them allocate more funds to their 401K or other retirement plans.
While launching a minimum viable product enables Principal to get to market quicker it incurs its own set of risks and responsibilities. To mitigate the risk of launching a product with user experience gaps or other flaws, Principal monitors participants' clickstream, or how they navigated products online and from mobile devices. If several get stuck in certain spots along the way, Principal engineers and business analysts will adapt their coding sprint schedules to make the app more user friendly.
"We use data to make sure that we continually improve the process and that's where scaled agile is important," Scholten says. "In two-week sprints, we can say 'we had plans to go in this direction but we have to change it based on the data and what we're seeing’."
Reflecting on Principal's legacy of waterfall development, Scholten says that traditional model isn’t viable today. "I don't know how you could be successful in the digital world in waterfall," Scholten says.
This story, "Financial services firm adopts agile for digital development" was originally published by CIO.