1、The Art Of Software:The New Route To Value Creation Across Industries#GetTheFutureYouWantTHE NEW ROUTE TO VALUECREATION ACROSS INDUSTRIESExecutive Summary Software is a strategic capability,transforming the way businesses design their products and services,function,compete,and provide value to their
2、 customers.In todays rapidly evolving business landscape,every company must become a software company,regardless of its industry or sector.A significant 62 percent of organizations concur that software offers them a competitive advantage.Nearly 60 percent of organizations agree that software-driven
3、transformation is now a board-level topic.To stay competitive,organizations are accelerating their investments in software transformation:Our research shows that,on average,nearly 18 percent of R&D budgets are spent on software-driven transformation.Moreover,60 percent say their investment level is
4、likely to increase by 2025(by 9 percent from current levels,on average).Generative AI will accelerate software transformation:Our research shows that 72 percent of organizations will use Generative AI to augment software engineering in the next 12 months.Moreover,Generative AI will assist in writing
5、 1 among every 5 lines of code in the coming 12 months.Successful transformation has immense revenue potential quadrupling by 2030:Organizations expect software-based revenue as a share of total revenue to grow to nearly 30 percent(in FY 2030)from 7 percent(in FY 2022).Leading organizations are alre
6、ady enjoying benefits from software-driven transformation,from faster R&D to cost reduction and improved customer experience.2Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesExecutive Summary To realize a successful transformation,organizations s
7、hould follow a comprehensive approach based on six pillars:1.Strategize:Organizations need to align their software investment with their overall strategy to assess how the former can enhance their products and services;deliver value to their customers;and bolster their competitive positioning.Additi
8、onally,demonstrating a tangible ROI is crucial to securing management buy-in.2.Design:Today,only one in three(34 percent)organizations uses customer insights to adapt their software product and services design.A focus on adaptive,human-centric design,which can be adjusted in response to customer fee
9、dback,ensures relevance and competitiveness and promotes ongoing improvement.An architectural framework that focuses on standardization,modularity,and scalability is also essential.Organizations should integrate sustainability into software-design decisions to optimize data structures.3.Collaborate:
10、To transform into a true software organization,they must identify key software frontiers where partner support is required;assess existing suppliers and partners;and nurture long-term strategic partnerships with a range of ecosystem players.Collaborating with strategic partners can introduce the exp
11、ertise and agility required to capitalize on the benefits of software-driven transformation.Internally,fostering a software-centric and collaborative culture is key.4.Strengthen:Organizations also need to establish a comprehensive strategy to acquire critical skills related to software engineering,c
12、loud and data,cybersecurity,and artificial intelligence(AI).Organizations expect 39 percent of their workforce to be in software-based domains within the next three years.To merge the industry skills with the new software skills,they need to develop centers of excellence capable of supporting intens
13、ive training programs.5.Organize:Organizations should focus on building a model around software products and services.This will involve a combination of strong autonomous teams;3Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesExecutive Summary th
14、e model should be split by production or service perimeter;driven by client satisfaction;and apply agile and lean management principles,such as transparency,empowerment,collaboration,iterative delivery,and experimentation.6.Streamline:Integrating agility with standardized software factories,which en
15、dorse continuous integration and the utilization of standardized application programming interfaces(APIs)and micro-services enhances efficiency and value realization.As organizations integrate Generative AI into their software journeys,it is imperative to develop a clear vision,strategy,and roadmap
16、for prioritizing use cases.Additionally,there is a requirement to bolster testing capabilities and establish guardrails to ensure responsible and effective usage of Generative AI in software engineering.60%of organizations agree that software-driven transformation is now a board-level topic.4Capgemi
17、ni Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesThis report offers recommendations that organizations across industries may act upon to help them achieve success in a software-driven future.It primarily caters to business and technology executives acros
18、s strategy,innovation,product,engineering,R&D,digital,data,software,and customer experience functions.Drawing on insights from a comprehensive multi-sector survey of 1,500 senior executives(director level and above)from large organizations with annual revenue above$1 billion,this report establishes
19、the logic(“the why”)behind software-driven transformation and additionally focuses on the“how”of the transformation ahead.The recommendations span software-driven vision,design,talent,organizational structure,partnerships,methodologies,technologies,and architecture,and are corroborated by in-depth q
20、ualitative insights provided by more than 20 industry leaders.Who should read this report and why?5Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesIntroduction The global economy is entering a new software-led era.In this new environment,executiv
21、es no longer consider software to be simply a tool or add-on but,rather,a strategic asset that is the key to staying competitive and unlocking new value.Across industries,software and software-enabled technologies such as cloud,Internet of Things(IoT),high-performance networks(including 5G),and AI/M
22、L are accelerating innovation,crafting personalized customer experiences,managing product/architecture complexity,and introducing new revenue and business models.For instance:Multinational automaker Stellantis is launching a new business unit,Mobilisights,which intends to monetize all vehicle data a
23、s a core element of Stellantiss bid to generate 20 billion($21.4 billion)in annual revenue from software-related services by the end of the decade.1 Pharmaceutical firm Novartis has recently partnered with a Danish digital health startup,Dawn Health,to create Ekiva-MS,a patient companion app to supp
24、ort people living with multiple sclerosis.2 GE Appliances is personalizing the consumer experience:its SmartHQ consumer app generates custom recipes instantaneously based on food available in the users kitchen,while the Generative AI-based conversational interface answers users questions about the o
25、peration and care of connected home appliances.3 Retail giant Walmart is bringing its aisles to life within a virtual format,in which consumers can access fashion,style,beauty,and entertainment products and services through Roblox Metaverse.4 Software-driven transformation is at the core of the deve
26、lopment of products,services,and new business models built in a software-focused framework(see“What do we mean by software-driven transformation?”for the full definition).It includes redesigning products and services architecture,operating models and engineering processes,and the creation of“softwar
27、e-product organizations.”6Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesIntroduction Increasingly,organizations are defining,designing,and operating products,services,and business models around their software.However,they face numerous challeng
28、es across talent,technology,organization,and ecosystem orchestration.As organizations seek to establish a baseline for the transformative journey ahead,the“how”will be just as important as the“why.”To address these questions,we surveyed organizations from both transitional products and service organ
29、izations in the automotive,aerospace,life sciences,consumer products,industrial and capital goods,high-tech manufacturing,energy and utilities,telecom,retail,and banking industries and sectors.All these organizations possess either a an established or work-in-progress vision and strategy for softwar
30、e-defined products and services.To complement the quantitative insights,we also conducted in-depth interviews with representatives of these sectors.In this report,we focus on three key areas:01Why is software-driven transformation crucial?What is the size of this opportunity and what benefits will i
31、t provide to organizations?How can organizations overcome critical hurdles to harness the full potential of software-driven transformation?02037Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesSoftware is transforming customer expectations of prod
32、ucts/services and the organizations from which they buy them.To deliver on these,organizations need to develop new,software-defined,intelligent and connected products and services,and new business and operating models.They also need to build supportive alliances within their ecosystems.Our previous
33、research covers this topic extensively.5 However,transitioning and structuring an organization to create,build,and support these software-based connected products and services requires an extensive revision of value streams,organizational structures,skills and talent,ways of working,and culture.This
34、 research aims to understand these facets of software-driven transformation(see Figure 1).What do we mean by Software-driven transformation?8Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesFIGURE.1Key elements of a software-driven transformation
35、frameworkSource:Capgemini Research Institute analysis.SOFTWARE-DRIVEN TRANSFORMATION FRAMEWORKNew Business ServicesNew subscription and recurring models|On-de-mand features and transactionsTarget Operating ModelSoftware innovation mgmt.|Software delivery centers&collaboration model|Make or Buy|Chief
36、 Software Officer|GovernanceSW abstraction/HW DecouplingMiddleware/OS&hardware|API/Microservices|Lifecycle managementIntelligent and connected ProductsAlways up-to-date(OTA)|Edge computing|Big Loop Ecosystem playEnd-to-end digital continuum|Alliance and strategy developmentModel-based design for pro
37、ducts/services and software to address the complexityAI and Automation to accelerate design,production,and testingAgile development framework with proven toolchains for faster development and deployment Upskilling academy for skill development and merging software and industry skills Product Lifetim
38、e Value&Mgmt.Circular economy|Support and care|Upgrades and OTA|End of Life(EOL)Software TalentsSoftware academy|Acquisition&retention|Skilling|Software culture shiftUser ExperienceSeamless journey|Marketing/brand impact|NextGen CXE2E Software DevelopmentProduct-centricity|Agile transformation|Softw
39、are factory|Software development life-cycleBUSINESS MODELSSAFETY AND CYBER-SECURITYSUSTAINABILITYDATA MANAGEMENTSOFTWARE ORGANIZATIONSPRODUCT AND SERVICE ENGINEERING9Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesSOFTWARE IS REDEFINING THE FUTUR
40、E OF ORGANIZATIONS THEIR COMPETITIVE ADVANTAGE AND THE MARKETS THEY OPERATE IN0110Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesSoftware is bringing a new age of disruptions and opportunities Organizations are recognizing the fundamental role t
41、hat software plays in digital transformation.Software is dramatically changing how businesses operate,compete,and deliver value to their customers(see Figure 2).Imran Ansani,ex-head of product for retail industry vertical,edge computing at Dell,adds:“Once a hardware-centric enterprise,weve transform
42、ed into a holistic solutions innovator.In an era of ubiquitous hardware,our cutting-edge software and unparalleled managed services distinguish us from the rest.”Source:Capgemini Research Institute,Software-driven transformation survey,June-July 2023,N=1,500 organizations.FIGURE.2Software is fundame
43、ntally changing the way in which businesses operate%OF ORGANIZATIONS AGREEING TO THE STATEMENTS BELOWSoftware is critical to our future product/service strategy and roadmapSoftware will enable a new phase of disruption and innovation larger than the digital/internet era of the 2000sSoftware capabili
44、ties offer a greater competitive advantage in our industry than those offered by hardwareOur organization will lose market share in the next five years if we dont invest now in software skills and technologyMore than anything else,strong software capabili-ties will determine whether our company thri
45、ves in the coming years66%65%62%55%54%11Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesThe imperative of software adoption has driven organizations to transform themselves into software companiesOrganizations initially saw digital mediums as a w
46、ay to personalize offerings and connect with end users.This was the heart of the digital transformation of the late 2010s.Today,organizations are driven to transform themselves into software companies:To transition from a traditional telco into a genuine software company,Vodafone intends to add 7,00
47、0 software engineers to its European workforce by 2025.6 Agricultural equipment manufacturer,John Deere,now employs more software development engineers than mechanical design engineers.7 More than 12,000 individuals,constituting one-quarter of the workforce at Goldman Sachs,are software engineers.8
48、IMRAN ANSANIex-head of product,for retail industry vertical,edge computing at Dell“Once a hardware-centric enterprise,weve transformed into a holistic solutions innovator.In an era of ubiquitous hardware,our cutting-edge software and unparalleled managed services distinguish us from the rest.”12Capg
49、emini Research Institute 2023The Art Of Software:The New Route To Value Creation Across Industries*By“being a software company,”we mean that organizations are reconstructing their business models around software and,in doing so,transforming their business processes,organizational structures,and reve
50、nue models.Source:Capgemini Research Institute,Software-driven transformation survey,June-July 2023,N=1,500 organizations.FIGURE.3One in four organizations from traditional sectors already considers itself to be a software company*In 2020,AB InBev launched BEES,a business-to-business e-commerce plat
51、form to empower small and medium-sized retail partners and help grow their businesses.The platform captured$32 billion in gross merchandise value in 2022,a 60 percent year-on-year increase.9 Mercedes-Benz CEO Ola Kllenius adds:“We are also on a journey to become a software company.We will put superc
52、omputer-like performance into every single Mercedes.”10 Clearly,software-driven transformation will define the future of organizations across sectors.Our research confirms this:one-quarter of the organizations we surveyed already consider themselves software companies.An additional 32 percent say th
53、ey expect to be within the next 3-5 years(see Figure 3).Currently,one in three(33 percent)of organizations in high-tech manufacturing already considers themselves to be a software company.RetailHigh-tech manufacturingAerospace and defenseIndustrial and capital goodsConsumer productsLife sciencesTele
54、comEnergy and utilitiesAutomotiveBanking and insuranceAll sectors%OF ORGANIZATIONS AGREEING TO THE STATEMENTS BELOW.32%49%25%24%23%47%28%38%26%36%19%40%28%28%23%24%21%25%33%12%20%23%We believe our company is already a software company todayWe believe our company will be a software company in the nex
55、t 35 years25%of the organizations surveyed already consider themselves to be software companies13Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesHowever,organizations have taken only the first steps to develop their software capabilities.Only 2 p
56、ercent of organizations have scaled up the monetization of their software programs,with 12 percent piloting various monetization models.Organizations are accelerating their investments in software transformation On average,organizations invest 18 percent of their R&D budget on software initiatives.H
57、igh-tech manufacturing leads in this respect,with 21 percent of R&D investment in the industry going to software-driven transformation(see Figure 4).We also found that:66 percent of organizations say their investments in software-driven transformation have increased from last year(by 5 percent,on av
58、erage)Moreover,60 percent of organizations say their investment is likely to increase by 9 percent from current levels cumulatively by 2025Source:Capgemini Research Institute,Software-driven transformation survey,June-July 2023,N=1,500 organizations.FIGURE.4Organizations invest one-fifth of their R&
59、D budgets in softwareTelecomConsumer productsBanking and insuranceLife sciencesRetailEnergy and utilitiesAerospace and defenseAutomotiveIndustrial and capital goodsHigh-tech manufacturingAll sectorsAVERAGE%OF R&D ORGANIZATIONS SPEND ON SOFTWARE INITIATIVES18%21%20%19%17%17%17%17%17%16%16%14Capgemini
60、 Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesFollowing a deep dive into software investment patterns,we found that nearly one-third of strategies focus on engineering/R&D.This includes the build budgets(from design and production through to end-product
61、 maintenance),as well as tools supporting product/service development,such as product lifecycle management(PLM),digital twins,etc.(see Figure 5).Source:Capgemini Research Institute,Software-driven transformation survey,June-July 2023,N=1,500 organizations.FIGURE.5More than one-third of software inve
62、stments focus on product or services engineering60%of organizations say their investment is likely to increase by 9 percent from current levels cumulatively by 2025SOFTWARE INVESTMENTS,SPLIT BY FUNCTIONAL AREASoftware in product/services engineeringSoftware in customer-facing areasSoftware in operat
63、ionsAny other software investmentsAreas of software-defined transformation covered in this research34%23%28%15%15Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesIn this research,we focus on two components of software-driven transformation:softwar
64、e utilized in products and services;and the software for customer management(such as in marketing,sales,aftersales,etc.).In our survey 1,350 organizations say they have/are building a strategy to become a software-driven organization,with a focus on software-defined products services.The remaining 1
65、50 organizations focus on using software in operations only.The next chapter mainly focuses on insights from the majority of organizations that focus on software-defined products/services.16Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesGENERATI
66、VE AI WILL ACCELERATE SOFTWARE TRANSFORMATIONSeven in 10 organizations will be using Generative AI for software engineering in the next 12 monthsIncreasingly,software engineers are using Generative AI throughout the software development lifecycle,from business-needs analysis and writing agile user s
67、tories to assistance in writing software code,optimization,completion,testing and debugging,and monitoring.Our research shows that,today,30 percent of organizations are experimenting with Generative AI for software engineering.An additional 42 percent plan to use it in the next 12 months which showc
68、ases that only 28 percent of organizations will not be using Generative AI for software engineering in the next 12 months(see Figure 6).Note:Currently”is representative as at survey date;“next 12 months”represents the period from the survey date.Source:Capgemini Research Institute,Software-driven tr
69、ansformation survey,June-July 2023,N=1,500 organizations.FIGURE.6A majority of organizations either experiment with or plan to use Generative AI to assist software engineering in the next 12 months%OF ORGANIZATIONS USING AND PLANNING TO USE GENERATIVE AI TO ASSIST SOFTWARE ENGINEERINGCurrently using
70、Plan to use in the next 12 monthsItalySingaporeSwedenAustraliaUKJapanFranceGermanyIndiaUSNetherlandsSpainCanadaOverall30%42%42%38%33%45%40%36%36%38%42%23%27%33%23%48%30%39%18%50%23%40%33%27%38%46%51%31%17Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across Indu
71、striesGenerative AI will assist in writing 1 among every 5 lines of code in the coming 12 monthsGenerative AI already assists in writing nearly 1 in 8 lines of code,and this will increase to 1 in 5 lines of code in the next 12 months(see Figure 7).Note:Currently”is representative as at survey date;“
72、next 12 months”or next 3 years represents the period from the survey date.Source:Capgemini Research Institute,Software-driven transformation survey,June-July 2023,N=1,500 organizations.FIGURE.7In the next 12 months,organizations expect 1 in 5 lines of code to be generated with assistance from Genera
73、tive AI 67%of executives see Generative AI bringing the most value to IT as an enabler for driving innovation across functions.%OF CODE GENERATED THROUGH ASSISTANCE FROM GENERATIVE AICurrentlyIn the next 12 monthsIn the next 3 years12%19%37%18Capgemini Research Institute 2023The Art Of Software:The
74、New Route To Value Creation Across IndustriesGenerative AI has the potential to greatly enhance the productivity of software engineersLarge language models(LLMs)are uniquely placed to complement software engineering.Our recent research highlights that 67 percent of executives see Generative AI bring
75、ing the most value to IT as an enabler for driving innovation across functions.11 We also see strong productivity gains due to Generative AI(see Figure 8).Girish Mathrubootham,CEO of Freshworks,adds:“We use ChatGPT to write code.Software development used to take anywhere from eight to 10 weeks;now,i
76、t can be done in less than a week.”12 This will enable development teams to focus on more complex business problems.Note:Currently”is representative as at survey date;“next 12 months”or next 3 years represents the period from the survey date.Source:Capgemini Research Institute,Software-driven transf
77、ormation survey,June-July 2023,N=1,500 organizations.FIGURE.8Improved productivity gains from Generative AI for code generation PERCENTAGE OF TIME SAVED BY USING GENERATIVE AI TO ASSIST IN CODE GENERATIONNext three yearsNext 12 monthsCurrently15%26%43%Generative AI,however,cannot replace software de
78、velopers it can only complement their task and functions.It still needs to be supervised and tested.“Generative AI should not be considered a replacement for software developers,but more of a companion to help them be more productive,”says Marco Argenti,CIO,Goldman Sachs.13 Various protected,regulat
79、ed,and critical systems like those in medical devices,aerospace and defense,and automotive would require strong oversight and policy on the use of Generative AI intheir code.19Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesSUCCESSFUL TRANSFORMAT
80、ION HAS IMMENSE REVENUE POTENTIAL QUADRUPLING BY 20300220Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesSoftware and digital services revenue will make an outsized contribution through the 2020s.As Figure 9 highlights,software-based revenue was
81、7 percent of total organizational revenue in 2022;organizations expect this to double,to 14 percent,by 2025 and more than quadruple,to 29 percent,by 2030.Avid Swartsenburg,Head of Digital Strategy and Transformation at Singapore-based United Overseas Bank,shares:“Through digitalization and automatio
82、n,most conventional banks can conservatively expect cost reductions up to 20%in the near term.As the business and operating models of banks pivot towards digital,cost structures will evolve,with some savings being replaced by investments in technology capabilities,infrastructure,personnel,testing,an
83、d other digital-related expenses.”14 Ford is aiming to create a continuing revenue stream from software services,which will help even out the boom-and-bust cycles in the automotive industry.The company already has over 500,000 software subscribers,mostly in its commercial fleet business.CEO of Ford
84、Motor Company,Jim Farley,states:“We are in the hundreds of millions of dollars now in software revenue,with very healthy margins.We expect to increase that tenfold in the coming years.”15 Ericsson partnered with Deutsche Telekom to offer Mobile Network API software using the Vonage platform,which Er
85、icsson acquired in 2022 for$6.2 billion.Ericsson CEO,Brje Ekholm,says:We view the API as an attractive standalone business.It is predicted that revenue from mobile network APIs will grow to over$20 billion by 2028.16 In 2022,the global Software-as-a-Medical-Device(SaMD)market was already valued at j
86、ust over$19 billion and is expected to grow at a CAGR of 23.6 percent in 202332.17 21Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesSource:Capgemini Research Institute,Software-driven transformation survey,June-July 2023,N=1,350 organizations th
87、at have/are building a strategy to become a software-defined organization,with a focus on software-defined products/services.FIGURE.9Organizations software-based revenue as a share of total revenue is expected to grow to around 30 percent by 2030SOFTWARE AND DIGITAL SOLUTIONS REVENUE AS A%OF TOTAL O
88、RGANIZATIONAL REVENUEExpected share of revenue in FY 2030Expected share of revenue in FY 2025Current share of revenue(FY 2022)7%14%29%22Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesGrowing software revenue requires a transformation of business
89、 models and operating structures.This includes new methods of customer contracts and payments;organizations need to incorporate and scale leasing,micro-payments,on-demand,and subscription models to take advantage of software-based features and capabilities.Source:Capgemini Research Institute,Softwar
90、e-driven transformation survey,June-July 2023,N=1,350 organizations that have/are building a strategy to become a software-driven organization,focusing on software-defined products/services.FIGURE.10Software-based revenue as a share of overall revenue is expected to increase to 29%by 203029%of an or
91、ganizations revenue contribution is expected from software and digital solutions by 2030Energy and utilitiesConsumer productsAerospace and defenseIndustrial and capital goodsHigh-tech manufacturingRetailLife sciencesBanking and insuranceAutomotiveTelecomAll sectors29%39%32%32%31%28%28%28%26%24%23%23
92、Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesSource:Capgemini Research Institute,Software-driven transformation survey,June-July 2023,N=1,350 organizations that have/are building a strategy to become a software-driven organization,focusing on
93、software-defined products/services.FIGURE.11Several organizations have already realized significant software-driven benefitsOrganizations are already reaping significant benefits A majority of organizations are witnessing benefits from software-driven transformation including new revenue streams,an
94、improved customer experience,and faster R&D,enabling continuous innovation.%OF ORGANIZATIONS THAT HAVE ALREADY REALIZED SOFTWARE-DRIVEN BENEFITS52%62%73%86%50%Improved customer experience(e.g.,increase in NPS/CSAT score)Cost reductionCompetitive advantage(e.g.,increase in market share)Faster R&D in
95、existing products and servicesNew revenue streams based on software-defined products(including new services roll-out)24Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across Industries86%of organizations have seen the benefit of new revenue streams based on softw
96、are-defined products and servicesMoreover,software constructs can help in better managing complexity.For instance,in the telecom sector,software-defined networking(SDN)enables management of entire networks of devices,regardless of the complexity of the underlying systems.Moreover,a service-oriented
97、architecture will reduce this complexity significantly.In our previous research for the automotive sector,Christoph Hartung,President Cross-Domain Computing Solutions at Bosch comments:“With increasing reliance on software and electronics,managing the complexity of vehicle architecture is going to b
98、e extremely difficult-and mastering it is going to be even more challenging.It is a good sign that the OEMs are investing in the development of service-oriented architecture.”1825Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesFIGURE.12The infogr
99、aphic below gives some more examples of realized benefitsNEW REVENUE STREAMS90%of automotive companies say they generate new revenue streams by deploying software-defined products and servicesFASTER R&D CYCLE77%of banking and insurance and 75%of high-tech organizations saw a reduction in R&D and tim
100、e required to market their existing products and servicesIn 2022,automaker Mercedes-Benz made around$1.6 billion in revenue from software-enabled services.Britta Seeger,Member of the Board of Management of Mercedes-Benz Group AG,says:By 2025,we are targeting more than 2 billion($2.12 billion)from ou
101、r connected car park(subscription services).Our connected car park is forecast to grow by 60 percent in the next three years.This will have a huge impact on our software-enabled revenue.19HSBC built its Risk Advisory Tool on the Google Cloud platform to process multiple what-if scenarios real-time d
102、ata requests for intraday risk and capital management.Previously,HSBC ran limited scenarios manually.With the new tool,employees run multiple scenarios simultaneously to build portfolios that are resilient to many different outcomes.Owing to the use of this tool,the calculation speeds have become 16
103、 times faster than previously.2026Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesCOMPETITIVE ADVANTAGE67%of industrial and capital goods,66%of life sciences,and 64%of high-tech manufacturing organizations cite competitive advantage as a benefit
104、of software-driven transformation COST REDUCTION59%of industrial and capital goods organizations,59%of retail,and 55%of banks and insurers have reduced costs as a result of software-driven transfor-mation effortsNvidia has pivoted from hardware to software,hiring several software engineers and resea
105、rchers to put the organization at the cutting edge of AI.Manuvir Das,VP of enterprise computing,says,“We know we have the best combined hardware and software platform for Generative AI.”It is predicted that the rapid growth in Generative AI usage could result in$3 billion to$11 billion in sales for
106、Nvidia over the coming 12 months.21Low-cost airline easyJet will invest in the latest aircraft software from Airbus,designed to cut costs on jet fuel as a part of a flight-management system upgrade to be undertaken by end-2023.Airbus estimates that this upgrade will help easyJet save more than 98,00
107、0 kg of fuel per year per aircraft across its European network.22 CUSTOMER EXPERIENCE61%of automotive and 59%of consumer products organizations claim that software has enabled them to offer personalized,enhanced customer experiencesTo establish itself as a digital retail company,French supermarket C
108、arrefour developed the Sherpa Project to revamp its digital in-store back office and enhance customer service.Through the AI-powered u.care app,designed for store managers and associates,Carrefour has reduced the time required to send information between sales and the stores office.This enables empl
109、oyees to manage their time better and spend more time attending to customers.23 27Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesHOW TO REALIZE A SUCCESSFUL SOFTWARE-DRIVEN TRANSFORMATION0328Capgemini Research Institute 2023The Art Of Software:T
110、he New Route To Value Creation Across IndustriesMost organizations are in the early stages of their software-driven transformations A majority of organizations are focusing on software development.However,only a few are using software to drive transformation,as Figure 13 shows:A large majority(68 pe
111、rcent)are at the experimentation stage,either identifying application areas/use cases or implementing pilots/proofs of concept(PoCs)Only 29 percent of organizations have started to scale and utilize software to drive transformation with only 5 percent fully scaling identified use cases Source:Capgem
112、ini Research Institute,Software-driven transformation survey,June-July 2023,N=1,350 organizations that have/are building strategies to focus on software-defined products/services.FIGURE.13Most organizations are in the early stages of their software-driven transformationsMATURITY OF SOFTWARE-DRIVEN T
113、RANSFORMATION IN PRODUCTS/SERVICESWe have partially scaled the identified use cases for at least one product/serviceWe have implemented pilots/proofs of concept of the identified use cases for at least one product/serviceWe have fully scaled the identified use cases for at least one product/serviceW
114、e do not have any strategic mandate for adoption of software-defined products/servicesWe have identified specific application areas/use cases for software-defined products/servicesExperimentation stageTowards scaling24%36%5%3%32%29Capgemini Research Institute 2023The Art Of Software:The New Route To
115、 Value Creation Across IndustriesMauli Tikkiwal,IT Director at Johnson Controls,adds:“My experience with software has been to start small,fine-tune it,make it work,monitor it,showcase it,then scale up in phases.”68%of organizations are at the experimentation stage,either identifying application area
116、s/use cases or implementing pilots/proofs of concept(PoCs)MAULI TIKKIWALIT Director at Johnson Controls“My experience with software has been to start small,fine-tune it,make it work,monitor it,showcase it,then scale up in phases.”30Capgemini Research Institute 2023The Art Of Software:The New Route T
117、o Value Creation Across IndustriesSource:Capgemini Research Institute analysis.FIGURE.14A framework identifying critical success factors for software-driven transformation:Place customer experience at the core of software strategy Define an architecture migration roadmap for standardization,modulari
118、ty,and scalability Integrate sustainability as a key element in software design decisions Amplify velocity and quality through agile methodologies and software factories Accelerate software development with Generative AI Shape a software-product and services-centric organizational structure Develop
119、a strong software strategy for your organization Engage with strategic partners and the ecosystem on key initiatives Foster a collaborative software excellence cultureSTRATEGIZEDESIGNCOLLABORATEORGANIZE Create a comprehensive talent and skills approach STRENGTHENSTREAMLINE SOFTWARE-DRIVEN TRANSFORMA
120、TIONyour approach to software-defined products and servicesfor a human-centric,sustainable,and scalable software within the ecosystemyour talent and skillsto be software-product and services-centric through agile methodologies,software factories and Generative AI Building a software-driven organizat
121、ion:A six-pillar approachDrawing on our experience in working with leading global organizations and insights gleaned from this research,Figure 14 identifies several critical success factors for scaling transformation.31Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creat
122、ion Across IndustriesSTRATEGIZEDevelop a strong software strategy for your organization In our research,nearly 60 percent of organizations agree that software-driven transformation is now a board-level topic.However,as Figure 13(above)shows,only a few organizations can harness the full potential of
123、software to drive transformation.Organizations must have a strategy to decide which products and services should incorporate smart,connected,software-driven capabilities.Organizations need to map the software to the overall strategy to assess how it can improve products and services,provide value to
124、 the customer,as well as reinforce their competitive edge in the market.This requires new go-to-market approaches.In our research,only 40 percent of organizations say they have a comprehensive software-driven transformation strategy that incorporates timelines,roadmaps,dedicated resources,and fundin
125、g.3.1There is also a need to showcase ROI to ensure management buy-in.More than half(56 percent)of respondents rank leadership-related challenges among the top three barriers impeding software-driven transformation.When US-based manufacturer Stanley Black&Decker began its software-driven transformat
126、ion journey,it used an AI algorithm to design its new products.The pilot used a simple crimper,with the idea that,should it fail,the effort and resources involved would not be significant.Although skeptics within the organization believed that computer-generated designs would fail the physical stres
127、s tests,the pilot was successful and today AI is integral to product design.24 ngel Beltrn,Director Program Management at BMO(Bank of Montreal),adds:“To shift the mindset of the organization,it is important to have a solid internal communication strategy.At BMO,we conducted roadshows across many lin
128、es of business and technology,communicating the importance of software initiatives,the business value,and laying out the plan with a timeline.Through this,we were able to bring the organization on board.”A pivot to software-based business models requires a holistic vision,a well-articulated strategy
129、,innovative product and services development,and new organizational structures,operating models,and technology architecture.40%of organizations say they have a comprehensive software-driven transformation strategy that incorporates timelines,roadmaps,dedicated resources,and fundingyour approach to s
130、oftware-defined products and services32Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesDESIGN3.2Place customer experience at the core of software strategySoftware offers the opportunity to engage more deeply with customers through continuous cont
131、act and lifetime digital product management.Creating a more personalized and engaging customer experience should be at the heart of the software strategy and roadmap.Figure 15 shows that only one in three(34 percent)organizations uses customer insights to adapt their software product and services de
132、sign.Source:Capgemini Research Institute,Software-driven transformation survey,June-July 2023,N=1,500 organizations.FIGURE.15Organizations struggle to achieve a human-centric design for software-defined products and services For a successful,human-focused software strategy,organizations must:Focus o
133、n an adaptive,human-centric design:Understanding customer or user personas and their journeys will help organizations better empathize with customer needs and the context in which they operate.US-based multinational conglomerate 3M is an example of an organization that places a high value on human-c
134、entric design methodology,whether the focus is on physicians,nurses,technicians,or patients.25 Judy Ma,until recently a design director with 3M,shares an example:“Many patients often worry about whether their doctor is familiar with their complete medical history and understands their unique needs.H
135、ealthcare workers and doctors need to take the time to enter patient data into electronic medical record(EMR)systems while also trying to interact and engage with their patients.To simplify and humanize this process,our team at 3M developed an intelligent voice assistant powered by AI technology.Thi
136、s tool allows for the automatic capture of a fully structured%OF ORGANIZATIONS AGREEING TO THE STATEMENTS BELOW34%44%Customer data(product data,usage data,interactional data,etc.)isgathered continuously throughoutthe lifecycle and we act upon the resultant insightsWe have a strong focus on collectin
137、gand integrating customer feedbackinto software-defined product/service design and setting standardsfor a human-centric,sustainable,and scalable software33Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across Industriesclinical note in the electronic health reco
138、rd(EHR)directly from the patient-physician interaction.This happens in the background,freeing up the clinicians focus on the patient,resulting in more personalized care.”Encompass user experience throughout the product/service lifecycle:Products and services design should be built around a complete
139、user journey.Most organizations tend to build products and use cases in isolation.Human-centric design requires undertaking real-world usage-which consist of different platforms,scenarios,and interfaces.This should also consider the usage part of the product or service design a transition for tradit
140、ional product-selling organizations.For example,vehicular infotainment systems should be able to integrate user personal devices and/or interface with them,since most consumers tend to be primarily tethered to their personal devices.Such integration improves consumer engagement and allows unfettered
141、 access to personalized information and applications.Adapt software requirements based on customer feedback:The initial alignment of software requirements with business strategy is crucial,but adapting based on customer feedback is equally important.There is also a need to prioritize requirements al
142、igned with strategy,business impact,and technical feasibility.One of the many frameworks organizations use for backlog prioritization is Reach,Impact,Confidence,and Effort(RICE).26“Reach”refers to the number of users affected by the change;“Impact”refers to the business value of the change;“Confiden
143、ce”refers to the teams belief in their ability to implement the change;and“Effort”refers to the time and resources required.Kathryn Koehler,Engineering Director,Developer Productivity at Netflix,says:“We prioritize customer issues based on the RICE framework.We budget 50 percent of our teams capacit
144、y for new initiatives and 50 percent for KTLO keeps the light on activities and other team-based initiatives.We also work with developers to understand the key results that will indicate success or failure:the impact our work has on customers,not just we shipped the thing.”27 Updating documentation,
145、end-to-end tracking,and bi-directional traceability also ensure a clear understanding of safety,security,and compliance.34%of organizations use customer insights to adapt their software product and services design.34Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation
146、 Across IndustriesJUDY MAuntil recently a design director with 3M“Many patients often worry about whether their doctor is familiar with their complete medical history and understands their unique needs.Healthcare workers and doctors need to take the time to enter patient data into electronic medical
147、 record(EMR)systems while also trying to interact and engage with their patients.To simplify and humanize this process,our team at 3M developed an intelligent voice assistant powered by AI technology.This tool allows for the automatic capture of a fully structured clinical note in the electronic hea
148、lth record(EHR)directly from the patient-physician interaction.This happens in the background,freeing up the clinicians focus on the patient,resulting in more personalized care.”35Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesFORMULATE A COMPRE
149、HENSIVE APPROACH TO MANAGE OTA UPDATES EFFECTIVELYOver-the-air(OTA)updates refers to the system for updating software or firmware remotely.NASAs interstellar Voyager 1 and 2 received a software update beamed from 12 billion miles away!28 Recent research highlights that consumers expect 2-6 OTA updat
150、es per vehicle,per year by 2025.29 Tesla has released 90 software updates to date.30 Effective software updates are critical to any strategic plan that requires fast deployment of innovations and new features,enabling new data-driven services and revenue.OTA eliminates the need to recall products wi
151、th defects that can be fixed by software.For instance,recently,Samsung realized that a particular washing machine model posed a fire hazard.Conventionally,the organization would be required to recall these units to ensure customer safety,but this issue was resolved with an OTA update.31 Moreover,upd
152、ates are key to securing future revenue streams from digital business models.OTA updates can also help with compliance by ensuring the product satisfies all regulatory requirements.And finally,OTA extends the life of the product,thereby increasing circularity and sustainability.In the automotive ind
153、ustry,regulations such as UNECE regulation R156 require vehicle manufacturers to have a documented process for 36Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesOTA updates and make this process available to approval authorities on request.This m
154、eans that every aspect of the OTA software update process must be recorded and executed in a way that satisfies the regulation;otherwise,it will fail to receive certification.32 Manufacturers should prioritize standardization of the ability to receive software updates in all their smart,connected pr
155、oducts.To achieve this change successfully,they must:Prioritize a security-first approach.Manufacturers must incorporate security measures such as robust encryption and authentication systems.LG Electronics is working to develop post-quantum cryptography(PQC)technology for its in-vehicle infotainmen
156、t(IVI)systems.The organization aims to create a more secure connected-vehicle environment,encompassing key areas(including OTA updates).33 Organizations should deploy patches for existing applications,new features,and defect resolution.Micro-segmented,private connectivity ensures the authenticity of
157、 software and applications.Ensure safety via thorough test updates.OTA updates,when not executed correctly,have the potential to disrupt other components within a product,resulting in operational malfunctions.Such occurrences pose safety hazards,including critical system failures.To mitigate these r
158、isks,organizations must conduct comprehensive testing of updates prior to their deployment,ensuring compatibility with existing systems and safeguarding the products overall performance and safety.Moreover,organizations can design products in a way that allows roll-back to a version of the embedded
159、code that has been proven to work.For this,consider full virtualization or designing the architecture to store two versions of code,with an ability to flip from one to the other.Design operational processes by following CI/CD principles,supported by virtual and hardware in the loop(HiL)testing.Inclu
160、de processes for identifying when an update is required,for designing and building software in short release cycles,for rapidly(but thoroughly)testing new software,for implementing updates in a timely fashion,and so on.Define an end-of-life(EOL)plan for their connected product.EOL OTA strategy needs
161、 to have a roadmap and timelines for new-feature updates,technical support,security patches,and depreciation.Communicate to customers when the product will no longer receive updates and support.Also,in cases where full software updates are unfeasible owing to hardware obsolescence,consider updating
162、just the electronics hardware,or delivering targeted,critical security updates.37Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesDefine an architecture migration roadmap for standardization,modularity,and scalabilityThe various components of soft
163、ware initiatives must be scalable and capable of interaction with various other systems,including software stacks,communication channels,operating computing infrastructure,hardware platforms,and data management,storage,and analytics.Owing to the complexity of these systems,managing long-term operati
164、ng costs and performance levels becomes a critical challenge.Every such platform should,therefore,follow principles of standardization,modularity,and scalability(see Figure 16).An executive at a Canada-based bank adds:“An organization can never get 100 percent common components and architecture that
165、 align with every business teams needs.An organization has to build a centralized architecture that requires small degrees of specialization.”Efforts should be made to use open-source and industry standard solutions,while ensuring compatibility across these solutions.Our research shows that only 43
166、percent of organizations have a formal program that governs the adoption and use of open source.Source:Capgemini Research Institute,Software-driven transformation survey,June-July 2023,N=1,500 organizations.FIGURE.16A majority of organizations state that standardized,flexible,and scalable architectu
167、re is importantIT IS IMPORTANT FOR US TO.56%56%60%56%.create architectures that are standardized and scalable,with new functionality realized thorough software instead of additional hardware.ensure the architecture is flexible(extensible and interoperable)to/with future technology updatesensure the
168、architecture is flexible(extensible and interoperable)to/with future business requirements,products and features.transition a siloed architecture towards more centralized,consolidated software systems38Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across Indust
169、riesWhen deciding on an architecture,a few key areas need to be considered:Design using common standards and solutions:Organizations should base system design and engineering on open and widely followed standards and solutions,whenever such solutions exist.Organizations should also invest in industr
170、y-wide standardization efforts.Custom and bespoke solutions increase complexity and,as a consequence,uncertainty.Organizations should only use such solutions when required to tackle a unique challenge or build a solution that offers a competitive advantage.They should aim to standardize base compone
171、nts that do not create differentiation.A majority(62 percent)of organizations say they have a strong focus on architecture standardization for scalability.Flexibility and scalability:Software solutions should be interoperable and offer flexibility across various platforms(e.g.,cloud,on-premise,edge
172、computing).Factors such as lock-in and technical debt(the prioritization of speed of delivery of code over technical quality)should be given considered.Engineers should design systems to ensure future-proofing and the development of plug-in architectures to accommodate new features,solutions,and int
173、egration.Standard interfaces and APIs that can access the underlying data,algorithms,and processes offer a stable and standard interface.Less than half(48 percent)of organizations in our survey claim to have a highly scalable architecture that is experience,infrastructure,and sustainability aware.62
174、%of organizations say they have a strong focus on architecture standardization for scalability.48%of organizations claim to have a highly scalable architecture that is experience,infrastructure,and sustainability aware.39Capgemini Research Institute 2023The Art Of Software:The New Route To Value Cre
175、ation Across Industries Modularity and abstraction:Modularity facilitates upgrades and troubleshooting.It also supports multiple design roadmaps,each with its own architecture.This approach empowers organizations to utilize existing solutions,while retaining the option to sprint new features and sol
176、utions.However,it is necessary to strike a balance,as overly modular designs can introduce additional communication overheads.Such systems also add complexity and necessitate clearly defined boundaries and operations.Availability and reliability:Uptime and reliability are essential criteria for any
177、architecture decision.System decisions should be backed up by redundancy,allowing normal operations to continue,if required.All single points of failure(SPOFs)must be identified and backed up and load testing is essential.Architecture selection often involves both strategic and operational decisions
178、 and a trade-off between various factors.The outcome of the selection will have long-term consequences and,therefore,requires a farsighted vision and a clear roadmap.NGEL BELTRNDirector Program Management at BMO(Bank of Montreal)“To shift the mindset of the organization,it is important to have a sol
179、id internal communication strategy.At BMO,we conducted roadshows across many lines of business and technology,communicating the importance of software initiatives,the business value,and laying out the plan with a timeline.Through this,we were able to bring the organization on board.”40Capgemini Rese
180、arch Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesMany organizations focus on the short-term business impact of their software product,rather than longer-term value.This leads to unnecessary spending on the maintenance or continuity of legacy software products(s
181、ee Figure 17).This limits the availability for innovation and modernizing legacy software skewing towards end-of-life products and support over the long term.Source:Capgemini Research Institute,Software-driven transformation survey,June-July 2023,N=1,500 organizations.FIGURE.17Nearly 40 percent of o
182、rganizational software investments today focus on maintaining legacy productsADDRESS LEGACY AND PRODUCT SUPPORT LIFECYCLE THROUGH RATIONALIZATION AND REDUCING TECHNICAL DEBTForty-four percent of organizations also rank technical debt among their top three technology-related challenges to software-dr
183、iven transformation.One key factor is quantifying how much technical debt an organization carries.Progrexion,a US-based credit report repair company,measures its technical debt against the key technology metrics of supportability,expected remaining life span,stability,and the additional attributes o
184、f business criticality and strategic alignment.34 39%of organizational software investments today focus on maintaining legacy productsSPLIT OF CURRENT SOFTWARE INVESTMENTS Daily operations Modernization of systemsLong-term strategic initiatives39%33%28%41Capgemini Research Institute 2023The Art Of S
185、oftware:The New Route To Value Creation Across IndustriesCloud-based capabilities can also reduce existing technical debt.The concept of a“coreless enterprise”is also gaining ground to scale transformation.The coreless approach is based on modular,microservice-based architecture,allowing businesses
186、to tailor different areas of the digital lifecycle,integrate best-of-breed solutions,and upgrade redundant functions.This flexible,composable blueprint also eliminates disruption and downtime caused by service and infrastructure updates.In our research,24 percent of organizations are already using m
187、icroservices,and an additional 31 percent plan to use them for their software delivery in the next 12 months.Moreover,Generative AI has the potential to transform legacy code refactoring by analyzing thousands of lines of code and decoupling dependencies.Converging microservices and Generative AI ca
188、n improve the efficiency,agility,and quality of software development.In our research,organizations share the following best practices to manage technical debt(top five ranked):Ringfence a portion of investment to modernize legacy code and systemsInclude a governance structure to tackle technical deb
189、t in Agile-DevOps workflowFocus on high modularity,microservices architecture,and/or low-code platformDeveloper education and awarenessChange ways of working and development culture010402050342Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesInteg
190、rate sustainability as a key element in software design decisionsSustainable software engineering prioritizes long-term energy efficiency and environmental considerations.It encompasses streamlined architectural design and development,and ongoing maintenance of both software and hardware,while conti
191、nuing to meet expected quality standards and business needs.In our survey,83 percent of organizations agree that software-driven transformation will reduce carbon footprint.Yet,most organizations still fail to measure the environmental impact of their software initiatives.Our survey indicates that:O
192、nly 28 percent of organizations measure the environmental impact of their software development Only 27 percent have an internal cost of carbon for their software projects Along with reducing carbon footprint,sustainable or green software development also offers benefits including reduced energy bill
193、s and improved performance(applications developed with reduced computational power are faster,more responsive,and more reliable).It is crucial,therefore,to ensure sustainability as a pillar of the software architecture,as well as the design of specific software modules.Paul McEwen,Global Head of Tec
194、hnology Services for UBS,comments:“The way we design and build our applications has a direct relationship with how much carbon they emit.With a better understanding of the impact our application designs have on the environment,we can make choices that have a more positive impact on the planet.”3583%
195、of organizations agree that software-driven transformation will reduce carbon footprint.43Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesBelow,we highlight a few best practices for a sustainable software design,based on learnings from our previo
196、us report on sustainable IT,as well as insights shared by industry leaders:Data storage consumes large amounts of energy and must be factored into an organizations sustainability strategies.Organizations need to optimize algorithms and data structures to reduce computational complexity and energy co
197、nsumption.28%of organizations measure the environmental impact of their software development 27%of organizations have an internal cost of carbon for their software projects 19%of organizations measure the energy impact of pre-production development and testing of applications In our previous researc
198、h on sustainable IT,we found that only 19 percent of organizations measure the energy impact of pre-production development and testing of applications,and only 21 percent measure the sustainability impact of the production environment(live applications).Conducting a sustainability impact assessment
199、of the entire lifecycle helps identify areas of improvement.36 The choice of application architecture is a determining factor in software power consumption and resource utilization.Microservices architectures,for example,can be used to apply innovations such as containerization(bundling code with al
200、l the files and libraries that an application requires to run on any given infrastructure)and serverless computing.Containerization enables teams to move workloads to more energy-efficient locations,and 44Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across Ind
201、ustriesserverless architectures offer even greater efficiencies by allocating cloud resources to applications only when those applications are required,saving both capacity and energy usage.37 Efficient code saves processing power as well as energy.Organizations can achieve coding efficiency through
202、 methods such as optimizing algorithms,reducing redundancy,and offloading tasks to less energy-intensive systems.Moreover,regular code reviews both automated and manual help maintain efficiency.Generative AI code assistants also enable developers to write better code more efficiently,supporting sust
203、ainability.Organizations should also focus on developing long-term reusable code that is modular,reliable,and well-organized,and that enables developers to build upon existing systems with fewer new lines of code.Defining key performance indicators(KPIs),setting up a carbon cost for software develop
204、ment,fostering sustainable employee behaviors and attitudes and making environmental impact is a key consideration in the selection of IT vendors are equally crucial activities.45Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesCOLLABORATE3.3Engag
205、e with strategic partners and the ecosystem on key initiatives Ecosystems comprise comprise multiple stakeholder groups chipset providers,hardware and sensor vendors,cloud and platform providers,connectivity providers,testing and certification agencies,cybersecurity services providers etc.Collaborat
206、ing with strategic partners can introduce the expertise and agility required to take full advantage of the benefits of software-driven transformation.To become software-driven,organizations must identify key software domains where partner support is essential;evaluate current suppliers and partners;
207、and establish long-term strategic partnerships with ecosystem players.Our research indicates that fewer than half of organizations intend to execute core functions and competencies in-house,preferring instead to partner with software or technology vendors,or to carry them out in parallel with in-hou
208、se development(see Figure 18).Source:Capgemini Research Institute,Software-driven transformation survey,June-July 2023,N=1,500 organizations.FIGURE.18Nearly half of organizations prefer to engage strategic partners for software advisory,core engineering,Over-the-Air(OTA)and services developmentDISTR
209、IBUTION OF ORGANIZATIONS DEVELOPMENT CHOICES FOR SOFTWARE INITIATIVESNew competencies(such as cloud engineering,analytics,IoT,AI/ML,etc.)Run operationsCustomer and user supportHardware-software co-integrationTransformation/change managementProduct and program management supportSoftware architecture
210、design,build,and scaleWorkstreams such as product testing,technicalpublications,etc.Sustenance/Improvements of legacy code basesSoftware product strategy,business model,go-to-market(GTM)advisory servicesOver-the-air(OTA)Core engineeringServices development and maintenance31%48%20%31%48%21%33%48%19%3
211、2%48%20%30%47%22%32%47%21%33%44%22%37%44%19%37%43%19%39%42%18%40%38%22%42%37%21%31%31%37%Prefer in-houseBothPrefer to partner with software/tech vendorswithin the ecosystem46Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesOne of the key junctures
212、 in any software-development initiative is the decision on the build versus buy strategy(whenever buying is applicable),which involves a trade-off between various operational and strategic options.It BUILD VERSUS BUYFIGURE.19Decision factors for build vs.buy decisions for software developmentshould
213、be noted that not all needs are covered by already developed solutions(for instance,in the automotive industry,there is no there is no off-the-shelf CarOS).Organizations should invest in building the software that gives them a competitive advantage.DECISION FACTORBUILD ADVANTAGES BUY ADVANTAGESFACTO
214、R DECISIONS Compatibility,adaptability,and integration Full access to code Market-tested,with known features and capabilities Rapid testing and prototyping Faster adoption Data privacy and security Level of integration Current open-market solutions Technology advantage vs.parity Packaged solutions w
215、ith easy adoption and implementation Easy testing and PoC Prioritization and importance of feature development Scalability and adoption Prioritization of feature and capability development Focus on solutions without bloatware Future-proofing Technology and platformsFeatures and capabilities Software
216、 development is an expensive proposition;related decisions need to have clear strategic goals and outcomes(see Figure 19):47Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesSource:Capgemini Research Institute analysis.DECISION FACTORBUILD ADVANTAG
217、ES BUY ADVANTAGESFACTOR DECISIONSPerformanceDocumentation,training,and supportSpeed to market or adoptionLong-term support requirements Tested configuration and market benchmarks Established service level agreement(SLA)Downtime consequences Scale and demand change over time Performance testing,targe
218、t,and standards Documentation,training,and support readily available Vendor expertise and support Periodic updates with competitive parity on features and performance Faster development,quality control,documentation,and support enable quicker adoption Most common and critical features come out of th
219、ebox Up-to-date software with security patches,bug fixes,and new features Criticality of timelines Opportunity cost Longevity of support required Simplicity or complexity of interface and solution Ongoing support and training Cost of support and initial cost of training Development control Upgradabi
220、lity and optimization Target documentation based on user profile Control over support and its prioritization Incremental release cycles give more control Integration with existing platforms,data and processes More control Can ensure software support in the long run48Capgemini Research Institute 2023
221、The Art Of Software:The New Route To Value Creation Across IndustriesFoster a collaborative software excellence culture A software-centric and collaborative culture is key to the success of software-driven transformation to accelerate time to market and enable scalability,upgradability,and safety.Ou
222、r research shows that nearly half of organizations rank knowledge sharing and collaboration among the top culture-related challenges for their organizations(see Figure 20).Source:Capgemini Research Institute,Software-driven transformation survey,JuneJuly 2023,N=1,500 organizations.FIGURE.20Lack of c
223、ollaborative culture is a challenge for nearly half of organizations see a lack of collaborative culture across product and service development teams in their organizationbelieve a lack of agile and fluid ways of working impedes software development and imple-mentation for themsay they are not able
224、to adequately create,share,and reuse knowledge across software and hardware functions51%48%48%OF ORGANIZATIONS RANKING THE BELOW CHALLENGES AMONG THEIR TOP 3 CULTURE-RELATED CHALLENGES49Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesOrganization
225、s should:Encourage cross-function collaboration:Open communication and collaboration between engineering and business functions such as marketing,sales,and customer experience helps to integrate customer-use data and feedback into the design process.Our research suggests that only 36 percent of orga
226、nizations involve customer experience(CX)professionals early on in the software product/service design process.Embrace the cultural aspect of software toolchains:Agile and DevOps is more than a technology movement;it is a holistic culture and practice that demands a governance model,skills,and new w
227、ays of working.It also inherently requires the creation of cross-functional teams of software architects,developers,testers,business users,and,in some cases,clients/customers.As per a recent survey,69%of organizations ranked increased collaboration as a top benefit of scaling agile.38 Promote autono
228、my,trust,and psychologically safe experimentation:For success in software-driven transformation,organizations need to embrace failure and foster a blame-free environment for rapid testing,failing,experimentation,and innovation through activities such as“failure nights”(where employees talk openly ab
229、out their experiences of failure in their professional lives)and“innovation slams.”Organizations also need to reshape the operating model,including organizational structures to transform the culture sustainably.The following sections discuss operating models and software toolchains in detail.36%of o
230、rganizations involve customer experience(CX)professionals early on in the software product/service design process.50Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesSTRENGTHEN3.4your talent and skills approachCreate a comprehensive talent and skil
231、ls approachThere is a growing need for software engineering expertise within organizations.In our research,organizations expect 39 percent of the workforce to work on software solutions in the next three years(see Figure 21).Source:Capgemini Research Institute,Software-driven transformation survey,J
232、uneJuly 2023,N=1,500 organizations.FIGURE.21The share of software skills in the workforce will rise to more than one-third in the next three yearsEXPECTED PROPORTION OF EMPLOYEES WORKING ON SOFTWARE SOLUTIONS IN THE NEXT THREE YEARS AutomotiveBanking and insuranceEnergy and utilitiesLife sciencesTel
233、ecomRetailConsumer productsAerospace and defenseHigh-tech manufacturingIndustrial and capital goodsAll sectors39%46%45%44%42%36%36%31%30%39%42%39%of an average organizations workforce is expected to work on software solutions over the next three years51Capgemini Research Institute 2023The Art Of Sof
234、tware:The New Route To Value Creation Across IndustriesConsequently,demand is growing for the key technology capabilities necessary to propel software-driven transformation.In 2022 American Express announced that it intended to add 5,000 tech roles across domains such as product and engineering,soft
235、ware engineering,data science,product management,and information security.39 More than half(55 percent)of organizations in our research cite traditional development teams lacking the skills to co-develop software as a challenge for their organization.As companies such as Ford move towards complete i
236、n-sourcing of the development of second-generation electric vehicle(EV)architecture,and writing all the software in-house40 there be huge growth in demand for key software skills.However,at present,significant talent gaps exist in several critical technology areas:Cybersecurity and compliance,includ
237、ing in homologation(granting of approval by an authority),certification,and other areas(61 percent of organizations cite it as a gap)AI,ML,and deep learning(DL)talent(60 percent of organizations)Data-and cloud-related skills(57 percent of organizations)Moreover,over 40 percent cite software engineer
238、ing,application development and programming,testing,verification,and validation as a gap in itselfAlong with closing these gaps,there is also a need for a good mix of both industry and technology expertise.However,for nearly half(49 percent)of organizations,recruiting talent with domain as well as t
239、echnical skills is a big challenge.Bhavesh Gupta,Global Director of Engineering at Honeywell,comments:“Integrating technical,domain-specific,and business knowledge is rare but essential.Engineers will understand how to do software development,but they may not understand the other two areas.People wh
240、o understand the nuance of domains may not necessarily understand how to develop software or how to make a viable business out of it.And people who are business gurus dont always understand the domain or software-development aspects.You need at least one person that understands all three aspects,to
241、tie them all together.”To reduce the pressure of hiring new talent,organizations must also strive to upskill their existing engineers with software knowledge and proficiency.However,upskilling programs are falling short of anticipated outcomes for a majority of organizations(see Figure 22).52Capgemi
242、ni Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesSource:Capgemini Research Institute,Software-driven transformation survey,JuneJuly 2023,N=1,500 organizations.FIGURE.22Upskilling ranks as the top talent-related challenge that organizations face.My organi
243、zation is finding it challenging to recruit talent with domain/industry as well as tech skillsWe lack the software-skilled leadership to enable software developmentOur reskilling/upskilling programs are not able to meet our expectationsTOP TALENT-RELATED CHALLENGES FACED BY ORGANIZATIONS53%49%48%The
244、 competition for top technology talent is fierce.More than half(53 percent)of traditional product-and services-centric organizations agree that they compete on recruitment not only with their industry peers,but also with big tech and digital-native organizations.Frequently,this top technology talent
245、 encounter cultural fit challenges while working in traditional organizations.To solve business problems,they require autonomy,ample opportunities to grow,insights into business metrics,and support in enhancing their skills.To attract,engage,retain,and upskill talent,organizations should:Establish a
246、 comprehensive strategy to acquire critical skills:Today,top software and technology talent isnt confined to job sites.Organizations should explore open-source communities,meet-ups,and hackathons to hire for these specialized skills.As per our survey,only 46 percent of organizations say they hire fr
247、om open-source communities connected to projects they use,and 49 percent connect with developer communities through meet-ups and sponsored hackathons.Strategic partners can also add significant value to software teams by providing access to skilled talent at scale and contributing chip-to-cloud expe
248、rtise.53Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across Industries Focus on continuous learning and upskilling:In 2021 Stellantis announced the launch of a“Software Academy”for the upskilling and reskilling of new and existing employees.The company also pl
249、ans to launch a global learning curriculum,called the Agile-Auto Software and Data Academy,which will cover software,data,and cloud technology.The aim is to train more than 5,000 developers and engineers by 2024.41 Our research shows that 48 percent of organizations have already developed centers of
250、 excellence to concentrate knowledge in the software space.Along with technical skills,these upskilling programs should encourage new ways of thinking about software development.Track and improve“developer experience”:A recent survey by Forrester shows that,by improving developer experience(DevEx),7
251、7 percent of organizations can shorten time to market,while 85 percent can positively impact revenue growth.Moreover,82 percent reported increased customer satisfaction,and 81 percent saw a positive change in developer recruitment and retention.42 However,only 47 percent of organizations in our rese
252、arch track their DevEx scores.Enable the“citizen developer”with low-code/no-code platforms:Low-code development enables business users with virtually no programming experience to create applications using a graphical interface.This can be undertaken for simple workflows,optimization of established p
253、rocesses,and low-security apps but not for the solutions that create market differentiation.In our survey,47 percent of organizations say they directly encourage and support non-traditional developers in creating software using a low-code development strategy.The Dutch national railway company,NS,la
254、unched a new customer application,Treinwijzer,that uses a low-code platform,allowing passengers to check how busy trains 53%of traditional product-and services-centric organizations agree that they compete with big tech and digital-native organizations on recruitment.are in real time,enabling them t
255、o switch to a less crowded service.43 It is important that low-code platform and security teams work together to define governance policy and implement guardrails.Generative AI tools can also support traditional organizations by shortening the timeline for building software development skills.Paulo
256、Rosado,Founder and CEO of low-code development platform OutSystems,adds:“I expect many more people to start using these tools to speed up projects,from LLMs that generate code snippets,to highly complex low-code solutions that abstract the entire software-development lifecycle.However,this does not
257、mean AI will obliterate the software development job market.Instead,it will help them accomplish much more in less time.”4454Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesBHAVESH GUPTAGlobal Director of Engineering at Honeywell“Integrating tech
258、nical,domain-specific,and business knowledge is rare but essential.Engineers will understand how to do software development,but they may not understand the other two areas.People who understand the nuance of domains may not necessarily understand how to develop software or how to make a viable busin
259、ess out of it.And people who are business gurus dont always understand the domain or software-development aspects.You need at least one person that understands all three aspects,to tie them all together.”55Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across In
260、dustriesORGANIZE3.5Shape a software-product and services-centric organizational structure Large automakers have built new software organizations(MBition GmbH,in the case of Mercedes-Benz cars)with the sole purpose of developing software for their vehicles.45 Within Robert Bosch GmbH,a new business u
261、nit,Bosch Mobility,which focuses on software-based engineering,will be managed as a business sector with responsibility for its own business and its own leadership team.Figure 23,below,lays out the current state of organizational structures as per our research.Organizations need to evaluate each and
262、 choose which will work best for them:A majority(60 percent)of organizations are planning to create an independent entity to focus on software-driven transformation More than half(53 percent)of organizations currently focus on a decentralized approach to software development Note:*i.e.,.separate dev
263、elopment teams for HMI,autonomous,powertrain,etc.,in a car);*e.g.,microcontroller/assembly programming,low-level/closer to metal development,virtual environments,cloud computing,etc.Source:Capgemini Research Institute,Software-driven transformation survey,June-July 2023,N=1,500 organizations.FIGURE.
264、23A majority of organizations are aiming to create an independent entity to focus on software-driven transformationCURRENT AND PLANNED ORGANIZATIONAL STRUCTURE FOR TRANSFORMING INTO A SOFTWARE-DRIVEN ORGANIZATIONCURRENT STATE OF SOFTWARE DEVELOPMENT TEAMSWe plan to create an independent entity with
265、its own business accounts to focus on software-driven transformation.We have created an independent entity with its own business accounts to focus on software-driven transformation.7%53%Software development is undertaken by a centralized teamSoftware development takes place within the current R&D un
266、itSoftware development happens in individual product/service linesSoftware development is split into functional teams*A central body sets policy and standards,while individual departments/BUs have some internal flexibilitySoftware development is grouped by abstracting various levels from base hardwa
267、re*,CENTRALIZED32%DECENTRALIZED53%FEDERATED15%17%15%13%23%17%15%to be software-product and services-centric56Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesIt should be noted that every model has benefits and challenges.For instance,of organizat
268、ions with a centralized software development model,42 percent rank“backlog prioritization”as a key challenge,owing to the necessity of shared resources.A digital and innovation lead at a global biotechnology company comments:“In a centralized model,one of the biggest challenges you face is finding e
269、nough people to manage the ongoing projects.Additionally,a centralized model could be a barrier to innovation as the workload can overwhelm people.”Similarly,of the organizations with a decentralized software team,half(53 percent)rank duplications and redundancies among their top three organizationa
270、l challenges.A software-product and services-centric organization is a combination of strong autonomous teams;split by production or service perimeter;driven by client satisfaction;and applying agile and lean management principles,such as transparency,empowerment,collaboration,iterative delivery,and
271、 experimentation.46 Software-product and services-centric organizations address all business aspects,including customer relations,operations,product management,and change management and innovation,as well as all IT aspects of their products and services,including legacy systems and digital delivery.
272、A recent survey highlights that 85 percent of organizations have adopted,or plan to adopt,a product-centric application-delivery model.47 42%of organizations rank“backlog prioritization”as a key challenge,owing to the necessity of shared resources.57Capgemini Research Institute 2023The Art Of Softwa
273、re:The New Route To Value Creation Across IndustriesJP Morgan Chase is overhauling its IT organization of around 12,000 people with teams encompassing product owners along with technology,data,and design leaders.Instead of separate teams for each account type,there is a unified,multifunctional team
274、dedicated to account opening.This team oversees the entire account-opening process,from design to upgrades,leading to a consistent experience across channels.Gill Haus,CIO for Consumer and Community Banking at JP Morgan Chase,adds:“No matter how agile you are,you are solving different problems for c
275、ustomers in different ways unless you are organized by product and are customer-backed.”4885%of organizations have adopted,or plan to adopt,a product-centric application-delivery model.58Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesSTREAMLINE3
276、.6Amplify velocity and quality through agile methodologies and software factoriesTo create a holistic agile organization,agile principles and practices,as well as the underlying mindsets,must be scaled beyond individual teams.Frameworks such as scaled agile framework(SAFe),Large-Scale Scrum(LeSS),Ne
277、xus,and Disciplined Agile(DA)can help to kick-start an agile transformation,but it is important to customize the approach based on organizational culture.A data platform head at a French insurer says:“We use agile frameworks only as a toolbox.If we want agile to work,we need to have a degree of adap
278、tation and be tailored and relevant to our context.”49 In our research,only 34 percent of organizations agree that they select an agile-at-scale framework as a base for their own custom framework.Building a modern software factory gives organizations the tools to innovate rapidly,streamlining all so
279、ftware-engineering processes to compete in the digital age.Combining agile with DevOps,supporting continuous integration and use of standard APIs multiplies efficiency and helps achieve value faster.Organizations also need to implement intelligent testing to build durability and detect weaknesses,sa
280、ving on costs,staying compliant,and allowing for continuous innovation.This requires teams to develop comprehensive testing capabilities using AI and ML to predict and rectify issues before the software is deployed.Cloud-based,virtualized software development toolchains improve scalability,reduce de
281、velopment time,and improve collaboration.To apply DevOps in product-based industries,organizations should focus on strengthening virtual testing.To do this,they should:Align engineering teams with value streams,with a focus on product delivery:The example below describes the situation for a credit c
282、ard company where business and IT have been vertically integrated through specific business products and customer journeys.Supporting these 34%of organizations agree that they select an agile-at-scale framework as a base for their own custom framework.through agile methodologies,software factories a
283、nd Generative AI teams are component teams responsible for common technology architectural components such as cross-line of business(LoB)platforms.Over time,architectural changes can reduce the need for heavy component teams by abstracting business functionality into a more dynamic microservices lay
284、er.59Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesSource:Capgemini,“The state of art in agile software development,”July 2021.FIGURE.24An example of a product-centric,vertically integrated organizationMoreover,our previous research highlights
285、that agile frontrunners start by defining the customer journey and establishing guardrails for spending policies,guidelines,and practices for a specific portfolio of value streams.50 A VC-type approach to funding fosters innovation and allows organizations to test more ideas,progressing the best.Ant
286、onietta Mastroianni,Chief Digital and IT Officer at Proximus,adds:“Financial models need to evolve and become agile.The old approach,where organizations realize benefit after two years,is a no-go.So,the new focus should be rationalized into investing and creating value in small steps,with clear goal
287、s and plans.”Use DevOps,DevSecOps,and continuous integration/continuous deployment(CI/CD)approaches to accelerate value:While not a new concept,DevOps principles have gained tremendous support based on their ability to consistently reduce the time from development to operations.Automating end-to-end
288、 workflows through CI/CD pipelines enables shorter intervals between iterations and reduces the number of errors.Our research shows that 36 percent of organizations today are already using cloud-resident continuous integration tools and an additional 36 percent plan to use them in the next 12 months
289、.One in three(33 percent)organizations currently uses a cloud-resident continuous development environment,and 39 percent plan to use it in the next CARDSACQUISTIONPARTNERSHIPRISK MGMTCREDIT CHECKPROGRAM 2.CORE PROCESSINGE.G.,INFRASTRUCTURE,NICHE TESTINGFULFILLMENTLOBs/PortfolioValue streamsSub portf
290、olio/Investment themesProgramFeature/Scrum teamsComponent teamsShared servicesAgile release train60Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across Industries12 months.With the rise of the use of Generative AI in software development,these toolchains become
291、 even more important,as they make it easier to both measure and manage process change.Leading organizations are also extending DevOps to other key capabilities,such as security.DevSecOps incorporating practices and automation tools to validate the necessary security requirements for the full softwar
292、e development cycle can help organizations to reduce effort and costs,accelerate release,and improve security and compliance.Leading organizations shared the following best practices:In building software architecture,organizations must employ a security-aware mindset throughout.To“shift the security
293、 to the very left”of the development cycle requires revamping the security operating model.Organizations should create an automated build and test pipeline based on risk,including dynamic and static application security testing,functional testing,and unit testing.Alan Hohn,Chief Engineer at Lockheed
294、 Martins Software Factory,comments:“Our customers are seeking frequent delivery of high-quality,secure software and we are rising to the challenge.We are using infrastructure automation to build systems in minutes,not days.We are using containerization to update systems continuously,not waiting for
295、full system integration and delivery events.”51 Moving from the traditional way of working to the DevSecOps mindset requires a cultural shift.Organizations should focus on providing specific training for individual roles,embedding security champions into delivery teams and making security a shared r
296、esponsibility.Organizations should use metrics to track improvements and lessons learned from security incidents and to incorporate them into the design process.36%of organizations today are already using cloud-resident continuous integration tools61Capgemini Research Institute 2023The Art Of Softwa
297、re:The New Route To Value Creation Across IndustriesANTONIETTA MASTROIANNIChief Digital and IT Officer at Proximus“Financial models need to evolve and become agile.The old approach,where organizations realize benefit after two years,is a no-go.So,the new focus should be rationalized into investing a
298、nd creating value in small steps,with clear goals and plans.”62Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesDEVELOP A STRATEGY AND CULTURE TO INTEGRATE THE HARDWARE-SOFTWARE DEVELOPMENT CYCLES FORINTELLIGENT AND CONNECTED PRODUCTSThe integrati
299、on of hardware development of traditional industries with software capabilities is an essential factor.Hence,a bimodal development approach works best to find the optimal balance between desirability,viability,feasibility,and sustainability perspectives.In the initial stages,all the ecosystem compon
300、ents should be developed in an agile manner,but some physical scaling steps and some embedded software may require a more sequential approach in the later stages.Proper integration of these two types of development cycles and its associated culture can make a significant difference in performance op
301、timization,deployment cost and,ultimately,user experience.Bimodal strategies also demand a culture of collaboration and communication.Regular meetings and discussion are required to align expectations and synchronize hardware and software development.63Capgemini Research Institute 2023The Art Of Sof
302、tware:The New Route To Value Creation Across IndustriesFor orchestrated hardware-software development,there are a few key requirements:52Gate#1 Ready for deep diveGate#2 Ready for prototypingGate#3 MVP/MLP defined Ready for validationVISIONANALYSIS&PROOFS-OF-CONCEPTCONCEPT ANALYSIS,DEEP-DIVES,PROOFS
303、-OF-CONCEPT,PLANNINGPROTOTYPE(S),MARKET VALIDATION,SPECS OF MINIMAL VIABLE/LOVABLE PRODUCT Assess the opportunity and identify impactful,novel,and cohesive concepts to achieve significant ROI Analyze concepts to assess customer perception,create an initial investment case,and de-risk feasibility wit
304、h proof-of-concept(s)Demonstrate a prototype of the connected ecosystem that represents a good degree of accuracy and functionality of the final vision Validate customer perception and specify the MVP/MLP specifications.Shift validation left.There may be multiple iterations between stages 2 and 3Wat
305、erfall physical product validation and manufacturing scaling steps take place in stages 4 and 5Stage 1Stage 2Stage 3Stage 4Stage 5Stage 6Gate#4 Ready for manufacturing&scalingMVP/MLP LaunchNEXT GENERATION INITIATIONECOSYSTEM&DIGITAL DEVELOPMENT,DEVICE VALIDATION&CERTIFICATION MARKET LAUNCH PREPARATI
306、ON,ECOSYSTEM COMPLETION,PRODUCTION LINE VALIDATIONCOMMERCIALIZATION,OPERATIONS&SUPPORT,NEXT GENERATION Initiate other ecosystem components development:digital experience,partnerships,business process change,etc.Refine and validate the selected production-worthy design,platform(s),supply chain,and as
307、sembly(EVT&DVT)Obtain required certifications Establish market launch plan.Complete the digital and ecosystem components development Verify mass production yields at mass production speeds Operate ecosystem,optimize through analytics and voice of the customer Plan for next generation64Capgemini Rese
308、arch Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesAccelerate software development with Generative AISoftware teams are under pressure to deliver software faster and to higher standards.However,they struggle to implement testing for quality,functional and technic
309、al defects,cybersecurity vulnerabilities,and technical debt.Generative AI has the potential to transform software development and innovation.Generative AI can streamline code creation,optimization,completion,testing,and debugging.Figure 24(below)highlights the use cases of Generative AI in the softw
310、are engineering lifecycle.Our previous research highlights that 32 percent of organizations are already piloting generative design for generating recommendations of new design concepts/configurations;32 percent are doing pilots/PoCs on synthetic data generation;and 24 percent are experimenting with
311、Generative AI for product testing.53 Deutsche Bank is investigating the potential of Generative AI for three key areas:developing software code that aids developers in boosting productivity;implementing AI chatbots to assist employees and clients with queries using unstructured data and voice;and ac
312、celerating risk calculations.54 As organizations delve deeper into Generative AI,and start experimenting and using it in their software journeys,they also need to develop a clear vision,strategy,and roadmap for prioritizing use cases.32%of organizations are already piloting generative design for gen
313、erating recommendations of new design concepts/configurations65Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesSource:Capgemini Research Institute analysis.FIGURE.25The use cases of Generative AI span the software lifecycle Requirement writing an
314、d analysis User story generation Reverse engineering and documentation Architecture writing assistance Sequence flow diagram generation Data model authoring UX design assistance Software refactoring Code generation(to generate code snippets,templates,functions,or classes)Code review and quality assu
315、rance Debugging and static analysis Explaining the functionality of code Code translation,code migration Unit test generation Automated test case generation Testing code generation Using synthetic data to test applications Training AI/ML algorithms with synthetic data AI for test orchestration Ident
316、ification of software security vulnerabilities On-demand code generation CI/CD pipeline generation Automated script-writing assistance Infrastructure as code script writing support AIOps/performance monitoring/automatic failure detection and remedy suggestion User feedback analysis Incident analysis
317、 and resolution Log analysis Predictive maintenance and optimizationAUGMENTING SOFTWARE DEVELOPMENTOPTIMIZING OPERATIONSANALYSISDESIGNDEVELOPMENTTESTINGDEPLOYMENTMAINTENANCE66Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesGenerative AI can also
318、help employees who lack a coding background become productive developers within a managed lifecycle essentially citizen developers.Amsterdam-based ING Bank began to explore citizen data-science capabilities amid a shortage of professional data-science talent in many countries in which it operates.IN
319、G uses these citizen developers to identify the use cases possible with automated ML,freeing up the data-science team.55 However,there is also a need to enhance testing capabilities,such as regression testing,as well as to ensure proper guardrails to prevent the explosion of“gray IT”in organizations
320、.A product group manager at a global consumer product company says:“Generative AI is arguably the most significant revolution weve witnessed in the last 5-10 years,with a high impact across all technical fields.In the past couple of years,Generative AI has demonstrated remarkable results.For example
321、,GitHub Co-pilot offers extensive assistance in generating code.However,one needs to exercise caution regarding issues related to privacy and copyright infringement.”To harness Generative AI in software development,organizations should:Assess their current software lifecycle Conduct value,accessibil
322、ity,and risk analysis to identify and prioritize the most prominent use cases Identify where they expect Generative AI to augment,automate,or optimize their software development Design and secure the required technology,people,and process foundations to deploy Generative AI at scale,safely,and at a
323、controlled cost Upskill and engage teams on Generative AI Build best-in-class Generative AI-powered joint product teams or a“software house”Measure the impact of Generative AI across the software lifecycle on parameters such as productivity,quality,security,and developer experience Identify specific
324、 challenges and adapt the pace and scope of deployment accordinglyOur previous research revealed that nearly three-quarters of organizations identified a lack of data privacy and protection as a major concern in realizing the full potential of Generative AI.56 For software engineering,as well,there
325、are concerns regarding security and ownership of the IP and code.Organizations must recognize these challenges,establish guidelines,and adapt accordingly.67Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesIn todays rapidly evolving business landsc
326、ape,software is a key strategic asset,crucial to unlocking new value streams,creating personalized customer experiences,and establishing competitive differentiation.Yet,as organizations embark on their software-driven transformation journeys,they encounter an array of challenges impeding scale,in ar
327、eas including defining a strategy,designing for the user,collaborating,acquiring and retaining talent,building an enabling structure,and streamlining technologies.To turn the tide and achieve software excellence,organizations must navigate the“why”and“how”of software transformation and Conclusioncon
328、sider software as a key strategic business asset.This will require organizations to define a strategic vision,design a human-centric,sustainable,and flexible software and architecture roadmap,and engage with key ecosystem partners to realize the value potential that software-based business models of
329、fer.Transitioning and creating software excellence also demands a considerable shift in culture,talent,structures,and ways of working including streamlining via agile methodologies and technologies such as Generative AI.Software is no longer an optional area for the curious to explore;it is the new
330、frontier through which businesses must decisively chart their courses to secure sustainable success.68Capgemini Research Institute 2023The Art Of Software:The New Route To Value Creation Across IndustriesResearch methodologyTo understand the various routes of value creation that software can unravel
331、 in organizations across industries,we conducted extensive research,with qualitative and quantitative components.In-depth interviews We conducted more than 20 in-depth interviews with industry executives from various organizations,which includes traditional manufacturers and digital natives.Intervie
332、wees comprised those involved in the development of software-driven transformation initiatives working across all functional areas,such as general management/strategy,innovation,software engineering,research and development,IT and data management,marketing and sales,product/service development,and c
333、ustomer management.Executive survey We surveyed 1,500 respondents from unique organizations with over$1 billion in annual revenue,across 10+countries.Out of these,1,350 organizations have/are building a strategy to become a software-driven organization,focusing on software-defined products/services.The respondents were at director level or above,responsible for software initiatives in their organi
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