Endless Modernization - How Infinite Flow Keeps Software Fresh
Endless Modernization - How Infinite Flow Keeps Software Fresh
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Jim Johnson
Dreamer
The Standish Group
Hans Mulder
European Research Director
The Standish Group
EXECUTIVE SUMMARY
This paper is the result of unique and extensive research for identifying the best methods for modernizing
mission-critical application software. We have concluded that projects using the principles of what we call
“Infinite Flow” (a continuous process, unlike projects that are designed as one-time events with a beginning
and an end) achieve superior results. (For more information, see addendum, “About Infinite Flow.”) As a result
of these compelling findings, we are providing a method for transition from a project-based environment to
non-project activities by adopting the principles of Infinite Flow to modernize legacy applications.
Since Infinite Flow is not a project, we cannot measure it. Therefore, we have reduced the observations from
all modernization projects to those that generally meet the attributes of microprojects and some attributes of
Infinite Flow (Flow), such as Scrum and DevOps. We call this “flow like modernization” in order to compare
it more clearly with the other types of application modernization that we have observed. In essence, we have
found that great progress can be made by ending project-based modernization in favor of the flow process.
a. Flow like modernization projects that are a series of microservices or microprojects, rather than one large
project, achieve much better outcomes.
b. Flow like microprojects reap greater customer satisfaction because of the built-in user/customer feedback loop.
d. Flow like microprojects offer a reduced risk of failure and monetary loss.
Our organization profiles, which inform the Standish database, study organizations from the viewpoint of
24 separate data points. Our project profiles depend on more than 80 data points through which projects are
analyzed and assessed, and on a dozen worksheets developed for each project. The database is used to create
reports like this one. It’s also used for projects like “CHAOS 2020: Beyond Infinity,” as well as general queries,
single-project assessments, future portfolio predictions, and performance benchmarks. Our database is robust,
so we can see many different views of data and measure attributes such as OnTime, OnBudget, OnTarget,
Copyright © 2020 by The Standish Group International, Inc. 1
OnGoal, Value, and Customer Satisfaction. We can also use any
of these measurements for decision speed, team capability, size of This paper builds on our research,
projects, types of projects, methods of delivery, and a number of other with an introduction to Infinite
common applications. Flow and the discovery of decision
latency as the root cause of
In Chart 1 we see success by the traditional metric of OnTime, poor project performance. That
OnBudget, and OnTarget over the last 25 years. After 25 years of research includes our 2010
research, the only sure way to prevent software projects from being either paper, “Modernization: Clearing a
challenged or failed is to stop doing projects and adopt Infinite Flow. Pathway to Success,” [1] which
identified three common ways
organizations go about replacing
CHART 1: LONGITUDINAL CHAOS RESEARCH a current software application
and compared the results of each
method. Type 1 was essentially
a new application development.
It involved developing new
user requirements, technical
specifications, programming,
tests, and user education, as
well as a host of other project
management and executive
activities. Type 2 used a typical
1994 1995–1999 2000–2004 2005–2009 2010–2014 2015–2020
commercial off-the-shelf (COTS)
package or implementation that
required moderate modifications.
Successful Challenged Failed Type 3 used a method we called
“modernization”: refurbishing an
existing application rather than
CHART 2: MODERN RESOLUTION BY PROJECT TYPE replacing it fully.
Teams that have better decision latency skills are also more successful.
This chart uses the modern definition of success (OnBudget, OnTime,
satisfied customer) and is based on the 50,000 projects in the
CHAOS 2020 database.
We believe improved decision latency is the main reason Flow like modernization projects enjoy a greater
success rate and cost less than other types of projects. The Standish Group measures the skill level by
information in the project profile.
Developed from
17% 38% 27% 18%
scratch
Developed using
21% 39% 23% 17%
components
Purchased application
22% 36% 26% 16%
(COTS)
Flow Like
27% 43% 18% 12%
Modernization
Flow Like modernization project teams generally display better decision latency skills than teams on other types of projects.
This chart is based on the 50,000 projects in the CHAOS 2020 database.
4
CUSTOMER SATISFACTION
The real test of a successful software project is customer satisfaction—it’s one of the major reasons we create
and modernize software. There’s a direct relationship between customer satisfaction and that customer’s
ability to absorb change. Large, “big bang” projects produce only a 6% rate of high satisfaction, and they
produce a 60% rate of customer disappointment. Small, iterative modernization projects reap four times that
rate of high satisfaction and produce only an 8% rate of customer disappointment. Retaining similarity in a
transition to new features and functions avoids the necessity for retraining. Being able to make changes to the
user experience that are intuitive increases user productivity. This is further spelled out in our
Absorption Theory [FN3].
Developed from
12% 18% 25% 22% 23%
scratch
Developed using
14% 21% 25% 19% 21%
components
Purchased application
13% 21% 26% 21% 19%
(COTS)
Flow Like
21% 34% 30% 9% 6%
Modernization
Flow Like modernization projects attain a higher level of customer satisfaction than other project types. This chart is based
on the 50,000 projects in the CHAOS 2020 database.
Our research shows that as much as 80% of new software features and functions are dead on arrival and rarely
used. However, Flow modernization eliminates many of those features and functions before they are even
created. Flow modernization also eliminates many unused features and functions through refactoring—which
improves software maintenance costs, thus creating additional value. The proof is in the numbers: Flow like
modernization returns twice the value on average than for other types of software development.
PROJECT TYPE VERY HIGH HIGH VALUE AVERAGE LOW VERY LOW
VALUE VALUE VALUE VALUE
Flow Like modernization projects offer a much higher return on investment/value than for other project types. This chart is
based on the 50,000 projects in the CHAOS 2020 database.
Developed from
7% 49% 39% 5%
scratch
Developed using
8% 50% 37% 5%
components
Purchased application
8% 49% 39% 4%
(COTS)
Flow Like
12% 56% 29% 3%
Modernization
Flow Like modernization projects tend to have project environments that are slightly more skilled places than do other
project types. This chart is based on the 50,000 projects in the CHAOS 2020 database.
Flow Like modernization projects tend to have slightly more skilled teams than do other project types. This chart is based
on the 50,000 projects in the CHAOS 2020 database.
8
PROJECT SPONSOR
Key to success for any project is a skilled sponsor, and our book The Good Sponsor [7] identifies 10 principles
and 50 skills that characterize good sponsors. We believe that unlike teams, which improve with time,
sponsors tend to lose interest over time, and hence their skills degrade. Flow modernization projects come
in at about average in terms of project sponsor skills. However, maintaining rapid and constant Flow
modernization deliveries helps maintain sponsor interest, and changing sponsors as a project’s focus changes
also helps. Of course, the most effective thing you can do to improve sponsor skills is to encourage them to
take a course, like our Good Sponsor Crash Course.
Developed from
16% 39% 28% 17%
scratch
Developed using
21% 38% 25% 16%
components
Purchased application
22% 35% 27% 16%
(COTS)
Flow Like
25% 43% 20% 12%
Modernization
Skill levels for sponsors of Flow Like modernization projects come in slightly higher than for other project types. This chart
is based on the 50,000 projects in the CHAOS 2020 database.
Currently, the Success Ladder has six rungs. Rung 1 is the actuary or project type (i.e., developed from scratch
or through modernization) and the project method (i.e., agile or waterfall). Rung 2 considers project size; the
results change based on our labor cost range. Rung 3 measures complexity. Rung 4 measures the environment
in which the project takes place. Rung 5 considers the emotional maturity of the team, and Rung 6 measures
the skills of the sponsor. Creating a Success Ladder benchmark is a simple task and only takes a few minutes.
Charts 10 and 11 present results for the same project, using two methods: Flow modernization, and
the development of an entirely new application. Chart 10 attacks the project using small, iterative, agile
modernization methods and features high levels of skills. The project is broken into 10 individual projects at
about $1 million each.
Chart 11 presents the complete opposite—a large, very complex, waterfall software development project
featuring moderate skill levels and running at $10 million in total.
The results seen in Chart 10 show an extremely positive outcome (OnTime, OnBudget, with a satisfied
customer). In contrast, predictions for the project shown in Chart 11 come in at a mere 1% chance of success.
EX AMPLE
Flow Like modernization is not just a theory or a wild idea. It works for developing successful software projects.
Take, for example, a large European financial organization that used the method to replace a 40-year-old system.
The organization had found that the increasing complexity of the interdependencies between infrastructure
software and application software components was preventing agility and leading to longer lead times. These
are major risks because of the number of people involved, the dependencies between projects, and issues of
lifecycle management and user training and acceptance. The institution had already tried a couple of times to do
a full replacement—once with a new development and once with a package. In both cases, the projects failed,
at a cost of many millions of dollars. Using small projects instead, with some Flow-like techniques, kept many
dependencies in place while gradually eliminating them. The effort has taken several years, but at reduced cost
with no down time. This organization is also saving about 80% on its annual software maintenance by reducing
most of the technical debt.
Net Value Infinite Flow also greatly decreases costs. A typical waterfall-type
80% modernization project might cost $12 million in direct labor. For the same
features and functions delivered, an agile approach would cut that cost in
half. The same features and functions using Infinite Flow practices would
cut the costs in half again—in other words, a cost of about $3 million.
The great thing about Infinite Flow is that it involves no estimates or budget
items, no project plans, no steering committees, and no deadlines. There are
no conflicts on what should be included and what should not be included.
There are no project failures or “challenged” projects: There are no projects.
Overhead Budgets are based on teams, and tasks are based on obvious needs.
20%
FN2: Fragility is a hallmark of systems that fail to thrive as a result of stressors, shocks, volatility, noise,
mistakes, faults, attacks, or failures. In software applications, the goal has always been to make systems
resilient as well as robust. However, this concept has actually made software harder to modernize or keep
current because of the ever-growing base of code; this increases technical debt and fragility. Killing off unused
features and functions and adding new functions allows applications to “wander” more naturally and makes
them less fragile. It’s a concept that is fundamentally different from what we think of as “resiliency” [8].
FN3: Absorption Theory comprises three broad concepts—continuous change, decreasing complexity, and
conservation of familiarity—that will increase the adoption of features and functions in software projects [9].
Absorption Theory describes the ability of an organization to successfully grasp business and technical changes
without disruption.
[2] The Standish Group, “Modernization in Place” (Standish Group, 2014). Can be accessed by Standish
general members in the research report section of the Standish website.
[3] Jim Johnson and Hans Mulder, “Go with the Flow: Envisioning a Successful Pipeline of Software Projects”
(Standish Group, 2019). Can be accessed by Standish general members in the research report section of
the Standish website.
[4] Jim Johnson, “Decision Latency Theory: CHAOS Report 2018” (Standish Group, 2018). Can be accessed
by Standish premium members in the premium report section of the Standish website.
[5] The Standish Group, “CHAOS Report 2016: The Winning Hand” (Standish Group, 2016). Can be
accessed by Standish premium members in the premium report section of the Standish website.
[6] Jim Johnson and Evan Sorensen, The Good Mate (Standish Group, 2018). Available in the Standish store.
[7] Jim Johnson, The Good Sponsor (Standish Group, 2016). Available in the Standish store.
[8] Nassim Nicholas Taleb, Antifragile: Things That Gain from Disorder (Random House, 2014).
[9] The Standish Group, “CHAOS Manifesto 2015, The Law of Diminishing Returns”
(Standish Group, 2015). Can be accessed by Standish general members in the CHAOS report
section of the Standish website.
[10] Jim Johnson, “CHAOS2020 Beyond Infinity” (Standish Group, 2020). Can be accessed by Standish
premium members in the premium report section of the Standish website.
15
ABOUT THE STANDISH GROUP
The Standish Group is a primary research advisory organization that focuses on software
development performance. Using our extensive primary research, you can improve your investments
in software. We are a group of highly dedicated professionals with years of practical experience helping
organizations improve.
Jim Johnson is the founder and chairman of The Standish Group. He has a
combination of technical, marketing, and research achievements focused on mission-
critical applications and technology. He is best known for his research on project
performance and early recognizing technology trends. Jim is a pioneer of modern
research techniques and continues to advance in the research industry through case-
based analytical technology.
All rights reserved. No part of this book may be reproduced in any form or by any electronic, mechanical, or manual
means, including information storage and retrieval systems, without explicit permission in writing from the publisher. In no
circumstances can this work be retransmitted in any form, repackaged in any way, or resold through any media.
PLEASE RESPECT INTELLECTUAL RIGHTS! Published by: The Standish Group International, Inc.
66 Tern Lane, Centerville, MA 02632 508-760-3600 www.standishgroup.com