You just got a new wild horse, and you need help to train her and you don’t know how.
Who would you like to get help from?
A person who trained wild horses before
A person who trained ordinary horses
A person who trained dogs
A person who looks good and is nice
I can myself
When your business is doing something completely different, who do you ask for help?
It’s easier to train a wild horse than run a transformation project.
We all know that the bigger the project are, the greater the risk of failure.
Small teams, small deliveries is the essence of agile project, and they do succeed if they stay small.
But if you want to win big, you have to bet big is also a common wisdom, but how well does this work in software development?
Are IT-projects profitable? The statistics shows that only 18% of the project with less than $2M budget succeeds and only 2% of larger projects, but not if they are profitable.
Let’s go to Hollywood for their statistics for film production.
According to an article from Stephen Follows, 51% of Hollywood movies are profitable. What’s interesting is that films with a budget of $25M was as profitable as films with a budget of $100M. I.e. no difference in profit based on budget size. If we instead are looking at profitability for low budget films (< $3M) is the statistic show that only 3.4% are profitable. If we only look at profits for them with teathrical release, 30% is profitable. E.g. less profits with smaller budgets.
Profitability in Hollywood is on average 7% of the revenue. Compare with Spotify, a company celebrated for there software development, who turned profitable after ten years, with an operational margin of 3% for Q3 2019.
So far can we conclude that the dream factory is much more successful in running large projects that the IT sector, where large programs regulary fails.
Traditional banks have a profit margin of 10-15%, in spite of the fact that they usally can large IT projects. Most fintech companies are not profitable, so we don’t get any help from that sector.
Automotive, a sector as old as film have as an average a negative profit margin of -4.4% for the last ten years, but some smaller brands had profit margins near 10%.
Is your IT helping you to be profitable?
How often do you follow up your EA work, especially when you have been a consultant and left the building long ago?
We all know that unexpected things happens, but the question is if this will make huge changes to the plans done in Enterprise Architecture.
We are still impacted of Covid-19 limitations in societety and we will probably have a new normal in the future. Our EA didn’t foresee this comming, but we said from the start that we should be working remote and not to be forced to sit in the same office. ✅
This year in Sweden, there have been much more public discussions about working conditions on set. We didn’t see this curvball either, but we early recognized that in Sweden, this a sector where the planning for productions is subpar and contract management is really poor. This is why we said that these areas are important to focus on ✅
Our plans for making three movies with theatrical release in three years is not on track and may party need to be revisited. With near 1 1/2 year of lock down, theatrical releases are not mandatory, not even for Disney. The big question is if today’s requirements of two theatrical releases are needed as proof that you are an established film maker. But we still plan to premiere “Att vinna ett Kex” and ‘Saving Mimosa” on the big screen and I’m writing a manuscript for a third feature, “Lost and Found”, that hopefully can be shot next summer. ⚠️
We have also been working to implement new tools to our workflow in both pre-production and post-production according to plans. As we are dependent on cloud providers to offer services, this time plan is very much limited on external parties and their release schedules. ✅
We got a small profit last year and we think we do the same for 2021. Expecting higher revenues and profits next year (2022) when productions are back to more normal. ⚠️
KPI’s for GDPR and risk management are not yet started as I been focusing on recovering from my ridning accident last year. ❌
Over all, high-level architecture and principles are still valid for film production.
We don’t need safetybelts in our cars.
It’s add costs and customers don’t ask for it. It’s a very rare to crash the car if you are an experienced driver.
Do you think this sounds stupid?
If you resonate like some agile product teams, this is what you get as an answer for there software products.
Nobody asked for it.
It’s an exception, we only do the happy flow in our MVP.
We can add it later.
Would you like to drive a car developed by a product team who took the same aporoach to car safety?
But safetybelts are mandatory in today’s car may be your objection to this.
Privacy by design is also mandatory for new development. Old software is like vintage cars without safety belts. Use on your own risk.
Who is responsible in your organisation to assure that you don’t miss critical requirements?
In the best of worlds, each product team would have an endless freedom to manage all decisions about their product. Each team would be 100% autonomous in the planning and development of their features.
Development times would be much faster as each team wouldn’t have dependencies to other team. Each product team would then be small so they could be superefficient and avoid management overhead.
There would be no need for enterprise architects as the organisations architecture would be a blank paper, neither a program office as prioritization is not needed.
But in this best of worlds, the business mode canvas for the company need to be simple. Few value propositions, limited customer segments, one or two channels.
Source: Wikipedia
If you have a complex business model, then you need enterprise architecture and a firm governance of the produkt teams so that the things they build works together, by purpose, not by chance.
