Luke Hohmann, Enthiosys CEO, spoke on "Bridging the Gap Between Business and Development" as a keynote for OOP 2007 in Munich. He explored the understanding gap between developers and business-side staff by asking that the "ideal developer" would be for each group.

1. 1
Bridging the Gap Between
Business and Development
Luke Hohmann
Founder & CEO Enthiosys, Inc.
Copyright © 2007 by Luke Hohmann

2. 2
Is There a Gap Between
Business & Development?

3. 3
Let’s Talk About Business
Finance
Development
HR
Sales
Marketing
Service

4. 4
So, Is There A Gap?
NO!
Development is
just another
business function,
focused on the
needs of the
customer.
YES!
Unlike other
business functions,
development
pursues their
interests over
customer interests.

5. 5
My Hypothesis
• There is a gap
• There will always be a gap
• It is not a gap of goals.
• It is a communication gap.

6. 6
The Source of The Gap?
Business Development
BDuesvienleospment
Insufficient appreciation for deeply intertwined
relationship between business and development.
Inability to communicate on their terms.

7. 7
Testing The Hypothesis
Imagine that
developers came in
boxes and were sold
at the store. What
would be on the box
that describes your
“ideal” developer –
the developer you
would buy?
Product Box
Innovation Game®

8. 8
The Results?

9. 9
They Want A Lot, Don’t They?

10. 10
Developer Dan (Danella)
Technical Competence
Customer Driven
Business Acumen

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Business Acumen
How do you
help your company make
more money than they pay you?

12. 12
Profit Engine Framework
A unique set of models that enable you to create
software-related offerings with maximum value.
Pricing Model
How Much Money You Make
Customer ROI Model
Quantifies Value
Enforcement Model
Protection of Rights
Licensing Model
Terms and Conditions of Use
Business Models
The Event That Makes
Money
Profit Engine
Causes More
Money Making
Events
Customer Value Model
Identifies and Captures Value

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Business Models
• The event that makes money / causes
money to change hands
• Multiple business models can co-exist in
the same product
e.g., txn fees and “optional modules”
• Why should you care?

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Six Core SW Business Models
• Time-based access
• Transaction
• Meter
• Hardware
• Service
• Percentage of revenue gained / costs
saved
Charity?

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Time-Based Access
• Grant “right to use” for a defined period of
time (even if you don’t actually use)
– Perpetual (like Microsoft Windows 2000)
– Annual (like many ERP)
– Rental
– Subscription
• Pay After Use...

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Effects of Time-Based
Access on Tarchitecture
• Today? Generally, minimal (honor system)
• Future? Disallow use
– Microsoft and others pioneering model
– Rentals / other models require both protection
and backend systems to support

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Transaction
• Defined and measurable units of work
• Exchange of money is always tied to the
transaction but customer value (and
therefore price) is often associated with an
attribute of the transaction
– Duration of a phone call
– Time of day call is made
– To whom the call is made

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Effects of
Transactions on Tarchitecture
• Do legal and technical definitions match?
• Uniquely identify & understand entire life
• Capturing the necessary data (schema)
– Direct: System captures and manages all data
necessary to support the business model
– Indirect: System must be integrated with other
systems to capture/manage necessary data
• Reporting/Remittance requirements
– Format? Security? Auditability?

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Meter
• Something that is counted
• Constraining a well-defined,
identifiable resource
– HW: You can only have four CPUs running or
only these terminals can access the program
– Named user: Only Amit, Bill, and Weng Li can
use the software
• Consuming a well-defined resource
– Concurrent (e.g., concurrent user)
– Absolute value (e.g., you have 100 hours)

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Effects of Metering
on Tarchitecture
• Varying degrees of enforceability
• When dealing with users/sessions...
– How will you authenticate users?
– How many will you allow? Under what
circumstances?
– Will you allow grace users?
– How do you distinguish between lack of use vs
dead or broken connection?

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Hardware
• Associate the amount charged
for the software with some
element of hardware
– Software anti-piracy dongles – you pay for both
the dongle and the license SDK/run-time
• Huge challenge: software becomes “free”,
especially in embedded software
– Home appliances – microwave ovens
– Information appliances – router/VPN server
– Consumer electronics

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Effects of
Hardware on Tarchitecture
• How do you upgrade?
• Will you network?
• Can you diagnose & repair problems or will
you do a wholesale component
replacement?
• Is there a cracker aftermarket?

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Service
• The exchange of money is tied to a service;
software is required to provide the service
or is intimately related to the service
– Symantec: Virus updates
– AOL: email
– Red Hat: Linux-related services
such as support or upgrades
• Often associated with
subscription pricing

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Effects of
Service on Tarchitecture
• What are data retention policies?
• Who owns what data?
• Who can use it?
• What are SLAs? Is your system capable of
meeting these SLAs?

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Revenue Obtained / Cost Saved
• Charge based on revenue obtained or
costs saved, often in terms of percentages
– Retail yield management
ServiceSource, with annual revenue between
$25M - $50M, says it receives compensation
based on the revenue it generates for its
clients and charges no consulting, training
or implementation fees, or ongoing
management costs.
- June 29, 2005, San Jose Mercury News

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Effects of
Revenue /Costs on Tarchitecture
• Closely related to Transactions
• What is the baseline?
• How do you track improvements?
• Audit and remittance?

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Let’s Try It…
• Adobe Acrobat
• Intuit QuickBooks On-Line
• salesforce.com
• Google adwords

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What Is (or Are)
Your Business Model(s)

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Customer (Market) Driven
Are you creating what they want?
How do you know?

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What’s a Requirement?

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Are You Sure?
How Do You Know
That’s What Your
Customers Really
Want?

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The Agile Manifesto (2001)
We are uncovering better ways of developing software by
doing it and helping others do it. Through this work we have
come to value:
– Individuals and interactions over processes and tools
– Working software over comprehensive documentation
– Customer collaboration over contract negotiation
– Responding to change over following a plan
That is, while there is value in the items on the right, we value
the items on the left more.
www.agilemanifesto.org

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Let’s Find Out Who You Talk With
Write your name in the
center of the circle.
Write the names of
people you collaborate
with at work around the
circle. Draw the web of
these relationships as
you see it. Use different
line weights and colors
to represent good/bad
communication. Spider Web

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Let’s Do It Again
Write your name in the
center of the circle.
Using your first diagram
as a guide, replace the
names of the people
with their organizational
roles (marketing, sales,
etc.). Use different line
weights and colors to
represent good/bad
communication. Spider Web

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Developer One

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Developer Two

37. 37
Manager One

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If We’re So Agile,
Where Are the Customers?
Do you have the
tools to talk with
customers?

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Techniques To Foster Understanding

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Getting Access To Customers
• Ask to be included when customers will be
present (e.g., conferences, user groups, etc.)
• Be a good Observer
– Don’t make any promises on priorities
– Don’t make any commitments
– Don’t talk negatively about your product or company
– Don’t talk negatively about your competitor’s products
– Don’t say “That should be easy”
– Don’t say “That is too hard”
– Listen nonjudgementally
Be forewarned: It isn’t always a fun experience

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Thank You !!!
I’d love to hear from you! Contact me at:
Luke Hohmann
Founder & CEO
Enthiosys, Inc.
cell: (408) 529-0319
www.enthiosys.com
lhohmann@enthiosys.com
Innovation Through Understanding