Charlie Ponsonby, Co-founder and CEO of Plandek engaged in an enlightening and practical fireside chat with Darren Thorpe, Chief Product Officer of PEI Media at the Operating Partners Forum Europe conference hosted by Private Equity International (PEI) in May 2023.
They discussed how CTOs can really ‘make technology investment count’ at a time of intense pressure on costs and growth – by applying intelligent analytics to better understand and improve the software delivery process.
In front of an engaged audience of Operating Partners and Portfolio CTOs, Darren explained how his team have become metrics-led to track and drive value delivery, thereby creating a powerful culture of continuous improvement.
He explained how this metrics-led approach helps open up ‘the black box’ of software delivery to help PE and portco stakeholders better understand tech delivery effectiveness and ROI.
Let’s delve deeper into the 5 key points discussed during the chat:
1. Why R&D ROI really matters
“The return on investment is absolutely central to every investment discussion we have. We’re always looking at what sort of return we’re going to get on the investment that we’re making (in technology).” – Darren Thorpe
Darren opened his remarks by reminding us how important technology delivery effectiveness and ROI are for most businesses. Indeed ‘value creation’ and competitive advantage in businesses is very often dependent on the ability to deliver technology features to internal stakeholders or end-customers – as efficiently and rapidly as possible.
Indeed, this is absolutely the case in PEI media where R&D ROI is seen as critical and is a core element of investment discussions. Whether it’s at the Project Success Board, Capex Approval Board, or the Board level – the focus is always on evaluating the return on investment for technology initiatives.
The conversation further explored how measuring R&D ROI encompasses factors such as improved customer experience, increased operational efficiency, and competitive advantage. He emphasised the importance of identifying and quantifying these intangible benefits to present a holistic view of R&D ROI.
2. The lack of understanding of R&D ROI
Darren emphasised that, whilst R&D ROI is a key driver of success for most organisations, it is rarely measured and often little understood at the C-suite level.
Indeed, tech delivery is often a ‘black box’ within an organisation with money in and projects delivered – but little understanding of whether the team is efficient and the features delivered represent good value for money.
Apologising for the MBA-speak, Charlie noted that most Boards lack a ‘balanced scorecard’ of understandable metrics (KPIs) to demonstrate delivery efficiency and ROI. And trust and communication between tech delivery teams and internal stakeholders often suffer as a result.
But on the positive side, as Darren and Charlie noted, analytics platforms like Plandek can provide the insight and reporting needed to solve this gap in understanding.
3. Tracking and accelerating R&D ROI
“Delivering software in all its shapes and forms is a process that is measurable.” – Charlie Ponsonby
Charlie and Darren engaged in a detailed discussion on the process of tracking and driving R&D ROI, highlighting the importance of measuring technology delivery effectively. They acknowledged that the software delivery process is indeed measurable, and while terminology and technical jargon can create challenges, it is eminently possible to measure and improve the process.
Darren shared his experience of utilising Plandek, an intelligent analytics platform when he was working for his previous company, Preqin. There he used Plandek to gain visibility into the output of external engineering teams, identify improvement opportunities, and A/B test different ways of working.
Darren emphasised that by using an intelligent analytics platform like Plandek to provide a ‘single pane of glass’ he can define and track a balanced scorecard of metrics at different levels within his software delivery organisation, to effectively measure performance and drive improvement in technology delivery.
This ability to track and drive software delivery effectiveness enables the optimisation of R&D ROI.
4. Implementing metrics-led delivery
“When you expand your horizon and look at a toolbox of metrics, you will discover the impact of changes in the process.” – Darren Thorpe
Darren discussed the three levels at which metrics are implemented to drive improvement within the technology delivery team at PEI Media.
At the leadership level, the focus is on hypothesis-driven development and decision-making. By setting hypotheses about the impact of changes in the development process and using data to validate or disprove them, leaders can make informed decisions that drive performance improvement.
These hypotheses are then tested using metrics surfaced within Plandek and reviewed regularly by Darren and his team.
At the Manager level, Plandek’s delivery metrics dashboard provides visibility into delivery performance and helps identify bottlenecks and areas for improvement. Darren emphasised the need for a toolbox of metrics that cover various aspects of the software delivery process, including Lead Time, Cycle Time, Deployment Frequency, and quality metrics.
By using these metrics, teams can continuously monitor their performance and make data-driven improvements.
At the Team level, Plandek’s intelligent analytics identifies potential bottlenecks at the ticket level before they occur and highlights the impact of changes in the process. Darren emphasised the importance of Teams using their metrics to self-improve and not being scared to focus on metrics that directly relate to an individual’s work.
The conversation further explored the challenge of metric overload and the need for a selective and focused approach. Rather than overwhelming teams with a plethora of metrics, it is important to identify a core set of metrics that align with strategic objectives and provide meaningful insights. This helps teams stay focused and take targeted actions to improve their performance.
5. Case studies: The benefits of getting it right
“We cut our cycle time by 50%. That’s just incredible. That’s delivering more software, faster, for less money.” – Darren Thorpe
To demonstrate the effectiveness of metrics-led delivery, Darren shared his experience at PEI Media, where he implemented metrics using Plandek at all levels of the engineering process – with a particular focus on reducing Cycle Time (to reduce the time it takes to get new features (value) into PEI Media customers’ hands).
These metrics focus enabled the broader delivery team to make informed decisions, optimise processes, and drive performance improvements. As a result, the PEI Media delivery teams achieved a 50% reduction in Cycle Time, whilst also significantly improving Sprint Completion rates, and increasing Deployment Frequency by four times.
This success story highlights the power of using an analytics and performance improvement platform like Plandek to sit across the underlying DevOps toolsets (like workflow management tools (like Jira), code repos, CI/CD tools and monitoring tools), to provide a ‘single pane’ of metrics and data to make informed decisions, optimise processes, and drive performance improvements.
Conclusion
Tracking and driving R&D ROI is pivotal for operating partners in private equity (PE) firms. By implementing effective metrics and leveraging tools like Plandek, PE-owned portcos can demystify the software delivery process and make data-driven improvements.
The fireside chat emphasised the importance of effective communication between the C-suite and technology teams, the three-tiered approach to metrics-led delivery, and the benefits of using data to optimise processes and drive performance. With a focus on measuring and understanding technology delivery, portcos can maximise their technology investments and achieve long-term success.
Plandek is trusted across private and public sector organisations globally to drive productivity, improve predictability and accelerate the delivery of value. Plandek is currently used widely across portcos at Hg, Permira, Silver Lake, General Atlantic, Bridgepoint and many more.
If you want to find out more about how Plandek can support your portco CTOs to accelerate R&D ROI, please do not hesitate to get in touch or download Hg’s case study.
