Software Automation and the Value Chain: Cost Drivers

The Takeaway: Automation can help lower the costs associated with your software project, resulting in more value and a price advantage in the marketplace

A key component in analyzing the value chain of your project/enterprise is investigating the cost drivers in the value chain. Meaning, your relative cost position (RCP) in the market is the sum total of the cost of performing all the activities in the value chain. The lower the cost of performing activities, if all organizations in the market perform roughly the same activities, the more value can be realized (not to say that decreasing costs always results in more value), and a possible price advantage can result.

Envisioning each activity in producing your software as a cost driver shows us several things:

  1. Where the resources go

    When you start to break down the total effort required to produce your software, you start to see every activity as a step that should add value to the product. Value is “the reflection of the price a firm’s product commands and the units it can sell” (Porter, Competitive Advantage, p.38). The difference between the total cost drivers and the total value of the product is the margin. Examining the cost drivers in your software project reveals what people on the project team spend time on and where the organization spends money.

  2. Over time, which efforts increase and decrease in cost

    Real value can start to be obtained when you look at your project in a longitudinal way. Certainly, there is worth in looking at cost drivers at a specific moment in time, but, as I’ve learned from analyzing software projects, analysis of trends over time can reveal information static analyses cannot. For example, have you implemented a new feature in the past six months, and, since then, the cost of your development has increased? Maybe that’s due to the development team having to go back and correct defects in the system introduced by this new feature. If this feature is adding value over and above its cost, maybe it’s worth keeping. If it doesn’t add value to your application, it may be something you’ll want to review and remove.

  3. Which activities provide the most value

    Each activity in the production of your software comes at a cost, whether it’s  money, time, or both. Using open-source software, for example, may not include an up-front cost, but may involve spending more time in the beginning getting the tools set up. Whatever the costs are, hopefully these tasks all create value in the software. Examining the cost drivers in the software lifecycle can show you exactly where the value is created, and which activities produce the most value.

  4. Which activities can be cut back while still delivering value

    Often, there are tasks where the amount of resources spent can be decreased without negatively affecting the value produced by those tasks. Additionally, there may be tasks that can be cut back or removed completely without affecting the amount of value created in the value chain. This is where efficiency gains are made.

  5. Which activities can be increased to increase value

Sometimes using more resources on certain tasks can result in even more value being produced. Is there a new tool or process you can utilize that, ultimately, creates a more usable or valuable application?

Software automation can be an integral part of value creation for your organization. Automation provides several benefits:

  • It allows an organization to utilize its resources more effectively. For example, automation can be scheduled to run after the close of business each day. Utilizing tools like Selenium and the Selenium Grid, an automation team can set up their grid to run automated tests on the manual quality assurance team’s computers when the QA team is not in the office, getting more use out of otherwise-unused machines, and also freeing up the manual QA team to perform other duties during working hours.
  • Automation teams can reduce the complexity and costs of coordination between connected activities in the value chain. Automation can be set up to, for example, check the status of a development environment for build failures, and notify the right team member if something isn’t set up correctly. No need for the project team to start working on a development environment, only to find out, one at a time, that there’s a defect preventing the team from working on the application, then deciding how to move forward from there.
  • Automation can be timed effectively to produce valuable data. Most software build systems can trigger an automated testing package, so that, when a new build is started, testing can be an automatic part of the build process, testing the new build for failures as soon as possible.

In the next article, we’ll look at cost drivers individually, and how automation impacts each of them in order to produce value and increase the margin of your software application.

UI Automation With C# and Selenium: Adding Your Project to GitHub

The Takeaway: Using GitHub as your repository for version control makes development of your automation solution MUCH easier!

An important element of your automation project is to make sure you can keep it backed up and available. 

A great way to do that is with GitHub. As a version control system and repository, GutHub allows you to keep track of changes in your automation solution, make the code available to others working on the project, and fork your project in order to further develop the project in new directions.

This article will assume that you:

  • Already understand the basics of version control and repositories. If not, this video and associated YouTube channel can help out there
  • Already have a GitHub username and password. If not, do that here
  • Already have the GitHub Extension installed as part of Visual Studio, If not, here it is. 
  1. Open your Automation solution in Visual Studio. 
  2. Right-click on the solution for the project and select Add Solution to Source Control

    Visual Studio - Add Solution to Source Control
    Visual Studio – Add Solution to Source Control
  3. At this point, Visual Studio will create a git folder in the folder where your solution is saved (which is typically hidden). This folder is needed to keep track of changes to your solution

    Visual Studio - Git Folder Created
    Visual Studio – Git Folder Created
  4. You will also notice that your solution, folders, and files have a blue lock on them

    Visual Studio - Solution Locked
    Visual Studio – Solution Locked
  5. Navigate to the Team Explorer window

    Visual Studio - Team Explorer Home
    Visual Studio – Team Explorer Home
  6. Click the Sync link, and the Publish to GitHub option should display

    Visual Studio - Publish to GitHub
    Visual Studio – Publish to GitHub
  7. Click the Get Started link. Since the repository you just created doesn’t haver a remote version, we can use this tool to create a version on the GitHub website

    Visual Studio - Repository Details
    Visual Studio – Repository Details
  8. Click Publish. Now you should be able to go to your GitHub Profile, click your Repositories link, and view your repo
    GitHub - New Repository
    GitHub – New Repository

    Click here to find the above page, so you can either clone or download the files for this solution as well!

Software Automation and the Modern Web: The Web As a Platform

The Takeaway: The modern Web is a platform for user connections, and automation can play an important role in ensuring platform integrity.

The advent of Web 2.0 has altered the way users interact with enterprise-level software and the way enterprises incorporate software into their business.

Tim O’Reilly’s definitional article (2005) describes the shift that started around that time and points to a number of factors that have led to the proliferation of Web applications for business use.

The Web as a Platform

The World Wide Web has become its own platform, upon which developers are developing next-generation Web applications and rich Internet applications. The evolution of the Web as a platform allows developers to think about applications as browser-based services, independent of user operating systems. Some even argue that the Internet browser is becoming the next operating system, capable of delivering applications and extending architectural capabilities in much the same way traditional, desktop operating systems have worked for many years (Wayner, 2013; Garaizar, P., Vadillo, M. A., López-de-Ipiña, D., & Matute, H., 2012).

The success of Google’s Chrome OS points to the
successes companies are seeing with implementing
Internet-as-Platform concepts.

Using the Web as a platform, instead of a specific operating system or specific browser, frees developers from the constraints imposed by utilizing operating systems and browsers, allowing the large amounts of interoperability organizations require from their Web applications. Thinking of the Web as a platform also highlights the network effects possible with Web applications, where the value that the Web application provides the organization using it increases as the number of individuals using the application increases.

What This Means for Automation

Automation plays a valuable role in the Web as a Platform in several ways:

  • The World Wide Web allows us to start abstracting applications from traditional operating systems, but the implementation of the same browser in various operating systems still means there is a need to test those implementations in order to minimize risk. That’s where Sauce Labs, BrowserStack, and the Selenium Grid come into play.

We, as automation engineers, need to understand that, for the web applications we automate, a core strength is an application’s flexibility and “lack of control”.  Once a vendor attempts to control both ends of communication, you lose the primary value of the Web. There are ways to mitigate risk, whether it’s by only supporting particular browsers and not using resources to troubleshoot user issues on other browsers, or by testing your application on multiple browsers/versions/operating systems to make sure your application performs as well as it can on a wide variety of end-user machines. Thankfully, we are also able to mitigate risk with responsive websites that can display information in different ways depending on the browser and the end-user device. Decisions made

Decisions made at the beginning of any software project about browser/device compatibility impact automation effort scope and automation engineers should be in on these conversations from the start.

  • A key tenant of Web 2.0 is that the service improves as the number of users increase. The WWW’s focus is on connections, clients, hosts, and, most importantly, the information that flows between through these connections and between these end-points. Automation’s ability to precisely execute a set of inputs, and then compare the actual outputs with expected outputs helps ensure that all possible execution paths of an information system meet user expectations.

Automation’s Place in the Value Chain

The Takeaway: Automation adds value to your DevOps/SDLC process and can be a large part of your project’s success in the marketplace.

I feel that management theory is not only necessary for understanding a individual’s place on a team, a team’s place in an organization, and an organization’s place in the market. Not only that, but I like reading and talking management theory.

While I do recommend Michael Porter’s Competitive Strategy and Competitive Advantage to anyone wanting to know how to better understand how businesses compete in the market or how their business affects and is affected by internal and external forces, I also understand these books are a bit hard to read through with understanding.

Value Chain

“…strategically relevant activities [disaggregated] in order to understand the behavior of costs and the existing and potential sources of differentiation.”  (Porter, Competitive Advantage, p. 33). 

The way you stay in business is by doing things either cheaper and/or better than its competition. Once you separate and examine each individual activity in your collection of activities performed to design, produce, market, deliver, and support the thing you make, you start to gain an understanding of where the resources go. Where do we spend time that we can cut out? Where do we spending money that makes our product better than our competitors’? This is the (basic) idea behind the aglie manifesto, right? Cut out the things that cost time and money unnecessarily

  • processes and tools
  • comprehensive documentation
  • over contract negotiation
  • following a plan,

and focus on the valuable things

  • individuals and interactions
  • working software
  • customer collaboration
  • responding to change.

Focus resources on the things that matter, and you’re a step ahead of competitors that don’t.

Michael Porter's Value Chain
Michael Porter’s Value Chain

Value Activities + Margin = Value Chain

The total Value Chain is comprised of Value Activities and Margin:

Value Activities

“…physically and technologically distinct activities a firm performs… building blocks by which a firm creates a product valuable to its buyers…” (Porter, Competitive Advantage, p. 38).

There are Primary and Secondary (Support) activities. We’ll focus on support just to keep things simple.

The typical primary value activities do not apply across all industries equally. Manufacturing, for example, relies much more heavily on inbound and outbound logistics than software development, for example. For our purposes, I’ll rely on a classical approach to software value chains provided by Boehm and Papaccio (1987, NTRS), and state that the majority of software development falls under the Operations and Service value activities. 

Operations: Transforming inputs into the final product form (requirements into an application)

Service: Providing service to enhance and maintain the product’s value

Margin

“…the difference between total value and collective cost of performing the value activities…”(Porter, Competitive Advantage, p. 38). 

Margin depends upon the efforts placed in the value chain that add value to a product over and above the costs incurred in the value activities. 

What Automation has to Do With The Value Chain

The good news for automation engineers, is that automation can be a crucial part of the value chain. For any task that can be automated effectively, the cost of that activity decreases significantly. For testing, as an example, instead of using three resources for a week to regression test your application, you can do it overnight, and view the results the next morning. Certainly, there are resources required to develop and maintain the regression testing suite, where the value obtained form those efforts starts small, but will increase over time. However, proper planning and execution can help ensure that value is delivered as quick as possible.

Additionally, automation is helpful in the detection, reporting, and verification of defects. A system defect drives down the “worthwhile-ness” of any product. Good automation efforts discover defects before your customers do, and can, if executed correctly, discover them before manual testing efforts. 

The important thing is to start thinking of any repeated task as something that can be automated. Not every repeatable task should be automated, so discernment is required in order to ensure that the right things are automated. But, progression of automation efforts has been shown to increase the value of the activities you perform in your software development life cycle.

As we continue this series, we’ll delve further into aspects of automation that help deliver value over its costs, how you can implement automation to achieve these goals, and what to look for in order to be successful with software automation.