As Freddie Mac conducted business through the fourth industrial revolution, the 50-year-old mortgage guarantor needed to rethink how it built and delivered software throughout the organization.
With the rate of innovation accelerating, the company set up a modern delivery program that refreshed the tools, structures and methods around executing software projects. The ultimate goal is to speed up productivity and innovation.
"If we are able to build a framework, have a process for developing software and put those tools in as many hands as possible, we are expecting to see our innovation double or even triple at the same time of improving our overall productivity," said Frank Nazzaro, EVP and CIO at Freddie Mac, speaking Wednesday at Reuters Events' MOMENTUM Virtual Forum.
The process led Freddie Mac to blur the lines between business and IT units, as a set of tools and process changes helped speed software delivery by removing bureaucracy. The business hierarchy is reimagined, and workflows gain speed and efficiency.
Companies in the financial services industries grapple with a rift between technologists and line of business workers. Perception of IT's performance varies with business-side workers sharing a less favorable view of the tech stack than their IT counterparts, a rift that Freddie Mac combats by blurring the borders between both functions.
Under its revamped model, Freddie Mac product owners lead the team and direction of the products, while IT managers move toward more of a coaching role as technology is rolled out. "We are pushing everything into these product teams including financial responsibility," said Nazzaro.
In the search to improve efficiency and speed, Freddie Mac followed three strategies as part of its modern software delivery program:
Customer-centric and agile execution
Freddie Mac was admittedly a late adopter of agile, according to Nazzaro. But the efficiency gains of agile methodologies, allowing workers to advance in tandem toward completing projects, was a powerful argument for its adoption.
In creating smaller teams, merging business and IT units and putting experts as close to each other as possible helped the company alleviate bureaucracy. It also helped reduce the delays and issues of quality in the software delivery process.
This shift in structure "wasn't without its challenges," Nazzaro said. "Traditionally, people are very tied to these organizational boundaries, and that is a hurdle that we had to get over."
Organizational and cultural change
The organizational and cultural changes needed to speed up software delivery were the most challenging aspects of the program, according to Nazzaro.
"Shifting the mindset and the behavior of the teams that have been historically bound to the hierarchical fashion of the previous structures is a very difficult thing to unwind from," said Nazzaro.
In keeping with the theme of putting more tools in the hands of more people across the organization, Nazzaro's role shifted from being directly responsible for processes to becoming a coach supporting software delivery.
Historically, Freddie Mac's approach to software development had been process-centric in its software development lifecycle, which generated what the industry refers to as "toil," or manual and repetitive tasks that deter efficiency among developers.
"We have basically taken all of those processes and automated them end-to-end using a series of open source software," said Nazzaro. This improved velocity and increased productivity across the software development lifecycle.
Alongside the decrease in bureaucracy, the use of open source tools that can boost efficiency also helped reduce the "arguing that would ensue," between organizations due to delays in delivery.