How can we reduce costs, develop faster, and become more efficient? In this presentation, I walk through the core concepts of the Cybernetic Enterprise and show how organizations can continuously deliver value by combining value stream analysis, platform engineering, and AI.
The Hidden Cost of Unused Features#
Here is a fact that surprises many people: 80% of features in the average software product are rarely or never used. Multiple studies confirm this number. On top of that, maintenance costs over the full software lifecycle add another 40 to 80% on top of the original development cost.
Let me illustrate this with a simple calculation. If you develop 10 features at CHF 100,000 each, your total development cost is CHF 1 million. Maintenance adds another CHF 400,000 to 800,000. That brings the total lifecycle cost to CHF 1.4 to 1.8 million. By eliminating the 80% of rarely used features, you could save roughly CHF 1.1 to 1.4 million. The takeaway is clear: building the right thing matters enormously.
“Doing the wrong thing right is not nearly as good as doing the right thing wrong.” — Dr. Russell Ackoff
Building the Right Thing vs. Building the Thing Right#
These are two fundamental concepts for saving costs. Building the right thing is about aligning your solution to business and user needs. Only if the user actually uses a feature is it a useful feature. This is about effectiveness.
Building the thing right is about how efficient your engineering practices are, how fast you can deliver changes, and how easily you can adapt. This is about efficiency. My presentation focuses on the efficiency side, but both are equally important.
Value Stream Mapping: See Where Your Money Goes#
Modern software development is a continuous process across a value stream. It is not a project with a start and end date. It is product development that never stops until you decommission your software.
Value stream mapping is a powerful technique to understand how value flows through your system and to identify bottlenecks. Here is how you do it:
- Gather your team and identify all steps from ideation to production
- Identify the people working on each step to see handoffs between roles
- Measure performance using process time (actual value-added work), lead time (total elapsed time), and percentage complete and accurate (quality)
- Calculate the activity ratio by dividing total process time by total lead time
- Design your future state value stream with improvements
In the example I showed, the current state had an activity ratio of just 7%, meaning 93% of the time was spent not doing value-added work. The percentage complete and accurate was only 5%, meaning rework happened in 95% of cases. After designing the future state with streamlined processes and automation, the activity ratio improved to 11% and quality rose to 72%.
Where to Invest: Process, Automation, and Organization#
Once you have your value stream visualized, you can make data-driven decisions about where to invest:
- Process improvements: Streamline workflows, eliminate waste, and standardize procedures
- Automation and AI: Use modern tooling, infrastructure as code, and AI where the data shows it will have impact
- Organizational structure: Reduce handoffs by organizing teams along the value stream
- Governance: Automate or eliminate heavyweight governance bodies that slow things down
The beauty of value stream mapping is that AI is no longer a vague “we could use it somewhere” idea. You can see exactly where AI fits and verify whether it had the right impact with real numbers.
The Cybernetic Platform: Your Technology Foundation#
A value stream needs the right technology foundation. We are entering the age of industrialized digital product development, moving away from custom, heterogeneous tool landscapes toward standardized platforms.
The target operating model of a Cybernetic Enterprise has autonomous product teams focusing on features and business value, supported by a platform team that creates a self-service platform. This platform, what I call the Cybernetic Platform, provides all the tools and capabilities product teams need:
- Observability with pre-configured dashboards
- Security scanning for vulnerabilities, licenses, and secrets
- Golden path templates for standardized project creation
- AI as a service for the entire organization
- Container registries with automated scanning
- GitOps-based deployments through Argo CD
The core architecture follows the floating platform principle from Gregor Hohpe’s book “Platform Strategy.” You integrate all tools through the platform, never directly with each other. This is critical because if a vendor gets acquired (imagine Broadcom buying GitLab), you can swap out that tool without disrupting your teams.
Live Demo: The Zühlke Platform Plane#
At Zühlke, we practice what we preach. Our own Cybernetic Delivery Platform serves 465 users, 15 partners, 26 spaces, and 12 Kubernetes clusters. We use it for internal projects and customer projects alike.
Key capabilities I demonstrated:
- Partner management: Onboard external companies with their own identity through Azure Entra ID. Someone gets access to all integrated tools within a second.
- Spaces: Network zones using a hub-spoke pattern where teams can run whatever they need.
- Security: Automated vulnerability scanning, license compliance, and secret detection across all repositories.
- AI integration: Container image analysis powered by AI, built in just eight hours because the platform provides the APIs.
- Service catalog: Developers can provision databases, Azure OpenAI endpoints, and other services through self-service, no passwords or backups to worry about.
- FinOps: Cost tracking per space, charged back to projects.
The platform team generates value for the teams, and the product teams generate value for the customers.
Key Takeaways#
- 80% of features in average software products are rarely or never used. Build the right thing first, then build it right.
- Value stream mapping is a simple but powerful technique from the 1940s that gives you data-driven insights into where to invest in automation and AI.
- Platform engineering creates the technology foundation for your Cybernetic Enterprise, standardizing how products are built.
- The floating platform principle ensures you can swap tools without disrupting teams.
- AI is a capability of your platform, not a standalone initiative. Provide it as a governed service.
- The future belongs to those who master the symphony between organization, process, technology, governance, and AI. This is how you reduce costs by continuously delivering value.