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The Self-Organizing Software Factory: Prof. Dr. Hermann Sikora’s Vision

Brandon M. Lewis
Jan 17, 2025 9:32:42 AM

In a world where software has become the backbone of modern business, Prof. Dr. Hermann Sikora, CEO of Raiffeisen Software, delivered a masterclass on the critical importance of transitioning to the self-organizing software factory. Through a meticulous exploration of industrial evolution and its parallels with software engineering, Sikora presented a compelling case for rethinking how we approach, manage, and execute software development in the digital age.

Prof. Dr. Hermann Sikora Sharing Deep Insights at the Hasso Plattner Institute-1

From Handicraft to Self-Organization: The Evolution of Manufacturing

Sikora began by tracing the history of manufacturing, drawing clear parallels between the rise of traditional factories and the potential future of software engineering. The journey, he explained, follows distinct phases:

  1. Handicraft Enterprises: These small-scale operations relied on personal expertise and manual processes, producing bespoke goods in limited quantities.
  2. Manufacturing: This stage introduced division of labor, specialization, and modest machine usage, paving the way for scalability.
  3. Industrial Plants: Fully realized factories with automated production lines, high machine utilization, and rigorous planning and control.

For software engineering, these stages serve as a metaphor for progress. While some organizations remain in the "handicraft" phase, relying on bespoke coding practices, others have embraced elements of automation and scalability. However, Sikora argued, the ultimate goal is to achieve self-organization—a state where software systems autonomously adapt and evolve with minimal human intervention.


The Case for a Software Factory

The software factory is not just a concept; it is a necessity. Sikora underscored its relevance with a bold assertion: "Software and software engineering are 100% business-critical." For industries like banking, he noted, software is as essential as equity. Without it, the entire business collapses.

However, while many organizations recognize the importance of software, few have taken the steps needed to adopt a true factory model. Sikora identified the core attributes of a software factory:

  • Engineering Precision: Defined processes, consistent use of tools, and a shared understanding of best practices.
  • Transparency and Measurability: Clear metrics and real-time visibility into all stages of development, enabling informed decision-making.
  • Scalability and Automation: The ability to expand processes seamlessly and automate repetitive tasks.
  • Continuous Improvement: A feedback loop that ensures processes and outputs are constantly refined.

The software factory, Sikora argued, is the “Champions League” of software engineering—difficult to establish but vital for long-term success.


Why Many Companies Struggle

Despite the clear benefits, Sikora acknowledged that most organizations have yet to implement a mature software factory model. He outlined several barriers:

  1. Cultural Resistance: The "not invented here" mindset persists, preventing teams from adopting new tools or processes.
  2. Investment Aversion: Many executives view software engineering as a cost center rather than a survival imperative, leading to underinvestment.
  3. Skill Shortages: There is a glaring lack of well-trained software engineers and technology-savvy executives to drive the transformation.
  4. Legacy Systems: Older systems and technical debt often inhibit innovation, as resources are diverted to maintenance rather than modernization.

Sikora emphasized that these challenges are surmountable but require proactive management and a shift in mindset at the executive level.


The Role of Artificial Intelligence

Artificial intelligence (AI) is poised to revolutionize the software factory. Generative AI tools, such as GitHub Copilot, are already streamlining coding processes, while advanced analytics enable greater transparency and control. Sikora predicted that AI would become the foundation of all engines in the software factory, transforming every aspect of the development lifecycle:

  • Analytics: AI-powered tools will provide insights into code quality, performance, and risks, enabling data-driven decision-making.
  • Generative Code: AI will automate repetitive coding tasks, allowing developers to focus on higher-value activities.
  • Continuous Monitoring: Intelligent systems will identify and address issues in real time, reducing downtime and enhancing reliability.

Sikora likened the rise of AI in software engineering to the advent of robotics in manufacturing—a disruptive force that will redefine how work is done and what skills are needed.


Two Models of Software Factories

Sikora highlighted two distinct interpretations of the software factory:

  1. Vendor-Specific Suites: These are frameworks, templates, and tools provided by large tech companies, tailored for specific use cases. While useful for small to medium-sized enterprises, they lack the flexibility and universality required for broader applications.
  2. Engineering-Driven Processes: This approach focuses on building a vendor-neutral, domain-agnostic framework that emphasizes transparency, repeatability, and scalability. It is the gold standard for organizations seeking to develop business-critical software.

The second model, Sikora argued, represents the true essence of the software factory, enabling companies to retain control and independence while achieving industrial-scale efficiency.


The Path Forward

To succeed in building a software factory, organizations must embrace a long-term, strategic approach. Sikora outlined the steps required:

  1. Commit to Transparency: Establish clear metrics and dashboards to track progress and identify bottlenecks.
  2. Invest in Talent: Address skill shortages by training employees at all levels, from developers to decision-makers.
  3. Adopt Agile and DevOps Practices: Use modern methodologies to enhance collaboration and streamline workflows.
  4. Leverage AI: Incorporate generative and analytical AI tools to automate processes and enhance decision-making.
  5. Prioritize Continuous Improvement: Build a culture of experimentation and iteration, ensuring that processes evolve alongside technology.

The Cost of Inaction

Sikora issued a stark warning to organizations that fail to adopt a software factory model: they risk becoming mere consumers, dependent on others for innovation and technological advancement. This dependency not only limits competitiveness but also exposes businesses to significant risks, from vendor lock-in to cybersecurity threats.

Conversely, organizations that invest in their own software factories will gain unprecedented control, agility, and competitive advantage. As Sikora put it, "Software engineering has universal problem-solving competence. Those who harness it will thrive; those who don't will fall behind."


The Future of Engineering

In closing, Sikora emphasized that the software factory is not just a technical concept but a strategic necessity. It represents the culmination of decades of progress in software engineering and offers a blueprint for navigating the complexities of the digital age.

Yes, we can implement the software factory, as Sikora concluded. But only if we are willing to invest in it, learn from it, and lead with it. The future belongs to those who dare to engineer it.

For businesses looking to stay ahead, the message is clear: the time to build is now.

Sikora

About the Software Excellence Network

This masterclass was part of the Navigating Software Production executive exchange, an event hosted by the Software Excellence Network. Dedicated to addressing the most pressing challenges in corporate software development, the Network fosters open dialogue and collaboration between leading IT executives and academia. By creating a platform for the exchange of innovative ideas and best practices, the Software Excellence Network empowers organizations to drive meaningful progress in the field. Interested in learning more? Click here.

A Note to Our Readers

This article provides a journalistic summary of the ideas shared by Prof. Dr. Hermann Sikora during his presentation. While we’ve highlighted the key concepts and innovations he discussed, the full depth of his insights and examples can only be appreciated by watching the complete session. If you’re intrigued by these ideas and want to hear them explained directly by the speaker, we encourage you to watch the full video of his presentation. If you have any questions or concerns, please contact us.