Building a scalable DXP - Part 1
Scale is one of the most common and fundamental problems digital teams have to confront in order to grow their businesses. But more than just a key to unlocking growth, how a team thinks about scale can affect costs, ongoing resource capacity, feature roadmaps, and even an organization’s overall pace of innovation.
In the universe of digital experience (DX), which spans all the way from the devices at the frontier of your audience’s senses all the way to the cloud and hardware that powers your company’s back-of-house operations, scale applies in some way to nearly every facet between these two ends. Understanding how the systems, people and processes that make up this end-to-end DX assembly line fit together and affect each other is key to unlocking that scale.
This article aims to explain how to scale your digital experience platform (DXP). In it, we will discuss the meaning of scale, how to approach scale within your organization, and why it’s important.
What exactly does it mean to scale?
Simply put, scale is the relationship between the inputs and outputs of a given system. When people refer to scaling a business, they are typically talking about increasing outputs, like sales and revenue, while holding constant or decreasing inputs, like costs and materials.
In an engineering-oriented team, scale often refers to hardware and software, such as the ability to flex or expand capacity to process more operations. If you work on a content or marketing team, scale usually refers to growing your audience, increasing engagement, and publishing more and better content. On the business and leadership teams, scale usually means increasing revenue.
But these definitions of scale are oversimplified because they focus only on the outputs of these systems while ignoring the inputs. Or to put it another way, when we are talking only about increasing the outputs of a system, we’re talking about growth. When we talk about increasing outputs relative to the inputs, we are talking about scale.
A “scalable” case study
Consider a digital agency as a hypothetical case study. The agency builds highly engaging promotional websites, and its revenue is directly tied to the number of websites it can implement for its customers. Let’s assume the agency is high touch and that each website takes a total of 1,000 hours to successfully design, build and launch.
Let’s also assume that the agency employs 10 people, for a total of 20,000 available hours per year (ignoring PTO) and enough resources and the proper staffing configuration to successfully sell and deploy a maximum of 20 new sites per year.
A blunt approach to scaling this business model would be to demand more than 20 sites out of the talent. In this approach, leadership sees the staff as the enemies of scale and demands more output from them in the form of working faster and staying late to meet aggressive goals. Indeed many companies attempt this strategy at the cost of talent attrition, sloppy work, constant training of new employees, missed deadlines and lost customers. Launching just two additional sites per year would require every employee to work an average of about one extra half-day every week of the year, leaving scant time for family as well as the occasional urgent customer support request.
Another approach is hiring additional talent and slowly scaling up output while demand catches up to the newly increased capacity. Although this approach is common, it comes with the risk of increasing investment before increasing revenue, and when applied responsibly it can take some time to pay off. Leaders who choose this tactic will hire, say, two more staff with the aim of selling and launching about four additional sites per year. While this approach is intuitive, once the full cost of two FTEs, the opportunity costs of training them, and the revenue from four additional sites are factored into the balance sheet, it’s easy to see that this approach could be slow to take off and perhaps actually decrease the agency’s profit margin over time if it doesn’t go well.
Now consider a third approach, where leadership recommends that each team looks for opportunities to repurpose generic work developed for other customers in order to reduce the number of hours required to implement new websites. Over the course of building the next few sites, the teams are able to develop reusable components of their work, for example, in the form of code and design libraries for commonly requested solutions, which in turn results in an average reduction of 200 hours across all website deliverables. This means that the agency can now produce 20 sites of the same or better quality in only 16,000 hours, which increases output capacity to 25 websites in the same original 20,000 available hours without adding staff or increasing costs.
Scale smarter, not harder
While each of these three examples are strategies for how an agency might approach scaling up output, the third example is a clear frontrunner because it has the highest impact on increasing output while at the same time holding inputs relatively constant. The third approach is also the only example out of the three that can lead to economies of scale. Economies of scale describe the state of a relationship between an input, such as cost per unit, and an output, say, the number of units produced, where the cost per unit actually goes down as you create more units. This relationship between inputs and outputs is what people typically mean when they say they want to scale something. It is not just that they want outputs to grow, but that they want outputs to grow and the cost of inputs to stay flat or decrease at the same time.
Although this case study centers around an agency and looks at three simplified approaches to scaling the overall business outputs, it’s useful to shed light on the fundamental concepts of scale before unpacking the specifics of scaling a DXP. Here we’ve highlighted two essential tenets that will benefit digital leaders as they work to scale nearly any system:
There are many ways to approach a problem of scale, some sustainable and some unsustainable. Scaling on the backs of employees, for instance, is not a sustainable approach. There is nothing wrong with hustling to achieve a goal, but hustle alone lacks the strategic thinking that unlocks scale, which leads us to our second tenet.
Effective and durable scaling centers around creativity and is founded upon understanding — not brute force. But don’t be discouraged if you feel you or your team lacks creativity or your processes are too complex for anyone to understand. As we will see in the following articles, there are some tried and true methods for creating the conditions for creativity to emerge, and if you apply them with your teams you will have a higher likelihood of successfully achieving scale, no matter what it is you wish to scale.
What’s next? Now that we’ve established a baseline understanding of scale, in Part 2 we will set the agency example aside and explore specifically what it means to scale a DXP. Stay tuned!