Egg shells out £12m in development restyle

Online bank Egg has completed a £12m shake-up of its software team, including a major change in the way that it designs and develops its products.

After the board approved a radical change to its development process in January, Egg began a fast-track programme to entirely refit a building in Derby to host all of the company's technology operations.

Darren Martin, Egg's director for technology development and delivery, led the project, overseeing the physical refurbishment of the building and the new ways of designing and developing products.

'We made the decision to change the process on the first of January this year. By July, we'd largely switched to a very agile internal environment, just in time to move into the new building,' said Martin.

The new working methodology was developed in conjunction with design company Ideo, which was responsible for creating innovative working concepts and products within firms like Nike, HP and Prada.

'We had an old "waterfall" style of development here, with requirements and specifications going through to technical design and development in a linear manner. It was a pretty long process, considering that we have a relatively small amount of people serving a significant number of customers,' said Martin.

The new style is a rapid application development method that brings technical and product teams closer together, speeds up time to market and ultimately results in better products for customers.

'Egg works at an amazing pace, it has an amazing energy about it,' he said.

A range of other working practices were introduced, including a technique known as extreme programming (see below) and temporary project rooms for technical staff to debate ideas with product teams.

Extreme programming, or XP, is a method of software development that pairs programmers and emphasises constant feedback.

The XP concept is only just starting to hit the mainstream, but end-user companies like Egg are using it to maximum effect, speeding up product development and reducing the number of flaws in the code.

Traditional development is typically a linear approach, with large amounts of up-front planning and long periods of time rigidly adhering to that plan. XP promotes a speedy cycle of plan, code, test, release, plan, code, test.

'It's very much around small packets of development going in very quickly. I wouldn't expect any piece of work to be going on for longer than two weeks without some sort of deliverable coming out of it,' said Martin.

Another big change is mixing up the financial experts that design new product concepts with the developers that turn those ideas into fast and simple online applications.

The teams meet every day in dedicated project rooms to brainstorm and discuss progress, with charts and Post-it notes pasted all over the movable walls to serve as a semi-permanent physical manifestation of the application being created.

Martin says this integration helps ensure the development teams deliver code that is consistent with what their customers - the product managers - had in mind, as well as ensuring that new products come to market faster.

'It means we can get value to market every couple of weeks, and you can almost continually improve the customer experience, which in turn makes the business hugely successful,' he said. 'The opportunities for this as a way of working are just huge.'

The changes have had a direct impact on business value, partly by enabling the company to contain and even reduce its development costs, and also by driving better products to customers.

'If we kept on growing at the speed we've been growing before, we'd have to have a 500-strong technology organisation. Instead, we've kept the actual number to around 100 people, which means we can keep them very focused and passionate, as well as keeping our development costs low,' said Martin.

The bank's latest financial results show development costs coming down 13 per cent, or £3m, to £20.1m, made up of a £1.7m cut in its UK budget.

Martin's team has also been working on updating other software processes and creating a new application to give Egg's call centre staff a single, real-time view of a customer's account profile.

A range of other new innovations is planned, such as the account aggregation feature Egg introduced last year, but these are shrouded in secrecy, with the bank unwilling to reveal what's in store for 2004.

Extreme programming: a happier approach to coding

Extreme programming, or XP, has been creeping into companies across the world over the past few years, with some experts saying it is revolutionising the software world.

At the heart of the concept is teamwork, with all coding done by two programmers on a single machine. The development process is also shaken up, with the old linear method of lengthy planning and development cycles giving way to bite-size chunks being rapidly produced.

Teams within HP, IBM and Symantec have taken up the XP methodology, saying that it makes their programmers more productive (and happier) and brings their code to market with vastly less errors.

Some of XP's core concepts include regular and ongoing planning, only working on and perfecting a small chunk of code at a time, and having a customer always available to test drive the finished component.