Softwarization: How to turn technology into business value

How can organizations harness Softwarization’s potential while navigating the challenges it brings?

Softwarization is reshaping how value is created, how quickly it reaches the market, and how deeply technology permeates every function. Organizations expect software-based revenue to grow to nearly 30% by 2030, a clear sign that software is no longer just an enabler, but a core driver of business models.

In the age of Techceleration, the business landscape is undergoing a profound transformation. Accelerated by AI, cloud computing, and Pervasive Tech, software has moved from being a support function to becoming a core driver of value across every industry. 

This shift, known as Softwarization, marks a fundamental change in how organizations operate and compete. As clients across industries embrace software-defined products and services, their operating models, risk strategies, and delivery partnerships must also evolve. Executives increasingly expect future revenues to be driven by digital solutions. This expectation prompts the question: How should organizations structure, secure, and scale to meet this new reality? 

Softwarization marks a fundamental shift toward software-defined products, platforms, and services. But it is important to note that Softwarization is not just a target state; it’s a process of continuous transformation. Organizations must embrace change. This often means reimagining how they build trust, structure operating models, and deliver software. Softwarization is a critical enabler for organizations navigating the shift toward software-first strategies.

This blog looks at three pillars of Softwarization:

Trust as a business promise 

Trust is a cornerstone of business success, earned through consistency, transparency and accountability. In the context of Softwarization, trust goes beyond simply compliance. It becomes a business promise: a core principle that underpins every digital interaction, transaction, and relationship. As organizations digitize more of their operations, the risks associated with cyberattacks, data breaches, and AI bias grow exponentially. Customers, employees, and partners expect robust cybersecurity. But they also expect transparency, ethical use of data, and resilience in the face of disruption. 

Digital trust encompasses several interconnected pillars: cybersecurity, compliance, end-to-end risk management, resilience, and the fight against fraud. These are concerns that extend beyond the IT department, they are important throughout the business. For example, compliance with regulations such as GDPR (General Data Protection Regulation) is not only about avoiding fines but about building confidence with customers. Similarly, ethical AI practices are essential for maintaining trust as AI becomes more pervasive in decision-making. 

There are a huge number of opportunities for those who get trust right. By fostering a culture of trust and deploying state-of-the-art cybersecurity solutions, businesses can achieve stronger resilience, better incident detection, and enhanced business continuity. However, the challenges are real. Confidence in technology can be fragile, and incidents of cyberattacks or AI bias can quickly erode hard-won trust. 

Organizations need to embed trust across the operating model, from secure architecture and risk management to transparent communication and continuous education. They should also treat trust as a differentiator: organizations that can demonstrate their trustworthiness win and retain customers. 

Performant operating model 

If trust is the foundation, the operating model is the engine that drives value from Softwarization. Traditional, functionally siloed IT can’t keep pace with Techceleration. A new approach is required, agile, product centric, outcome driven. 

At its core, a performant operating model empowers cross-functional product teams, simplifies governance, and attracts digital talent. It is designed to break down silos, foster collaboration between business and IT, and accelerate time-to-market for new products and services. 

A product-centric IT operating model aligns business and IT around end-to-end journeys, focusing on customer, employee and strategic outcomes, and supporting ongoing software modernization. This alignment is about efficiency and unlocking innovation, deepening customer relationships, and creating new revenue streams. Key components are adaptive governance, just-enough architecture, and data-driven portfolio management. 

However, this transformation is not easy. The journey to a performant operating model requires careful change-management, a willingness to experiment, and a commitment to continuous improvement. Organizations must balance autonomy with alignment, manage complexity, and ensure accountability at every level. 

Recommendations for implementation include: 

• Starting with pilot product teams to test new ways of working. 

• Iterating based on data and feedback. 

• Establishing a transformation capability – such as a Value Realization Office – to scale successful pilots. 

• Leveraging a digital factory to incubate new digital culture and operating models. 

Augmented software house 

An augmented software house is a collaborative approach for software development that combines business and IT teams with advanced tools, applications, and practices – like AI, automation, and platform engineering – to deliver high-quality software faster and more efficiently.  

As software becomes the primary source of competitive advantage, excellence in software delivery is no longer optional. An augmented software house brings together operating model, platform engineering, CI/CD (continuous integration/continuous delivery) pipelines, and AI-enhanced developer experience. It is built on partnership, shared objectives, and a commitment to continuous transformation. 

What sets an augmented software house apart is its ability to unite client and partner teams through joint management, fostering shared business objectives and mutual risk ownership. It also stands out by leveraging state-of-the-art sourcing models, accelerators, and continuous improvement cycles. An augmented software house also maintains a sharp focus on delivering business value through adaptive architecture and cultivating an effective agile and DevOps culture. 

Opportunities include: 

• Maximizing value delivered to the business. 

• Achieving higher productivity and software quality. 

• Building the capacity to keep pace with rapid technological evolution. 

However, alongside these opportunities are challenges, particularly in building the right partnerships, maintaining flexibility, and adapting experience. There is no one-size-fits-all blueprint; success depends on the ability to learn, adapt, and co-create value. 

In practice, organizations are advised to: 

• Define a joint management cockpit to oversee the software house. 

• Commit to shared business objectives and transparent measurements. 

• Invest in software excellence assets and accelerators. 

• Continuously measure and adapt based on business impact. 

As technology becomes ever more pervasive, the winners will be those who can build trust as a business promise, operate with agility and performance, and deliver software excellence through augmented, collaborative models.

Software excellence is a leadership choice

Enterprises that treat software as a core business capability will outpace those that treat it as a cost center. This requires re-architecting operations, driving software modernization, making trust tangible for customers and regulators, and fostering augmented partnerships that continuously learn and evolve. Softwarization is here, the question is whether your organization will turn it into your advantage.