Monday, 13 December 2010
A Great Divide is what I see for the coming decade. Not a hydrological divide of the Americas, but an IT-divide of the business.
Pretty much a follow-up from my one year-old Cloud and Social: the tectonic plates of IT 2.0, this post will show the great challenge Business and IT need to face together to make it through the coming decade: overcoming the explosion of forces that will rip up the foundations of every business: IT as we know it
In the past decade, outsourcing and off-shoring have been tried and tested, and are now part of pretty much every enterprise's "IT department". What they have basically done, is spread local IT-expertise across the globe: a part of that is now supported from nearby (outsourcing) or afar (off-shoring). Usually, infrastructural matters get outsourced, and application development gets offshored.
On the one hand this has cut down functions (usually basic application and customer support), on the other hand it has increased the need for "bridge-builders": people that can translate between local IT and non-local IT
With a bit of bad luck, 1/3rd of the IT is now local, 1/3rd is outsourced, and 1/3rd is off-shored - that's close to dismemberment
For the coming decade, I see Cloud and Social Media tearing up the remainder of IT. Cloud will take up a large part of existing infrastructure at the bottom of the architectural layers with IaaS and PaaS, and slowly move up towards the application layer with SaaS. Social Media will invade the enterprise from above, connecting people to people and exceptions to exception handling, where there is little room for automation at all. However, Social Business activities should somehow be put on record to serve collective memory and customer records.
With a bit of bad luck, 1/3rd of the IT will be traditional, 1/3rd will be Clouded, and 1/3rd will be Socialised - that's close to dismemberment
Together, these four different movements make for a perfect, fully complete dismemberment: my idea is that most companies will feel like the man depicted above, by 2013-2015.
Social software of all kinds will invade your enterprise, Cloud software will merely scratch its surface but the resulting data is what needs to be combined with the traditional enterprise data - in the first few years of this coming decade, The great Divide will certainly be felt: where the current IT world has been horizontally stretched across the globe, it will now be vertically stretched across the architectural layers - stretched like a rubber band, when will it break...
How can you keep it all together? Cloud, Outsourcing, Social, Off-shoring? Together with your local and traditional IT? Not to forget the traditional vendors that will invent new ways to keep territory from being lost to them. Will you need an army of bridge-builders on top of it all?
Yes, you will. And that need will not go away anytime soon
ERP has attempted to cover the diversity of IT - and far from succeeded. Many vendors have taken over companies and products and are still trying (hard) to integrate those into their existing suite - an ongoing process much like evolution and IT change itself - and the customer pays for that effort one way or the other, and will continue to do so - how else can the vendor keep up the effort?!
Integration has been driven by vendors and opportunists during the last decade: using highly general terms like SOA, Web Services and WSDL, XML was introduced as a technical solution to an organisational problem, obliterating the threshold and leaving the Field of integration in rubbles: there is not a single web service or SOAP envelope in the world that is interoperable with the same one that was invented next door
If that failed, what do we need?
We need agreements. And people. Human agreements. Business agreements. Not tools or tech - tech is merely a necessary evil because our businesses grew from 1-person entrepreneurs to multinational enterprises. We need people to understand people again. Customers, suppliers, employees - they all need to understand one another.
Machines now form the links between people, because enterprises grew so large. When letting those machines collaborate, people's agreements should be driving them - not machine limitations. We need a top-down approach to Integration, not bottom-up
What can you do to prepare for The great Divide?
In the next 6 months, write out your company's business processes, process steps, the rules and exceptions, the points-of-no-return there, the prerequisites, the mandatory data and information needed, the optional, and especially the conditional data: data that becomes either mandatory or optional depending on the presence of other data.
Ignore all tools, simply follow people and process: the business alone.
Write them out, in simple language, plain English, so everyone can understand. Publish them on your wiki, your blog, the walls of your cafeteria if all else fails. Discuss them with everyone, from CEO to external test consultant, business and IT people the like - agree on them all. Agree on the rules, the exceptions, make sure you understand each other again, everyone
In the 6 months after that, trace them all back: your company's processes, process steps, and all of the above. Trace them back to the information systems, the machines, the interfaces, your customers, your suppliers, all the tools in place that handle them.
Check for anomalies there. Map and chart the information flow from machine to machine: how many processes are double, triple, quadruple or even more? Determine those you want to keep, and those you want to disable for good. Maybe you can even get rid of entire applications or systems. This is not just an application rationalisation exercise, it is getting ready for The Great Divide
Then, take some time to think about a strategy: 30 minutes should be enough.
Outsource the dull, boring work, your best-performing applications that need the least maintenance - not your worst problems.
Offshore your simplest application development, that what is furthest away from the business, and closest to infrastructure - not the tailormade business applications that give your business that inch of advantage over the competition
Think about Cloud: it's a 100% machine-business. IaaS the infrastructure you want to scale up or out at the flick of your fingers. PaaS your DTAP: Test, Acceptance and Pre-production systems have never come at a cheaper price. SaaS those services for which you lack user-volume or business commitment
Prepare for Social - for it will come. Impossible to automate initially, it's a 100% people business. Focus on your aftersales, your customer service and maybe even your own employee service - you might want to practice what you preach by being social to your own employees as well: when making mistakes, they might be easier on you than the customer
Check if the AS-IS (the current situation) is in line with the TO-BE (the future situation as it looms on the horizon)
12 months from now, know what you want to Outsource, Offshore, Cloud and Social for the next 2-3 years to come. Then, try to keep your process chain intact.
In case of Disaster, or Recovery, who needs to do what where? The same for simple maintenance, market change, service or entire application-replacement or -upgrade?
Keep your local IT in the center as a hub at all times, and the Four Directions as spokes to the hub. More than one external party supporting a single process? They'll just point at each other in times of trouble, leaving it up to you to figure out who has to solve it. Always make sure that your local IT is at the center of the hub, and that communication between spokes is centralised via that same hub: prevent a lock-in at any time
After that, when you're ready to be dismembered, and feel self-assured that you'll keep on top of things no matter what, deploy the Integration services that will support you there and strengthen the weak links.
The timescale may vary with your mileage, but with any luck you'll be ready around 2012-2013. When the competition just realises the big spaghetti mess of lock-ins they got themselves into, you'll be strategically repositioning the pieces on your chessboard and make your next move: integrate your vendor's private Cloud into your own (hybrid?) Cloud solution, link their SCRM to your CRM and Social Media, and slowly scale up your Social Business from aftersales to presales and product, now it's integrated throughout your entire company
At the end of the decade, your vendor will have changed to Cloud all the way, and private and hybrid Cloud will be regarded a necessary bump to take, allowing traditional vendors to slowly converge to Cloud.
SCRM will be considered as a not-so-lucky initial try at Social software, before we all knew that Social 180-ed the existing world of simple, predictable, easily-to-automate business rules to that one of complex, largely unpredictable and -repeatable, hard if not impossible to automate business exceptions, hitting the old-fashioned enterprise like a truck.
Off-shoring will have no continent left to go, and fully penetrated China and Africa, having shifted to network-organised pensioned people in the US and Europe who are more expensive but a few times more capable, and don't suffer from attrition rates of 30%-40% that dominate young and adolescent industries, markets and countries
Outsourcing will be an awkward thing in between. With most in the Cloud or off-shored, IT has dramatically matured in this decade and become highly standardised. The little bit that is still tailormade is kept close to the end-user, and about the only thing left the local IT does, except from keeping all the different Worlds together. Whatever is left from Outsourcing will be very short-term and services-like, nothing like the 5-10 year contracts of today
IT will mature more in the coming decade than it has in the past five ones. And that's well about time, if you ask me