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Business led integration
I’ve heard “business led integration” mentioned a few times in the last month or so, usually as part of a presentation at a conference or trade event. The idea seems to be that getting the business directly involved in our integration projects will make the projects more successful. The problem is that this seems to describe a desire from IT rather than a real solution to a problem. If the business was actually interested in integration, then they would already be involved.
Inviting business folk into our integration world might help them understand the challenges we deal with on a day-to-day basis, but this seems to have the problem the wrong way around. Or as Ron put it, there is no spoon. The business has bigger bunch of problems that they are dealing with, and what they’re worried about is that we’re going to help them solve their problems. How we do it is our problem.
In an application-centric world, justifying an integration project was always going to be hard. We’ve built our IT organisations on the assumption that they will be delivering applications into the business, and we use applications to define how we engage with the business. Each business problem is addressed by a solution, with a business case built around a (usually quite long) cause and effect chain used to connect the solution to any benefit it delivers. We’ve had some success with business led application development, but then the business cares about applications as they are the vessel for realising business logic. Integration, on the other hand, typically delivers little business value relative to the investment required. The same is true for any infrastructure project. While we might like the idea of business led integration, I’m yet to meet a business person who is interested.
As my old circuit theory lecturer said if you don’t like the problem, then change it. I think we need to change the way we engage with the business.
A few months ago I came across a brilliant blog post by Andrew McAfee. In a nutshell, he points out that we need to deliver capabilities into the business, not applications. It’s the same technology, but a different way of thinking about it.
Rather than engaging the business on the basis of delivering IT assets, we need to engage on the basis of realising the business capabilities they require. Our focus needs to shift away from the challenge of negotiating a (hopefully) complete set of requirements and then engineering a solution. Instead, our job is to take the capability and determine the technology footprint required to support it. For example, the business might be worried about improving time from sale to revenue turn on. Doing this could require creating joined-up IT support for the complete quote-to-cash business process—a project involving some integration, a little BPM, updating the employee portal, possibly upgrading the CRM application and replacing the aging provisioning solution, deploying a rules engine, and so on. Deliving the IT footprint involves a little bit of this, a little bit of that, and will deliver a clearly defined capabilty with a measurable benefit. The approach also has an obvious synergy with SOA and business-centric approaches to enterprise architecture.
We need to re-engage with the business, focusing on realizing capabilities rather instead of delivering IT assets. Projects will be defined by the capability delivered, instead of the type of technology involved (application development, integration …). This connects what the business wants (the capability) directly to the IT required to support it. The business will be interested now.
Posted by Peter Evans-Greenwood on November 29, 2006 in
Strategy
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Comments
# on November 29, 2006 4:09 AM, Andrew McAfee said:
Peter,
Thanks for the kind words. You might be interested in my recent HBR article, where I expand on the idea of IT-based capabilities. Check it out at
http://harvardbusinessonline.hbsp.harvard.edu/b02/en/common/item_detail.jhtml;jsessionid=TQ30W44TU1AQUAKRGWCB5VQBKE0YOISW?id=R0611J
# on November 29, 2006 11:12 AM, Bhaskar Mahendrakar said:
Peter,
I completely agree with the thoughts that IT and business models should colloborate and try to evolve together.
I particularly remember the P&G case where they took advantage of IT and their business units in innovating new products,Connect & Develop.
Regards
Bhaskar Mahendrakar
# on November 29, 2006 12:41 PM, Raj Jani said:
A good example of what Peter talks about can be seen in the Manufacturing sector. Over the years, best practice has evolved from supply-side engineering to demand management.
Toyota are credited with taking the concept of just-in-time manufacturing. Web-based services and SOA allows the envelope to be pushed further still as illustrated in Andy's example on Threadless.
(http://www.capgemini.com/ctoblog/2006/11/awareness_as_a_business_trait.php).
Interestingly, Andy cites Toyota as a large enterprise that has successfully applied a similar model for its Scion brand.
# on November 30, 2006 1:55 AM, Peter Evans-Greenwood said:
First off, I'd recommend the paper Andrew references. It provides a useful framework for thinking about the capabilities that IT can bring to the enterprise.
Picking up on both Raj's and Bhaskar's comments, I think these changes we're seeing in industry are really driving the need to change the way IT and business engage.
There's a general shift from supply-side to demand-driven that is causing companies like Zara, Toyota, Home Depot, Threadless et al to reinvent themselves. Where Wal*Mart created a major IT asset to optimise its supply chain, Home Depot took a different approach and stepped around the barrier of the supply chain to hand not only the supply chain, but all the stocking, store layout and pricing directly to many of their vendors, providing the vendors with a direct feed on sales. Home Depot has significantly reduced the cost of what they do while increasing the number of sales per item in their stores above the level from the previous level when they did it themselves.
Companies such as Home Deport are ignoring the old rules, refining their understanding of what they do while working closely with customers, partners and even competitors to create more agile, efficient and profitable operations. These companies are akin to the mashups we see on the internet, pulling together data and functionality from their environment to create something new, while owning very little themselves. They're destroying the barriers between departments and other organisations as they reorganise around new principles. The incredible rate of innovation this enables will make it hard to compete with them, as they will move and innovate so quickly that even maintaining a fast-follower strategy will be challenging.
I think we've only seen the tip of the iceberg though. The new world is distributed and federated, and an asset-centric approach to IT—forged in the central data centres of old—doesn’t work in this new environment. I've been thinking for a while about how to deliver these business mashups in an enterprise environment; the catalyst I needed was reading Andrew's blog entry referenced in the original post. If we want to realise the full potential of this approach then we need to reorganise enterprise IT around similar principles, moving from a supply-driven, asset-centric approach to focus on delivering clearly defined capabilities demanded by the business.
# on December 11, 2006 7:22 PM, Vijeesh Papulli said:
The sentence 'reorganise enterprise IT around similar principles, moving from a supply-driven, asset-centric approach to focus on delivering clearly defined capabilities demanded by the business' and what I read about the next wave in outsourcing (Also called Outsourcing 2.0) has so much in common. We can actually see outsourcing service providers scheming to do the same. Factors like cost and skills are all getting flattened guess it is only value delivered that would be the differentiating factor between the Good, Bad and the Ugly!