Balancing “Inside-Out” and “Outside-In” – Key points for a CIO in a SAP HANA enabled world

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The terms “Inside-Out” and “Outside-In” are used in an IT context to explain the dynamic for acquisition and delivery of software solutions within a business. The drive of “Inside-Out” is seen as being IT focussed, centrally controlled and lacking the spark of innovation that the business is looking for. “Outside-In” is the opposite, obviously! Driven […]

The terms “Inside-Out” and “Outside-In” are used in an IT context to explain the dynamic for acquisition and delivery of software solutions within a business. The drive of “Inside-Out” is seen as being IT focussed, centrally controlled and lacking the spark of innovation that the business is looking for. “Outside-In” is the opposite, obviously! Driven by the business, and frequently seen within the context of Marketing, “Outside-In” has exploited the ability to acquire software on an As-A-Service basis thereby operating outside the traditional IT procurement processes. Just as the procurement model is innovative so is much of the software delivering creative new ways for business departments to deliver local benefits.

As you’d expect much of this software procurement has taken place around the footprint of the traditional software vendors e.g. SAP, Oracle, etc. who are well established within the IT Departments and therefore part of the “Inside-Out” environment (problem?). Whilst the challenge of the CIO is difficult enough the erosion of control facilitated by “Outside-In” software providers exasperates the situation that leads to islands of information and pockets of solutions that once established will need to be owned, managed, controlled, secured, exploited, etc. by someone but who?

For SAP-based organisations there is no need to see these areas as mutually exclusive. By considering the following key points I believe that a strategy can be created that recognises the demands of “Inside-Out” and “Outside-In” and fully exploits the technologies that an SAP HANA enabled Business Suite can deliver:

  • Learn from History – Everything goes in cycles

At the beginning of the 21st Century, maybe even slightly before, we had the concept of Maverick IT Procurement. Business departments would go out and buy Siebel, i2, Manugistics, CommerceOne, Ariba, Broadvision, etc. because their core transactional systems did not support their requirements. In time these have been consumed into the core transactional platform either through in-depth integration or replacement with more functionally rich alternatives from the transactional system vendor. The concept of “Outside-In” is the same and so:

1. It is a natural part of the development of IT systems; and
2. The need for cost-effective, integrated business processes will drive the same follow-up behaviour.

The key thing is to accept that the situation will occur, learn from history and seek to drive more quickly to an integrated business platform again.

  • Know what you have – don’t believe the FUD

Everyone will have an opinion that supports their desired outcome. Take the situation of SAP, for example. As the scope of the solution has increased, so has the number of competitors but the opinions of SAP that competitors have is consistent; it only does ERP therefore you need our technologies. Now, are the competitors the best people to give advice on SAP’s applicability to requirements? Probably not.

At Capgemini we’ve done some research recently specifically in the area of Digital Transformation to see how SAP supports the diverse requirements. Using the Architecture Framework of our Immediate Offer we’ve mapped the SAP components to see what is available and there is complete coverage. That’s not the kind of information that SAP competitors want to get out but it is important to recognise that not only does new software appear but existing software evolves and innovates too.

Therefore ensure that you know what you have. Dealing with multiple vendors is an overhead that many cannot afford. “Sweat your assets” is an “Inside-Out” mantra but when your “Outside-In” requirements can be satisfied by “Inside-Out” software why would you look elsewhere?

  • Keep flexible and use appropriate methods

There is not only one way to implement software, Agile and Waterfall are approaches that I come across most often. To have a strategy that balances both “Inside-Out” and “Outside-In” you must be able to do both.

Waterfall methods have successfully supported Business Process implementations over many years where structure and planning is required to deliver a successful outcome over the whole organisation. Agile, or RAD, methods have been more successful when focussed on smaller scopes such as web development or BI development.

SAP is not just a single piece of software and the selection of the most appropriate implementation method will be critical to achieving the expected outcome. Country roll-outs and Business Process implementations will tend towards the waterfall type approach where Capgemini’s iSAP method and SAP’s Accelerated SAP lie whereas Portal development or HANA deployments or Cloud solution deployments will be more Agile in nature.

The key point is that many SAP teams only know how to do waterfall and will often apply this to the wrong type of project. To be successful consider the best approach based on the project.

  • Move forward on multiple fronts, incrementally

Frequently I speak to customers and when I ask why such-and-such a piece of software is being used in an area that SAP could support it is frequently because the SAP team was all busy on a single project, or a small number of projects, and therefore another  team was built to fill in the gap.

Also, I often see the traditional scope and structure of client SAP organisations to be very much focussed around the pillars of R/3 (not even ERP) with cost pressures that lead to very significant bandwidth constraints. This leads to the cost of SAP being kept low but the total cost of IT ownership spiralling as platform, integration, software, resources etc. costs rise with other software and economies of scale not being exploited.

Maintaining an open mind and a flexible portfolio approach is key to ensuring that all opportunities are exploited effectively without allowing future issues to arise.

  • Know your business and focus on business benefits

Finally the big difference between either Maverick IT Procurement or “Outside-In” and the alternative is the focus on the business and benefits.

The “Inside-Out” approach tends to focus on “I have X software how can I use it more?” which is wrong without consideration of requirements. All our focuses should be to say what does my customer wants and how can I satisfy those requirements using the most appropriate tools and methods that I have at my disposal; we should always start with value generation and requirements understanding before we progress to solutioning. Clearly we must understand what our existing software tools can do but not with the view of pushing non-value adding solutions that deliver no benefit.

So, the whole area of balancing “Inside-Out” and “Outside-In” is very dynamic and develops continuously as business requirements and IT solutions develop. In an SAP HANA enabled world it is important to recognise that both exist drivers are important and can be addressed with SAP technologies as long as we understand our technologies and use the correct approaches to support the business.

Ultimately a balanced approach exploiting existing technologies in the most effective way has got to be the best outcome to strive for.

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