In the earlier blog in this series we looked at a few business themes that will inform the future out for a decade. In this second part (and the forthcoming third part) we will look at how such business themes will recalibrate the approach to development and maintenance of IT applications, and how enterprises should prepare for this.
Consideration #1: Will IT applications exist in the future? What will be the characteristics of the IT applications of the future?
The genre of innovative revenue generating IT applications are likely to grow from strength to strength. Digital capabilities embedded within such IT applications, even today, establish beyond debate, a direct causal link to P&L impact creation, making such IT applications central to business innovation. Going forward it would imperative for most IT applications to deliver such P&L impact. In the area of enterprise IT, the answers will not be all glamorously new! This represents the opportunity for enterprise to commence their readiness journey NOW to effectively face the future. The actions also align to strengthening the basics from a business-IT perspective to deliver robust P&L impact.
The prevalence of SaaS applications makes some people proclaim them to be the future. On one hand SaaS applications dominate certain business use cases: at the edge-of-the-enterprise (e.g. CRM, Customer On-Boarding); where the network effect is important (e.g. global procurement, business model based on 3rd party interaction supported by APIs), etc. On the other hand traditional applications continue to evolve by: (i) combining distinctive & DNA elements of each enterprise, and industry best practices to thrive in the market place (implementations of Commercial Off The Shelf products reveal that on an average ~80+% of the processes and tasks are common across enterprises, at least within mainstream industries, diminishing the ROI of huge customization efforts), (ii) are becoming dynamic based on adoption of SOA, Mobile / Cloud first development approach, Agile-DevOps practices, etc. Key characteristics of an application landscape to secure the competitiveness of an enterprise are not limited to considerations of ownership patterns of on-premise or SaaS, etc. Rather effective applications of the future would ensure P&L impact as below (same pattern would apply for rejuvenation of current applications):
a) Deliver better business outcomes and ease of use: IT applications of the future should ensure smooth execution of critical customer journeys and business value chains with high levels of Straight-Through-Processing (STP) across context, channels, computing devices, etc. to deliver better business KPIs and agility accompanied by steep reduction in the price per business transaction. Depth of impact should be elevated based on value creating functionality amplified by intuitive user experience across touch screen, wearables, voice (with versatile accent and emotion recognition), holograms, augmented reality based formless computer elements, gestural computing to connect the physical world to the electronic world, and so on
b) Deliver the right insight at the right place and at the right time to deliver better outcomes: IT applications of the future should equip critical customer journeys and business value chains with consistent information and deliver the right insight at the right place and at the right time with the right level of granularity to enable effective and dynamic decision making that lifts business KPIs (based on a strong yet flexible Data Model and insightful leverage of advanced Data Management techniques)
c) Redefinition of business processes and how work is done owing to Computing advances: Business processes are defined based on inputs, enterprise DNA based way of doing things, constraints, costs, etc. Computing capabilities have already started to shift the boundary of what is possible, triggering rethinking of business processes, e.g., Complex Risk Modeling of scenarios which previously could not be computed. As a result, enterprise IT applications are increasingly entering areas where work was traditionally done in a discretionary / intuitive manner. Further progress will require design of IT applications to deliver value creating functionality and fluidity of workflow to combine: (i) judgment based human tasks and decisions in certain segments of the value chain (supported by flexible simulations to deliver the right insight at the right place and at the right time with the right level of granularity), and (ii) fully automated execution of tasks and decisions in the rest of the value chain (based on rules, Artificial Intelligence – AI). IT applications should also need to increasingly incorporate impactful AI capabilities to enable superior P&L impact, particularly as the field matures over time. Such efforts should also need to be accompanied by features for security and protection of the interests of the human race at multiple levels (science fiction-like movies depict negative relentless goal seeking tendencies amplified with technology advances, but they also capture that often the underlying trigger is negative motivation of few humans)
d) Ensure speed-to-market of compelling new business capabilities across front-mid-and-back-office: based on plug-and-play of business-IT modular components derived from business value chain insights (somewhat similar today’s Apps focused on a point functionality rather than large cover-all applications), coupled with potent Application Reference Architectures that will include certain infrastructure elements to not only accelerate speed-to-market but to also limit the use of energy based on computing effectiveness. Parametric configurability of these modular components will add flexibility to support launch of new products and services (ability to customize for each individual, n=1. This already is present in: mobile plans, insurance policies, and bank accounts). Impact of Blockchain technology is a great example that reinforces the downside in thinking that mid-and-back-office applications that appear to be ‘non-dynamic’ do not deserve attention / prioritization for agility and innovation
e) High-quality integration of the overall application landscape to make sure that the whole is greater than the sum of its parts: based on insights linked to extent of functional cohesion and decoupling; flexibility to work in different context (with varied external partners and their IT solutions, lines of business, countries, entities in space, networks, poor latency scenarios, offline, etc.)
f) Eliminate / minimize need for downstream business operations based on inherent nature of application design: eschew business operations associated with manual reconciliations, data rekeying due to lack of STP, manual ingestion of external information from paper documents, etc.
g) Correction of run-time faults to eliminate / minimize Application Maintenance effort: due to advances in Computing capabilities IT applications are increasingly working with rapid execution cycles (long running batch jobs, etc. will eventually become a thing of the past), and will have to deal with growing amount of data to develop insights, etc. Cyber Security will continue to increase the amount of attention needed. These changes in the short-term will create additional load on Application Maintenance teams. This will provide the impetus for future IT applications to be developed in a manner that is fault-tolerant / capable of effective working in a degraded mode / capable of fix-before-fail correction (based on deep monitoring, self-diagnostics to drive fault isolation, self-triage of resolutions-tests of fixes, etc.). All of this will ensure that revenue leaks are arrested in the execution of critical business process, customer goodwill is enhanced and user experience is elevated. Further application enhancements, will be driven based on run-time insights of faults (that emanate from application design and engineering flaws). In-built Virtual Assistants will be commonplace to support users with in-context, Just-in-Time FAQs and How-Tos?
Such IT applications and practices will blur the lines between business and IT to accelerate the convergence of shadow IT with regular IT since applications and associated maintenance practices will be highly user centric and friendly. IT will no longer be viewed as “slow and no”. These practices will also help realize a NoOps paradigm, i.e., elimination / minimization of the need for Business Operations and Application Maintenance (specifically covered in points, f and g). The few remaining tasks that are not eliminated are to be automated to further reduce cost and increase quality.
The above attributes are drawn from the findings and examples in Capgemini’s report titled Executive Insights on Application Landscape Management. This report also provides a comprehensive treatment on topics not covered in these blogs such as Target Operating Model, Culture, etc. Using the resources linked to this report, enterprises can also undertake a fairly quick self-assessment on the extent to which they adopt world-class performance practices.