CIO-Reinvented Blog - By Prashanth Rai

Leo's Key Note - Takeaways - Sapphire09

Central Theme - How SAP enables clarity?

Business Suite 7 provides the solid foundation. (Integrated processes - no fragmentation , SOA - Completed roadmap in 2007 - 2800 solutions) Thanks to Henning Kaggerman

Enables to build some of your custom process - Flexibility - SAP Business process management tools - Consume innovation in cheapest, fastest way possible.

Suite Support goes on till 2015

Enabling Clarity of decision making - Clarity anticipates risk

• Business suite + Business Objects portfolio, Closed loop - Strategy to Execution.
• Not limited to the large companies only, SAP Best practices for BI - Integrated with All in One.
• How this impacts Risk Management? - Takes a dig at banks who brought together mathematicians + technology, the problem was the lack of holistic view. One survivor managed relatively better - Goldman Sachs - Risk focus / Global Risk Committee - Right information, at the right time for the right people.
• Risk is part of every industry - it is our responsibility to manage risk.

Value of SAP enterprise support services - Comprehensive support to reduce the overall TCO. 2 Weeks ago along with SUGEN will provide KPI's - KPI index - Business Continuity, Business Process process performance, Protection of Investment & TCO. Committed to a 30% improvement by 2012

Ian Kimble - Insurance Company Example - Pretty neat mobile application used.

Sustainability - Perceived unlimited resources ended, Sustainability strategy - Economic, Social, Environmental risks management. Maximize your "Triple bottom line" - Don't have to wait for Better Place. IT industry cause 2% of the Global Green house gases. Industries first ever Comprehensive sustainability Map - every relevant business process sustainable. Talks a little bit about smart grids on the utility industry site. Sustainability Performance management -reporting / benchmarking - Acquisition - CLEAR STANDARDS.

Ian Kimble - Clear Standards Demo.

Fundamental Change in Customer expectation both from a user point of view and from a buyer POV. Paradigms shifts in Technology cost & Availability - Virtualization, Cloud (Private Clouds) - Coming to us. Flexible deployment models - On premise / On demand combination of the two. Another big trend - Mobile / Miniaturization of transactions. Moving to a digital enterprise from IT enable organization. So huger amount of data - In memory DB's and Real time analytics.

Launch of SAP Business Objects Explorer Software. - With explorer, executives could get answers in milliseconds...brand profitability, customer buying patterns...this could change the way decisions are made" Steve Merry, Sara Lee CIO.

Demo by Ian Kimble - Insurance Company
Natural language search - Polestar + BIA

One Demand Offerings is a key element of the over all SAP strategy - that is a welcome change
Currently Available:

1. CRM
2. Strategic sourcing
3. BI
4. Carbon management

Soon to be launched

1. HCM
2. Expense management

SME - BBD  Business By Design - Clear rumors - Is on display on the show - Live by Design system - Well that's it.

Back to the Timeless software theme - ready for the future. Demo of Timeless software - Collaborative decision making.

Key components of SAP's Clear Strategy

1. Stable Core
2. Best foundation for intelligence platform
3. business process management
4. on premise on demand
5. web20
6. timeless software
7. sustainable ways

Tags: sapphire09 - sap - leo+apotheker - keynote - Orlando

Prashanth Rai

Enterprise Cloud Adoption

I was thinking of something appropriate to write for my first blog back, so I thought I will start with something that has been top of mind for some time now. "how will enterprises adopt cloud computing? " . And I am sure there is no simple or there isn't one correct answer to it.But I figured there are a set of factors that impact the choices / path that an enterprise ends up taking. So what are these factors? Below is an initial list of things that I could think of, I am sure there are many more, please add.

1. Maturity of IT department in the enterprise - Architecture,Structure,Process etc
2. The management's view of the IT department / CIO's place in the Management team / Political will/clout of the IT Department
3. Current state of investment in inhouse IT Resources/ infrastructure & investment payback period
4. IT Resources,Utilization levels / monitoring
5. Understanding of core / context IT systems - Standardization of systems / processes
6. IT Internal Staff Numbers/ Volume / Types of activities / roles they play
7. Existing Outsourcing / Offshoring operations/Contracts
8. Pressure to reduce cost / need to avoid capital expenditures
9. Willingness of the Management team to be innovators

These factors in varying degree's impact the decisions organizations take in adopting the "Cloud" or not. So I was wondering what could be a typical road map that organizations will adopt as they move towards the cloud, so below is a graphic with the first stab at it. In this approach I haven't factored in the private cloud option, that I will cover later.

This is only indicative, different organizations are probably going to adopt it very differently or some leading vendors will help them leapfrog further up the value chain. Please share your thoughts on this.

Tags: cloud - cloud+computing - enterprise - aws+amazon

Prashanth Rai

(Cross posted at the bti.typepad.com)

Services, The Very Critical Part of the On Demand Ecosystem - Appirio

Yesterday I had a great conversation with one of the founders of Appirio, a new age services organization founded in 2006. They are an 80-person company with an additional 20 people offshore through a partner. Their original investors include Salesforce.com along with a couple of angels. More recently Sequoia capital invested in them.

Appirio is a unique company for a couple of reasons: they are a Services & Product organization, rolled up into one and are completely focused on the On Demand space.

Their philosophy is well documented and covered in their explanation of "Services 2.0":

"This new breed of specialized firms fully embrace SaaS with complementary business and technology consulting, productized intellectual property, and support services via flexible social networks will be disruptive to traditional Global Systems Integrators (GSI)- such as Accenture, IBM, Cap Gemini, and Infosys – who are just as addicted as the ISVs themselves to revenue streams based on the on-premise install base."

This whole Services 2.0 theme is very interesting. There has been, for what now seems to be forever, a conversation among the Services 1.0 players on how to break the direct relationship between the number of bodies and their revenue numbers. The current model is steeped in the FTE / Body count business. Many of them are trying to get some IP into play particularly for aspects that are often repeated amongst client.

In this very scenario Appirio has been able to execute on the vision, creating products/solutions/IP like Connectors between Salesforce-Google, Salesforce-Facebook & Salesforce-Amazon etc. The very reasons that On Demand is great for customers makes it invaluable for IP/product developers. They only have to focus on the solution and not worry about the infrastructure / software set up... etc. - i.e. all the non value added tasks.  (A question that arises here is that though this does enable companies to build and take to market solutions/products faster, at the same time it reduces the barrier of entry for other players to come and create something similar and undercut on cost...)

The whole difference between Services 1.0 & 2.0 companies is captured well in the table they provided (via Sandhill.com):

Business Lines

Currently Appirio is focused on the services side on Salesforce.com & GAPE (Google Applications for the Enterprise). On the product side they have a vertical application developed for Professional Services organizations on the Force.com platform in addition to the connectors between Salesforce-Google, Salesforce-Facebook & Salesforce-Amazon. Another offering that they have is the "Viral enterprise" which leverages Facebook specifically for recruitment... etc.

They currently have around 1600 customers for their solutions / products business and another 120 enterprise customers on the services side.

Areas that they might look at expanding into in the future are - Amazon,Adobe, Facebook, Workday, Intact, Google App Engine...etc. Mostly solutions that meet their fundamental deicing as defined in the Services 2.0 piece.

Some Customer Success Stories:

1. Large Enterprise - Qualcomm - They implemented the Salesforce Service/Support Module.
2. Medium Enterprise - Genentech - They implemented 1500 seats of Google Calendar
3. Small Enterprise - CRC Health - Developed patient intake system on the Force.com platform

Projects

Their view of projects:

• Tied to an Outcome
• Spend more time on business process/ user adoption (Parts that are more important to the end user, hence trying to make the projects more successful)
• Lower/Less investments
• Bring best practices across different client groups - Leverage packaged IP
• Duration - Short Project Cycles , each with its own justifiable delivery / ROI, typically 4 weeks - 3months
• Work with both the IT & the business, Business alone will not be able to execute they need the support of the IT team
  

Suggestion to CIOs

Get started now! Do a portfolio analysis of your current application infrastructure & framework , identify some of the needs of the future and analyze the same to see which of these makes sense to be moved to an "On Demand" model. And move it now.

| View | Upload your own

I am a believer

I believe in both the promise of "On Demand" and the need for integrators / SI's with a completely new view to IT & Innovation. I also believe in the model of delivering results and leveraging technology to provide value to the customer. On the On Demand model, I don't think it is suited for all customer use cases and don't think all applications will be on an public on demand model. Its going to a hybrid state , with loosely connected systems and easy to use information aggregation / processing / mash up capabilities based delivery tools.

Tags: cio - smb. large+enterprise - services2.0 - appirio - saas - on+demand - paas - gape - salesforce.com - crm

(Cross-posted from CloudAve)

Prashanth Rai

SAP Teched Keynote - Zia & Leo (Live Blogged)

Zia Yusuf, kicks off the session.

Special reference to contributors and mentors

1. 470 xabytes of information
2. 1.9 billion trade every 60 mins
3. 50% worlds business transactions touch an SAP system with 75000 customers
4. 1000 people join the SAP community network everyday, 12th largest in the EU
5. 52 countries collab in teched
6. 4500 people attending SAP teched

New initiative - Collboration withh innocentive , open innovation market place. - SAP innovation and technology pavilion. As of Sep22 1002 onboard - Democratization of innovation

 - Leo's turn now

First time addressing the TechEd audience, business and IT dont speak the same language.

Story about of hot air ballon and lost in fog joke, IT - perfectly accurate and completly useless answer, Business - You have no clue where you are and where you are going and you are blaming IT.

Customers to connect , collaborate , co-innovate

Overall perspective.

Transformational Forces

• Good old slides on business network ( Moving from Value Chain to Business network) - Network Shared risk - Better management risk
• Business Network - Relationship driven / Corporate boundaries have beomce fluid.
• Consumerization
• Need the IT environment to manage / support the Business Network
• Asian Paints (Case Study)
  • Paint a heavily commoditised industry
  • Extend the business model - Service Provider
  • Transformation to an End to End service company
  • Asian Paints Web / Phone based collaboration - Ties up with the painter / manages paint / manages payments etc
  • External Painters ranked
  • 400000 houses in first year
  • 25% referred other customers
  • Asian paints orchestrator of the network
  • SAP Infrastrcture for both Paint an Service business
  • ERP / CRM - Composite Apps
  • SMS interface
  • Business Int Analytics to benchmark painter
  • Predictive for future requirements
  • IT Requirements that are key to drive this transformations - Efficiency , Flexibility & Insight (Across the network)

User experience a key focus area of investment

• Harmonized UI - Standardized
• Enterprise search - search box for all enterprise applications
• Atlantic - Duet for Lotus

Weekend upgrade - Enhancement Packages (Applying and Enhancement pack is simpler than a support pack) - Entire suite two enhancement pack a year. Solution Manager  - Business Process change analyzer - Study Impact of enhancement pack. Solution Manager is the corner stone for enterprise support. Solution manager manages the custom code also. Truly harmonized end to end business processes.

Enterprise support - Is not useful - Quote saying "That statement alone makes the difference"

Horizontal Solutions address the functionality needs , but doesnt manage the end to end business view / business use case.

Professional Certification for Business Process Experts  ( Check out BPX community)

Customer Case Study : Hugo Boss AG

• 2003 fundamental shift in Fashion
• Versatile - Fashion truly unpredictable
• Bigger Varieties of brands
• Move from a push model to a pull model
• Standardized the processes
• Connected the network to the fashion manufacturers (flat files / paper)
• Collect and Analyze the POS data at all possible points - Open Architecture BI , Feedback on design trends, Supply chain etc.
• Moved from 4 collections to 52, with one week delivery windows - Flexible architecture.

Closed Loop Strategy to Execution

• Strategy
• Decision
• Monitoring
• Process Requirement
• process Execution
• Events
• Insight

BI XY3 - BI for the Masses

GRC - Composite Apss - Along with Cisco - Governance at Network level

Ian Kimble Demo1 Business Objects 

Demo2 - Galaxy

Ecosystem

Talks about the Innovation Pavillion

SAP Eco hub - Online Solution Market Place (Both SAP and Partner Solution ) - Wonder when the are going to come up with the Onlie Services Market place powered by the community.

Ian Kimble - Demo Eco Hub

View of the Architecture for the portfolio

Request/ Suggestion to Upgrade to ERP 6.0

Tags: sap - sapteched - sapteched08 - keynote - liveblogged

Prashanth Rai

Customer financing for Infor Customers by IBM

Infor recently announced a new financing relationship with IBM Global Financing the largest IT financier in the world. The new agreement will enable Infor’s customers around the world to finance products from Infor’s entire line of enterprise business software, as well as complementary hardware and services, through IBM Global Financing. Under the terms of the agreement, Infor’s channel partners can also offer financing to their customers through IBM Global Financing.

Are we going to see more from where this came from ?

“Most organizations today walk a narrow line between preserving day-to-day cash flow and making fiscally prudent investments to improve their business,” said Robin Pederson, chief operating officer, Infor. “The expansion of our relationship with IBM will help to make this decision easier.”

The new financing relationship provides many benefits to Infor's customers. For example, organizations can move forward with their technology initiatives while spreading up-front payments over time, conserving cash for other investments. Companies can also put technology to work immediately to establish a stronger competitive edge, rather than delaying until the next budget cycle.

Excerpts from the Forrester Blog

This program provides Infor's customers with:

• Access to a line of credit for key tech investments. Similar to other IGF deals, the program includes more than just Infor's entire line of business software. Other eligible items include software, services, hardware, and maintenance.
• Flexible payment options. Customers can spread traditional up-front payments over time. Flexible payment plans for loans or lease extend up to 60 months. Interest rates are country specific.

Key facts about the deal:

• Geographies: All
• Products: All products, No IBM hardware or software required
• Length of program: Up to 5 years, typically 24 to 36 months
• Interest rates: Country specific
• Partner eligibility: Open to all partners
• Program inclusion: software, services, hardware, and maintenance.

The bottom line.
Vendor-led financing options and payment alternatives provide users with opportunities to avoid up front payments and efficiently deploy capital. While financing options do not address the issues of recurring costs for support, upgrade, and hardware infrastructure, the bundling of professional services, hardware, and other related software offerings provide a compelling business case to choose one preferred IT vendor while deferring capital outlays. Financing will continue to prove to be the game changer in this consolidating and competitive software market.

Tags: it - financing - ibm - infor - erp - infrastructure - future

Prashanth Rai

Interesting reads of the day!

Interesting articles or items read today:

A Recent Goldman Sachs report sees growth in IT spending dropping from 7% last year to 5% this year...and near steady rock bottom levels at the end of the year.  That says declining budget GROWTH (vs. declining budgets). Major spending areas?  Cost cutting, vitalization, server consolidation, application integration, and data center consolidation….sounds like a theme going. Once these Y2K like efforts are done…watch out.

Source: 1

Your Next outsourcing destination Ghana - Ambassadors from 41 countries recently toured California. Among the reasons: to learn how the U.S. high-tech sector operates and to make a pitch for their home countries as sources of tech talent.

Source: 2

Tech Hiring still on the rise - In June, the number of information-technology pros employed in the U.S. reached 3,907,800–an all-time high, according to the National Association of Computer Consultant Businesses, an industry group for tech-consulting companies. Each month, the NACCB scours through Bureau of Labor Statistics data to find IT-related jobs. In June, the number of these jobs only increased by 1,700, but that was enough to set a new record. For the year, U.S. businesses have added almost 90,000 IT pros, which is a lot, considering that the U.S. has lost 438,000 jobs over the same period. The gains are a reminder that while growth in IT spending may be slower than in past years many research firms have revised downward their forecasts for corporate tech spending recently the sector is still growing.

Source: 3

Technology Diffusion - How long are technology adoption lags? Can cross-country differences in technology adoption lags account for a significant fraction of cross-country GDP disparities? Diego Comin of Harvard Business School and Bart Hobijn of the Federal Reserve Bank of New York develop a new benchmark to understand the diffusion process of individual technologies and the consequences that this has for aggregate growth. This benchmark provides a rationale for the evolution of diffusion measures that include how many units of technology each adopter has adopted in addition to the traditional extensive margin. The model is estimated to obtain measures of adoption lags for 15 technologies in 166 countries. Key concepts include:

• Adoption lags are large. On average, countries have adopted technologies 47 years after their invention.
• There is substantial variation across technologies and countries. 
• Over the past two centuries, newer technologies have been adopted faster than old ones. 
• The remarkable development records of Japan between 1870 and 1970 and of the so-called East Asian Tigers in the second half of the 20th century all coincided with a catch-up in the range of technologies used with respect to industrialized countries. 
• Adoption lags account for at least 25 percent of cross-country per capita income differences.

Source: 4 

India IT Export to Middle East - India’s IT exports to the Middle East are expected to cross $1.30 billion in 2008, an increase of 30% compared to $1 billion last year, Electronics and Computer Software Export Promotion Council of India (ESC) said. According to ESC, an autonomous body under the Indian Ministry of Communications and IT, Indian IT exports are growing at more than 30% annually and are expected to cross $50 billion this year and touch $100 billion by 2012. “IT exports from India to the Middle East, particularly to the UAE, have increased substantially in recent years. We see huge potential for further growth as ESC is devising new strategies to expand its market-share in the region,” ESC regional director for the Middle East and UAE Kamal Vachani said.

Source: 5

Tags: Outsourcing - offshoring - India - technology - hiring - IT - Ghana

Prashanth

SaaS See Saw!!!

SaaS Applications/Companies in the "enterprise space" is an area of growing interest both in the board room and the CIO's office. SaaS has slowly begun eating into enterprise IT budgets, and now accounts for about $4.2B in spending, and growing at a speed of 22.3%.

Though this sounds primarily positive but on closer review the signals received are more conflicting, on the one side we hear a lot of the successes and converts of enterprises moving down the path. On the other side we hear the old concerns of privacy, security, risk , the overall cost equation from a customer point of view when looked at from a 5 year window point of view etc which is leading to reluctance from the CIO's.

Another concern that seems to be exploded in the recent past is the ability for the SaaS vendors to exist profitably and whether the current prices offered by these SaaS vendors are sustainable. This topic has become hot after the recent earning call of SAP and the comments around their BBD - Business By Design (SaaS delivered ERP - for the SME).

Some thinking around the reason for this problem:

SaaS may well prove to be less profitable than many software companies, pundits and investors anticipate. It’s certainly the case today. As noted earlier, the median TTM EBITDA margin of the 18 public companies in the SEG SaaS index was 6.1%, considerably lower than the 11.2% median TTM multiple of the 211 publicly traded software companies comprising the SEG Software Index. In fairness, the margins should improve as certain one-time expenses are absorbed and subscription renewals kick in.But it’s the pricing side of the equation that may ultimately prove to be the greatest deterrent for large enterprise SaaS adoption. As SaaS providers begin to fully grasp their higher than anticipated implementation, integration and infrastructure expenses, and as SaaS grows market share among large enterprises, it’s a safe bet SaaS providers will revisit their pricing models – and bite the hand that feeds them.

What is SAP Saying on BBD?

• The SAP Business ByDesign 2008 debut will focus on six countries, where all the current productive early customers are based. Additional country rollouts in 2009.
• It is expected to take around 12 months to 18 months longer than the original 2010 target to reach the SAP Business ByDesign $1 billion revenue and 10,000 customer potential.
• SAP said “SAP Business ByDesign innovations and technologies for the existing solutions and this will contribute significantly to the overall revenues of SAP in 2010.”
• BusinessByDesign will have significantly less than 1,000 customers in 2008.

Here is a comment from the co-CEO explain the reasoning

SAP co-CEO Leo Apotheker says that Business ByDesign, the application giant’s high-profile software as a service product, was delayed because of its total cost of ownership for the company.

“We’ve announced a price point and now we’re working backwards,” says Apotheker.

That’s a fancy way of saying SAP hasn’t figured out how to make money at its $149 per user per month price point.

This seems to be more SAP trying not to give jitters to the investor community / wall street than anything else, Yes they have some technical /architectural /economic model things (all are connected) to work out but alls not over for BBD or SaaS as the doomsayers would like you to believe.

But on the brighter side there are still a lot of positive indicators,

Worldwide total software revenue for software as a service (SaaS) within the enterprise software markets is projected to surpass $5.1 billion in 2007, a 21 percent increase from 2006 revenue ($4.2 billion), according to Gartner, Inc. The market is poised for strong growth through 2011, when worldwide revenue will reach $11.5 billion.

An recent survey of 850 enterprise users by McKinsey & Co. and the Sandhill Group shows that SaaS has moved into the mainstream. Respondents identified SaaS as the most important technology trend influencing their companies, with 74 percent of enterprise customers saying they are “favorably disposed to adopting SaaS platforms.”

SaaS moves from 37 to 18 as an enterprise IT spending priority. It would seem, and many industry pundits would have you believe, SaaS has won the day among large enterprises. According to the October 10, 2007 Goldman Sachs IT Spending Survey. Although SaaS had ranked 37 – dead last – in GS’ May 16 survey, it had moved halfway up the list to 18 in only a few months.

Thoughts at this time - SaaS is here to stay, As a model there were a few things wrong about the economics of ASP and it failed in its new avatar SaaS it might still have some problems, but I don’t believe they are big enough to have CIO's side track it completely. CIO's will continue to be cautious and we will see SaaS making more in roads into the enterprise, but primarily in the periphery and another important thing to watch out for is how the Platform As A Service movement plays out.

Source: 1, 2, 3

Tags: bbd - business+bydesign - a1s - sap - sme - saas - on+demand

Prashanth Rai

SAP Raids the EPM/CPM Space....Oracle/Hyperion Losing ground?

Some time back I had a post up on SAP's "CPM Acceleration Program" which was a program focused on ridding Oracle / Hyperion from the sites that are primarily SAP. One of the key result this program was having was a replacement each day.

Now in a recent press release SAP highlighted some of the wins they are having in the EPM/CPM space.

SAP reported that over the past several months more than 100 customers worldwide purchased SAP® solutions for enterprise performance management with the intention to replace Hyperion solutions from Oracle. Among those customers are: Ballast Nedam N.V., Foundation Coal, KPN Telecom B.V., Rezidor SAS, Sandvik AB, Skandia Informasjonsteknologi AS and TPG Headoffice BV.

By the looks of it looks like Oracle's surround SAP strategy isn't working as well. Though SAP's new product releases and acquisition might have something to do with it. I believe that a lot of it has been brought on by Oracle themselves. They are not providing current and future customers clarity on the direction that they are going. There are so many directions indicated out there, that I don't think even oracle employees are clear about it. Not sure how much the 100 customer loss is going to hurt Oracle, but if they don't get a clear coherent product strategy /road map out fast there are going to be bigger losses down the line.

Tags: oracle - Hyperion - EPM - CPM - sap - BO

Prashanth Rai

Rationalization - Start with putting the Business First!

In continuation to an earlier post, where I focused on the need for Rationalization in the IT industry, In the next few posts I am going to touch upon some of the aspects / approaches that I believe will bring about the required change. This is a first post in that series.

Today across the whole IT Ecosystem the focus seems to be always about the technology/ code/version/contractors etc, never are the conversations or focus really about the business and its needs /objectives priorities. IT and Business seem to be on two different planets. Business talks about getting newer /better /cost effective services/products delivered to the customer faster while IT Departments are wondering which version of ERP needs to be implemented or should the which vendor to take 3 XXX resources from. And then there are the IT Service providers who spend bulk of the time thinking if they should  be talking about data center consolidation or offshoring a the support desk to reduce cost etc. IT Departments and the service providers do need to think or work / market these initiatives/areas, but they shouldn't forget that these initiatives sometimes (very few times) really make a sizable impact on the bottom line of the company and no impact at all on the topline.

The IT ecosystem needs to get out of the world they are living in and move to the same planet as the business people and start thinking of the business and their objectives as the only priority.

But I think this is easier said then done and lot of things have to fundamentally change in the way IT is organized to make this happen. But nothing is more important than executive commitment. Not the CIO, the CEO and the business leaders will need to be IT savvy so that they can push their organizations in every possible way to leverage IT capabilities to drive competitive advantage in their business, they shouldn't approach IT as help/enabler to just run the business, but a factor that can drive exciting change in the business.

Few companies have very visibly used IT as a competitive differentiator in the way they do business, a oft repeated example is WALMART. But how many other companies have been able to - "Embed IT into the Business Process - Driving differentiation / competitive advantage. Does IT even have this objective on the Radar?

This is a two way street business leaders/teams need to stop looking at IT as a group you go to once the business / processes etc are defined so that IT team can enable with tools to help it to run smoothly. But should involve IT in the phases of strategic planning and idea inception phase itself to make this happen. For their share IT needs to be able get people on board who can participate on this table at this level of discussion, resources who are able to speak the language of business along with the IT relevant TLA's. The focus of this team(Business Technologists) is to work directly with the business team of the company  in the development, prototyping and evaluation of innovative ideas/processes.

This needs to happen at all levels, I cant think of many organizations where the CIO is part of the strategic planning of organization. If the CIO isn't a part of this thinking /creation process - The Organization is not taking advantage IT to deliver value, Its just being looked upon as support service that enables the plans set by the business.

Tags: cio - offshore - outsource - business+technology - rationalization - IT - IT+Department - IT+Services

Prashanth Rai

Image Source: Google Images - CartoonStock

The Chinese Calendar is right - 2008 is the year of "Rat"ionalization

As the New Year effect wears off, I realized that after many plans of putting out predictions for the year to come, I still haven't gotten around to publishing them, but after thinking about it from various points of view, I realized that my strongest prediction was one which was more from a broader view of the "Information Technology" Industry as a whole.

2008 - The of year of IT Rationalization 

The more you think about it , see it , feel it  - the more you feel frustrated at the state of the Information Technology Industry. My frustration is across the board from the fundamental models which are flawed, to irrelevant outputs and abysmal delivery record. At this time this post might begin to sound like a rant , but I think there is more to it.

Though 2008 is already being touted as being the year of recession. And even though it might not be signaling the end of a "boom" period based on previous experience, that is exactly what it is. 2008 will be the year of rationalization - This is the year that the IT industry starts going down the path of being rational. Rationalization in every aspect and in every sense.

Customers (Business users - Yes they are the real customers for this industry) are dissatisfied to the extent that I think there is a prevailing sense that IT projects are irrelevant in the overall scheme of things and are at best only replacement to the paper world that existed in the last century.

I remember in one of the keynotes at the Software 200* Series of Conferences, Ray lane put up an Ad (CA's if I remember right) where the Software Sales person keeps asking the IT Manager how many licenses he wants to buy today , not listening or caring about what the customer is saying or wants or needs. That is true to every part of this industry at this time, just that the question varies, "How many bodies do you want today", "How many lines of code do you want today" , "In how many years do you want the solution" etc etc. Nobody is really focused on what the "business needs" are today. 

Why are things this way? - Well I am sure all of us can hazard a lot of guesses, but that is not important or relevant, What is important is to see/understand how the Information Technology industry as a whole (CIO's, Internal IT Departments, Software Vendors, Consultants, IT Services Vendors etc) is going to respond to this and how the world of business is going to force all these stakeholders towards RATIONALIZATION.

I see some silver linings, I see and strongly believe in the whole on demand / SaaS movement and where its going. Yes there are lot of things that still need to be fixed/ unraveled in this model and its still in its evolutionary path. But there is no doubt in my mind that it is the way of the future. When I think about this model a little more I wonder if the model of SaaS should evolve up a path where we stop looking it as Software(Bulk of Code/functionality/Module) as a Service or Application(Bulk of Code/functionality/Module) as a Service but develop BusinessService / BusinessOperation / BusinessResult As A Service (Sounds crude, but you get the point). And this can be accompanied by a composition environment which allows "MashUp's of of these Business Services" delivering the complete functionality that is required by the User/Customer. The scalability of this model and its applicability for business / mission critical operations might seem questionable and I don't know the answer. But I am rather sure that more than 80% of the operations in an enterprise can be catered to in this approach.

Once we go down this path further , there is another trend converging which is of the way we see the working approach, pattern of the Information worker of the future - Which is more and more Web2.0 based. The Google-Gen are going to be these Information Workers, their primary tools are those that are blocked in most current "CIO" governed environments. But they and their working approach will align well with the whole concept of BusinessService / BusinessOperation/ BusinessResult As A Service.

Explaining the title: As per the Chinese Calendar, 2008 is the year of the "RAT", Hence the play of the words.

Happy New Year to the Chinese, May we live in interesting times.

Prashanth Rai

Technorati Tags: cio - bsaas - boaas - braas - 2008 - rationalization - future - IT - information+technology - it+services - saas - on+demand

Image Credit: 1