Transition and Transformation or Transformation and Transition

Not having blogged for a long time, I managed to get a few spare moments on the bus ride home and tried to use it for sharing my thoughts; so here we go….please note these represent my personal views and not of my organization.

For the past couple of years I have been involved in number of Business Transformations (that has involved some form of Shared Services) and Technology outsourcing through Managed Services. In both these instances I have seen stakeholders grapple with the above question of should they transform to standardized processes and then transition or transition it into a controlled environment and then transform it within that environment.

What I have seen in traditional outsourcing or BPO models is that the vendors will come in and promise standardized processes and then transition the current environment into their control. They will then try and attempt to transform the client's processes to standardized way of working within that environment. They do manage to offer some savings through labor arbitrage in the first couple of months but the quality of service takes a beating.

Couple of factors do work against the vendors favor as the customer on the client side is still used to the high touch, low process adherence and high tacit knowledge kind of service. After taking couple of beating either the vendor reverts to what the client wants or beats the client into submission and force them to accept the low quality of service (BTW all these observations are anecdotal and not based on any factual data). Both way efficiency gains promised through adoption of standard services evaporate and neither party wins. As the client also compensates on their end by adding more resources and any gains from labor arbitrage quickly disappear. After a few years of difficult marriage they decide to call a divorce and go to find other partners and the journey starts all over again.

Recently a new kid on the block called "anything as a Service" is trying to change the game. I am talking about true "as a service" players who offer commoditized and standardized Easily Repeatable Processes (ERP J) run on commodity infrastructure leveraged on a global scale (BTW I am not talking about cloud washed legacy stuff). On these platforms you are not able to change the core process but are forced to adopt them. Then in order to uses these platforms you are forced to transform your processes before you transition (or start using them). If done properly adopting "as a service" model properly can provide sustainable advantage to both the client and the vendor provided neither party blinks during transformation.

Forrester in their Tech Market outlook for Asia Pacific observed following in Australia "Cloud-enabled services are replacing traditional outsourcing contracts…Forrester has witnessed a number of clients like AMP that have started migrating out of traditional contracts and moving workloads to cloud-based services. This shift will continue to accelerate in 2014". It looks like some clients have woken up to the challenges of traditional managed services and are fast transforming their processes and transitioning them to "as a service" model.

The benefits might appear to be tantalizing, transformation is hard; trust me I have been through four of them and it was not easy. One CFO I worked with told me mid-way through the process "If I had known this was going to be this hard I would have never started the process".

Often organizations are not able to standardize completely and land somewhere in the middle (due to variety of reasons); in this scenario they need some kind of translators who can bridge the gap. Now you see the rise of another set of service providers called brokers who do the heavy lifting of the translation and hide the complexity (BTW they do lot more than this). Some call them Services Integrators…..

Changing the way IT works and provides service

I recently came across couple of articles in the economist which made me think that use of technology is becoming so pervasive in our day to day lives that people are forgetting the boundaries. One article talks about how 3D printing is changing the world of manufacturing and challenging the existing norms on factory placement (BTW this is not new technology as I had played with this technology nearly 15 years ago and back then it was called Stereolithography and HPM was the first company in Australia to use it in ager). The other talks about how software is used to predict how and when civil war or unrest can happen.

Both these cases show a world that requires a new breed of people who can walk the grey area between Business and IT comfortably. A breed that can comfortably have the discussion with senior business stakeholders about revenue leakage through not invoking CPI increases in the contract. And then turn around to work with technologist to identify solutions that can scan existing contracts to extract metadata related to CPI increases and then integrate the same with customer information in CRM.

Question then becomes are we training and creating enough of these grey zone walkers within our organisations or do we leave this to accidental outcomes of the right person at the right time for innovative examples of solution below.

Extract from Economist below:

The third industrial revolution

The digitisation of manufacturing will transform the way goods are made—and change the politics of jobs too.

THE first industrial revolution began in Britain in the late 18th century, with the mechanisation of the textile industry. Tasks previously done laboriously by hand in hundreds of weavers’ cottages were brought together in a single cotton mill, and the factory was born. The second industrial revolution came in the early 20th century, when Henry Ford mastered the moving assembly line and ushered in the age of mass production. The first two industrial revolutions made people richer and more urban. Now a third revolution is under way. Manufacturing is going digital. As this week’s special report argues, this could change not just business, but much else besides.

A number of remarkable technologies are converging: clever software, novel materials, more dexterous robots, new processes (notably three-dimensional printing) and a whole range of web-based services. The factory of the past was based on cranking out zillions of identical products: Ford famously said that car-buyers could have any colour they liked, as long as it was black. But the cost of producing much smaller batches of a wider variety, with each product tailored precisely to each customer’s whims, is falling. The factory of the future will focus on mass customisation—and may look more like those weavers’ cottages than Ford’s assembly line.

The science of civil war What makes heroic strife

FOR the past decade or so, generals commanding the world’s most advanced armies have been able to rely on accurate forecasts of the outcomes of conventional battles. Given data on weather and terrain, and the combatants’ numbers, weaponry, positions, training and level of morale, computer programs such as the Tactical Numerical Deterministic Model, designed by the Dupuy Institute in Washington, DC, can predict who will win, how quickly and with how many casualties.

Guerrilla warfare, however, is harder to model than open battle of this sort, and the civil insurrection that often precedes it is harder still. Which, from the generals’ point of view, is a pity, because such conflict is the dominant form of strife these days. The reason for the difficulty is that the fuel of popular uprisings is not hardware, but social factors of a type that computer programmers find it difficult to capture in their algorithms. Analysing the emotional temperature of postings on Facebook and Twitter, or the telephone traffic between groups of villages, is always going to be a harder task than analysing physics-based data like a tank’s firing range or an army’s stocks of ammunition and fuel.

Harder, but not impossible. For in the war-games rooms and think-tanks of the rich world’s military powers, bright minds are working on the problem of how to model insurrection and irregular warfare. Slowly but surely they are succeeding, and in the process they are helping politicians and armies to a better understanding of the nature of rebellion.

Mike Walker's Blog: Gartner 2010 Hype Cycle for Enterprise Architecture

 

Gartner 2010 Hype Cycle for Enterprise Architecture

Recently Gartner released the 2010 Hype Cycle for Enterprise Architecture (EA).  It's an interesting report. I'm not sure if there are really any surprises here but it worth looking at the macro themes of the report.

You can find additional resources here:

• Full Article: http://www.gartner.com/DisplayDocument?ref=clientFriendlyUrl&id=1402513 
• Press Release: http://www.gartner.com/it/page.jsp?id=1417513

Source: Gartner July 2010

What the report reveals is a set of macro themes for Enterprise Architecture.

• Traditional Enterprise Architecture that is technology focused and driven has become mainstream.
• A fundamental shift in the architecture community from IT Architecture to true Enterprise Architecture where Business Architecture is a first class citizen. EA is past the hype of the standard lip service of "We align IT with Business" and we are actually doing it. 
• Business focused EA that is executed through Enterprise Business Architecture (EBA), Business Process Management (BPM), Capability analysis and modeling, and EA Performance Management
• Frameworks are not as mature as they could be. This capability for EA is estimated by Gartner to be 10+ years out until productivity is realized. As you have heard from me in past posts and articles, I believe there is a level of pragmatism that is lost on the EA Tool providers. If they nail that, they will shorten that time to productivity significantly. 
• While there is mainstream adoption of Enterprise Architecture, the maturity level is still low. This is shown in the Hype Cycle survey it stated that 73% of EA organizations aspire to be "mature". Does this mean that those 73% are not mature?

Gartner has published the following abstract to the EA Hype Cycle

"The artificial walls between business and IT are crashing down, and EA is the bridge to integrate business and IT," said Philip Allega, Research Vice President, Gartner. "EA's original promise was its ability to provide future safe guidance given the desires and vision of an organisation's senior leadership team. As IT roles shift away from technology management to enterprise management, EA is suited to bring clarity to these blurred boundaries, and, by 2015, increased adoption of EA processes and uses by business will further IT's alignment with the organisation's culture, future-state vision and delivery of business value outcomes."

Early-generation EA, situated on the right side of the Hype Cycle, is marked by long-standing and well-practiced approaches such as enterprise technology architecture (ETA) and architecture assurance that have been supported by traditional and federated approaches to EA. While these practices help to direct tactical IT operations, they are often supported without a business future-state vision and, as such, limit the ability for organisations to achieve and demonstrate significant business value.

"Overall, EA slipped into the Trough of Disillusionment, along with EA tools, because EA practitioners couldn't or wouldn't push EA efforts to become integrated with the business, drawing an invisible wall between the business and IT," said Allega.

As EA practitioners have become more business-focused and organisations have become more hyperconnected, new approaches of managed diversity and middle-out have emerged on the Trigger slope, forming the latest generation of EA. These disciplines are employed by end-users to try to integrate and engage with the business as a partner. One of the emerging disciplines includes a middle-out EA approach, which according to Gartner will have a transformational impact on business in the next two to five years.

"The middle-out approach enables the creation of an adaptable architecture that can help manage rapid change and enable innovation by focusing on coordination through interfaces, rather than on control through top-down standards," said Allega.

Gartner found that 73 percent of clients aspired to support "mature enterprise architecture" during the next three to five years, demonstrating that business strategy will be pervasively understood and supported within EA and across business and IT. "We predict that by 2015, the marketplace of EA practitioners will find a landscape very different from today's environment," said Betsy Burton, Research Vice President and Distinguished Analyst, Gartner.

"To prepare for 2015, EA practitioners need to ensure that EA practices are driven by a clear business vision and defined business context, and that their EA program has stabilised the practices and disciplines that are less than two years to mainstream adoption."

Mike Walker's Blog: Gartner 2010 Hype Cycle for Enterprise Architecture

48 best free software downloads from Microsoft | News | TechRadar UK

 

48 best free software downloads from Microsoft | News | TechRadar UK

An Introduction to User-Centric Enterprise Architecture

An Introduction to User-Centric Enterprise Architecture

Interesting Article I came accross when looking for what others are doing in this space.

Magic Quadrant for Application Infrastructure for Back-End Application Integration Projects

Looks like Microsoft BizTalk has finally made it into the leader quadrant; and leads by a hefty margin as well. What is interesting the Gartner commentary on the  vendors who were dropped as it certaily reflects consolidation in the market as smaller players were acquired by bigger ones.

BEA Systems: The company was acquired on 1 July 2008 by Oracle (see "Oracle's Post-BEA Middleware Road Map: Product Recommendations for Users").

Cape Clear Software: The company was acquired in February 2008 by Workday, a company offering HR applications through a SaaS model. Cape Clear's middleware technology is used by Workday in the context of its SaaS offering, but it is not sold anymore to user organizations (see "Workday Buys ESB Vendor to Offer Integration as a Service").

Iona Technologies: The company was acquired in July 2008 by Progress Software. Iona's middleware technology (Artix and Fuse) is in the process of being integrated into Progress' product lines (see "Progress Acquires Iona to Strengthen Presence in AIM Market").

PolarLake: The company refocused its strategy around offering specific integration solutions for the financial services market.

WebMethods: The company was acquired in June 2007 by Software AG. Software AG retained webMethods' products and branding.

Magic Quadrant for Application Infrastructure for Back-End Application Integration Projects

The Rise of the Machines - NYTimes.com

Op-Ed Contributor - The Rise of the Machines - NYTimes.com: "Somehow the genius quants — the best and brightest geeks Wall Street firms could buy — fed $1 trillion in subprime mortgage debt into their supercomputers, added some derivatives, massaged the arrangements with computer algorithms and — poof! — created $62 trillion in imaginary wealth. It’s not much of a stretch to imagine that all of that imaginary wealth is locked up somewhere inside the computers, and that we humans, led by the silverback males of the financial world, Ben Bernanke and Henry Paulson, are frantically beseeching the monolith for answers. Or maybe we are lost in space, with Dave the astronaut pleading, “Open the bank vault doors, Hal.”

As the current financial crisis spreads (like a computer virus) on the earth’s nervous system (the Internet), it’s worth asking if we have somehow managed to colossally outsmart ourselves using computers. After all, the Wall Street titans loved swaps and derivatives because they were totally unregulated by humans. That left nobody but the machines in charge."

Could we be the victim of another software gone horribly wrong....