Old wine in new bottles
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A clear set of technologies is heading company software agendas. But to what extent do they represent genuine business opportunity?
Cloud computing, software-as-a-service (SaaS), service-oriented architecture (SOA), virtualisation – all are being flaunted as the foundations for the future of software.
But Neil Ward-Dutton, research director and co-founder of IT sector advisory firm Macehiter Ward-Dutton (MWD), isn’t convinced that these concepts are as new as they are purported to be. “At a high level, these were all concepts [introduced] 30 years ago,” he says. “The concepts have stayed the same, but the background has changed.”
Virtualisation has been part of the IBM mainframe environment since 1972, for example, and the key concepts of SOA were encapsulated in the Object Management Group’s Common Object Request Broker Architecture in the early 1990s.
While the technology in some cases might resemble “old wine in new bottles”, for Ward-Dutton the changes under way represent more of a business challenge than a technological one. And three distinct elements predominate: the scale of change, the sheer speed of change and the shifting regulatory environment.
“We’ve gone from dealing with individual machines, to individual applications, to departmental networks, to cross-department integration and finally to global business networks,” he outlines. “As someone responsible for a business, this means that more and more activities depend on technology and solutions that out of your control.”
He describes SaaS as a “particularly interesting conundrum” in this area – what happens to your SaaS-dependent company when you allow another company to deal with your customers’ private details or when your Internet connection cuts out in your operations centre, he asks.
The speed of change in the business environment presents a challenge in itself, Ward-Dutton says, with syndication and virtual provisioning meaning that many companies now deliver goods and services that are “broader than they are responsible for”.
For example, Tesco “now sells finance products, often through affiliates”, he observes.
Against that backdrop of formidable change, the regulatory landscape is also shifting. “Whether regulatory or voluntary, there are huge additional pressures towards social responsibility and transparency,” Ward-Dutton says. “Environmental concerns, for instance, now affect everyone from oil and gas companies to retailers.”
The impact of the challenges of scope, speed and regulation are evident in most organisations. “They are being pushed to become more dynamic, to seek innovation and to look for it in more places,” he says. “They are also shaped more by external pressures. It’s been a long time since I saw an organisation that does five-year planning – now it’s more like five minutes.”
Many have reacted by adopting flexible structures, “so it’s sometimes hard to see where one company ends and another begins. Boundaries are porous and old ways are breaking down,” he says.
IT managers are consequently under pressure to provide more flexible systems. “It’s not like we need any more IT – it’s not about buying more stuff. It’s about having space to move,” he argues.
But businesses need to realise that simply having a flexible system is not enough. “All the technology in the world is of little advantage if it has no relation to business concerns. Flexible systems only take you so far if all you do is address the technology challenge.
To create sustainability you have to augment [flexible systems] with business-driven IT relationships.”
Ward-Dutton has four questions for IT managers to ask: “What are we trying to do and why? How close are we to doing the right things? How close are we to doing things right? And what should our transformation process be?”
Key to aligning business with IT is not so much getting the CIO on the board – “that’s the outcome” – as gaining the trust of the business teams.
“At the end of the day, it’s about trust. IT managers who make this work at a high level are saying [to business leaders], ‘We can’t give you 100% confidence and the return on investment numbers, but we’re confident that this will work’.”
