With IT budgets slack, delivering business value is paramount

Summary:Interesting information from Gartner's recent Symposium/ITxpo about the future of IT continues to be the subject discussion in the blogosphere. While I'm far from being an unabashed Gartner fan, I will admit they tend to capture of the pulse of the IT business better than almost anybody these days. Their most recent prescription for curing IT budget woes (which have been relatively flat for four years running) describes nine major initiatives that could alleviate this situation. And it is also one of their more interesting information releases in recent memory.

Interesting information from Gartner's recent Symposium/ITxpo about the future of IT continues to be the subject discussion in the blogosphere.  While I'm far from being an unabashed Gartner fan, I will admit they tend to capture of the pulse of the IT business better than almost anybody these days.  Their most recent prescription for curing IT budget woes (which have been relatively flat for four years running) describes nine major initiatives that could alleviate this situation. And it is also one of their more interesting information releases in recent memory. 

 

IT and Business Value with Web 2.0 and WOA

One significant reason for this in particular, as Microsoft's Michael Platt noted late last week, is no mention of SOA anywhere in Gartner's list of actions that IT leaders must take to show IT's business value.  Gartner has been a notable proponent of SOA as the overarching solution for business value for a while now and has stated as recently as last year that 80% of all development projects will use SOA as the basis for development by 2008.  Furthermore, they've stated that:

SOA shifts developer focus from software to business functions, thereby transforming installed software from an inhibitor to a facilitator of rapid business change.

The industry however is rapidly realizing that SOA is not creating this shift of focus from software to business, at least not on its own.  Other things are however.  Reflecting this, one of the more interesting initatives Gartner prescribes, though unfortunately buzzphrase encrusted, is the following:

Operate All Revenue Generating Channels in a Web 2.0 Architecture by 2008. Enterprise architects must act as catalysts that speed the formation of unified business technology strategies and their execution. The enterprise architecture process must shift gears from limiting complexity by limiting choices to accelerating innovation and execution by coordinating complexity through unified business and IT strategy, decentralized execution and loose coupling among all related stakeholder disciplines.

While the business-speak and obtuseness tends to turn off IT people, I think it's important to realize that business leaders tend to think like this and innately prefer active enablers over gating forces.  As an enterprise architect, I can sympathize with the view that the IT architecture tends to think about architecture as a set of forces and constraints instead of a fulcrum or lever for the strategic goals of the business.  And far too many times I've talked to CIO and VPs who repeatedly complain about IT's inability to help them solve problems quickly enough to matter. 

So is the stance of IT just far too focused on central control, technology, and bureaucracy?  Flat budgets despite an all time demand for IT tells us the answer.

Platt, who has been doing some stellar thinking recently about this new way of looking an software architecture, goes on to note that:

The interesting use of Web 2.0 in business is in CRM or more specifically Customer Lifecycle Management. Typically CLM is too expensive and long drawn out to be able to do effectively so organizations have tried to do a cheap version which fails. With the use of Web 2.0 social and community techniques however now CLM can be done effectively and efficiently. This is where Web 2.0 will impact organizations the most.

And use of Web 2.0 techniques to service customers is part of where a lot of thinking is currently aligning, around business value across efficiency, revenue generation, deep automation, and execution.   And in my opinion, this is subtantially the subtext of the Gartner discussion on initiatives for sustaining IT:

  • Control is moving to the business.  No longer content or able to wait for IT to solve problems, business units are increasingly comfortable in self-service IT techniques.  This is particularly true given a new wave of younger workers who expect more personal control over their IT systems and have both connection to the business and are generally highly tech-savvy.
  • Smaller investments allow new problems to be solved.  An business problem that was solvable using older, heavyweight IT techniques for $1M could only solve problems where the return on investment would be greater than $1M.  If that problem can solved for $10K today using Web 2.0-style architectures, it opens up a whole new wave of IT value.  I sometimes refer to this The Long Tail of IT Value. The mass self-service of these often untapped micromarkets within a business are potentially large.
  • Relentless Transactional Automation.  Rote business processes should be and will be automated extensively over the next few years, freeing up employees to be inserted into the most high-value processes that require human intelligence.
  • Increasing Dynamic Decentralization of Execution.  The new social, collaborative tools allow ad-hoc and emergent teams to network, form, and execute business processes as needed.  This leads to the increased invovlement of people at the key points in the process, something Gartner emphasizes as well.
  • Tacit Customer Relationship Management.  Automated customer self-service is as critical for transactional business processes as ever, but this has been done in a relatively tone deaf fashion up to this point and it's been an all-or-nothing process for the most part up until now.  Traditional CRM and CLM hasn't been responsive or malleable enough and often prematurely optimizes the process, fixing automation or personal interaction at the wrong places.  Tacit CRM means being able to provider personal, effective customer solutions in a cost-effective way using a combination of automation and systems.  Getting it right means getting or keeping the customer.  Getting it wrong means handing your customers to your competitor.  I've written recently about transactional vs. tacit business processes, and it's one of the most important parts of Web 2.0 in the Enterprise.

A final note: I don't think SOA is going away at all, but its inability to deliver strategic business value for more than a handful of companies speaks volumes about its capability, in its present form, to deliver value in increasingly shortened cycles of innovation/improvement.  Rather, SOA will begin to change, evolve, and even converge/blend in with the next generation of the Internet and business.

Is IT becoming purely about tactical infrastructure with the strategic pieces moving to the business units?

Topics: Enterprise 2.0

About

Dion Hinchcliffe is an expert in information technology, business strategy, and next-generation enterprises. He is currently Chief Strategy Officer at the digital business transformation firm Adjuvi. A veteran of enterprise IT, Dion has been working for two decades with leading-edge methods to bridge the widening gap between business and... Full Bio

zdnet_core.socialButton.googleLabel Contact Disclosure

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.