IT customization can delay innovation adoption

Enterprises are reducing customizing their IT infrastructure as more modifications can mean lagging "far behind" on software versions, and prevent them from adopting new technologies from their IT supplier requiring the latest version.
Written by Jamie Yap, Contributor

SINGAPORE--Increasingly, enterprises today are pulling back on customizing their IT infrastructure because making several modifications may leave the infrastructure lagging behind on software release versions. That ultimately becomes a barrier to adopting the latest innovations from their vendors to help the customer advance its business.

According to Donald Feinberg, vice president and distinguished analyst for information management at Gartner, customers trust their supplier to come out with innovations that will keep them ahead of the pack. "[Because] theoretically, you don't do business with a vendor that's not innovative," he said.

Less customization of IT infrastructure means companies can more quickly adopt the latest innovation from their vendor, which requires the newest software version.

Customers expect to be able to take advantage of new applications, but without disrupting their current IT environment, which a vendor can deliver. The only catch is their infrastructure has to be on the vendor's newest software version, Feinberg said at a media briefing here Monday. He was in Singapore to speak with SAP customers at the vendor's Real-Time Enterprise summit.

That is why companies nowadays "go as much off-the-shelf as they possibly can", where the approach to IT infrastructure is "more vanilla than modifications", he said.

Not only is maintenance costly, they realized a lot of self-customization precludes them from moving quickly to new software versions, since they end up "so far behind" on release versions. All it means is they cannot take advantage of the newest innovations as fast they would like. One "painfully obvious" example was when SAP announced a new CRM product which runs on HANA last November called 360 Customer, Feinberg pointed out. HANA is the German software giant's in-memory database technology.

At the same time, large enterprises also face greater competition from small and midsized businesses (SMBs), the analyst pointed out.

He explained that big enterprises often customized their IT because they "could afford it and keep their ancient ways", but this delays them from adopting innovative technologies. In contrast, SMBs, which could not afford much IT customization in the first place, are quicker in adopting the new technologies and then adjusting their company's processes accordingly. And that enables SMBs to satisfy customers' demands faster and more cheaply, and hence increasingly take business away from larger enterprises, he said.

That SMBs are able to compete with the "big guys" is due to both globalization and the Internet, Feinberg emphasized. For example, even if an enterprise IT vendor does not market directly to SMBs, it likely has a network of partners, some of which may sell the vendor's latest offerings to SMB customers via SaaS (software-as-a-service).

What this illustrates is where macro forces intersect is where business value and transformation lie, Feinberg said, drawing reference to Gartner's "nexus of forces"--cloud, social, mobile and data.

On their own, each IT trend is important and useful to companies, but the "real value is where two or more [of these forces] intersect", he said. For instance, a luxury retail boutique could install RFID (radio frequency identification) in its membership or loyalty cards. When a customer passes through the store or the card is swiped at the cashier, sensors would send data about that customer's preferences or past purchases to retail staff's smartphones to help them provide a more personalized service and hopefully generate greater sales. This is a case of mobile, social and cloud at work, Feinberg noted.

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