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Posts Tagged ‘offshoring’

inTHiNK! it’s official!

October 13, 2010 2 comments

After 5 great years of fun at Microsoft UK it’s time for me to say so long as I move on to new things although I fully expect to remain part of the Microsoft ecosystem and still haunt the corridors of the UK Campus from time to time!

So what does a Microsoft Architect do after Microsoft? Well more architecture it seems from the business through to its people and the systems the use. There are actually three main strands to my post-Microsoft strategy that I’ll summarise below:

iasa

As you may know I’ve had a long history with IASA, especially here in the UK where I founded and have chaired the UK chapter for around 6 years now. During this time we’ve been developing a credible and sustainable education and certification program for IT architects and now, along with my colleagues at IASA, I want to bring this to Europe. We’re holding our next UK certification boards this November but the plans for IASA Europe are much bigger than just this.

inthink

inTHiNK! is the name of my new professional services practice www.inthink.co.uk. inTHiNK! will offer services from business & technology strategy, architecture practice and guidance through to cloud readiness and enablement. This will scale out through an extensive associate network of solid top-level IT professionals. Contact info@inthink.co.uk if you want to follow up.

image

As a brand new bizspark partner I will be seeking to exploit the value of the Azure platform delivering a new breed of SaaS enablers and business offerings to the market!

 

Here’s my new contact details if you wish to stay in touch

Matt Deacon
CEO, inTHiNK! Ltd
www.inthink.co.uk
mattdeacon.wordpress.com
www.twitter.com/mattdeacon

Unbundling the bank

Just over 2 years ago I first wrote the post entitled “unbundling the bank” and hear I am finding myself planning a talk at CloudCamp next week entitled the same! The title, I thought, came to me earlier this week when I had chance to visit a team of Enterprise Architects at a large UK bank. I was sure the title was not “original” and came from somewhere, so you can imagine my surprise when I did the necessary search and my blog came out on top – lol!

What I really love though – is that the thoughts are just the same, the evidence however continues to mount, pointing towards the further differentiation of IT, but increasingly of the business itself, from “centralised vertical models to decentralised models made up of “single value specialists”.

Unlike my talk to bankers back in 2007, this time, the EAs are thinking about the implications of cloud and software+Services more seriously, and while most would say never, to some the light bulb is on and the opportunity for disruption is imminent!

One thing I really liked and had forgotten about the talk by Craig Heimark back in 2007 is the drive to “create increased value to the consumer at the expense of the margins; the higher the volumes the lower the margin” which to my mind reads “commoditisation”.

In the old world view of innovation, it would make sense to keep this closed or hidden, to maintain ones market lead at the expense of competition. Thereby keeping margins high.However, in an open innovation model the race to commoditise is high, Keeping margins low to avoid competition and drive to mass market appeal and therefore scale quickly. If an innovation does not scale in terms of consumer appeal then it’s not an innovation worth pursuing.

Although, it takes time for shift to happen, there are examples all over of this taking place. Below is a list of common occurrences that may take place in isolation or combination but are enablers in moving towards a more “composite enterprise”. I’ve covered some of these previously so some repetition might arise.

Rise of Multi-sourcing

As discussed previously. Enterprises that have outsourced are actively re-insourcing, but in so doing they are differentiating between what comes in and what stays out. The latter are often non-differentiating or commodity, but by going through this process the results seldom remain with the encumbent outsourcer but move to new specialists.

Service Provider Convergence

The traditional models of software suppliers like system integrators, outsourcers and ISVs are converging. The SI is moving away from delivery of bespoke software to the delivery of bespoke services, software no longer lands inside the organisation’s datacentre but is automatically outsourced by the integrator. The integrator has a shared risk-reward with the customer – they are innovation partners with a desire to grow the market of the service itself, not just the value it itself fulfils.

Delivering Innovation as a business

Many enterprises are project-driven, but this is a mis-understanding, it is more that they are project-organised, they are in fact innovation or opportunity driven. The problem is they don’t realise this due to the project-based mentality that results. By taking an innovation-driven approach it is easier to see this as a business investment and to consider creating a structure that mimics more of a business than a project. this has dramatic and profound results both in terms of outcomes, but also to the people involved, the processes they create and the resultant capability that they generate.

Innovation Hubs

Closely related is the rise in innovation hubs or R&D centres, that incubate or provide support to new pilot innovations. This extends outside the enterprise too, to the service provider communities where a joint risk reward reduces up front costs of innovation in favour of longer term commitment and profit, leading to the model of collaborative innovation between partners.

Rise of the new COTS Service

A great example of the re-rise of COTS (Service) is the growth, adoption and subsequent mass-customisation of the large ERP systems over the late 90s and early 00s. For those that invested heavily, there is an increased growth in EA projects looking to detangle the enterprise from these investments in favour of the new COTS Services often delivered over the web as SaaS. The simple question being why customise what doesn’t differentiate? Furthermore, by taking a simplified ‘industry standard or accepted’ approach to a business problem you start to create the opportunity to chose who delivers the service over time.

Service Centricity

There is a shift happening but it’s been happening longer than many think and its effects may be larger and more significant than we at first expect.

This shift is business driven, as it strives to maintain its innovation edge ensuring that costs are reduced and ensuring it moves to a more lean and efficient model of operation. In truth , we can look back as far as Adam Smith and the division of labour in the 1700s to the origins of this shift and may therefore suggest that the shift is not really new at all. However, the old model and granularity of operations is under major pressure to change once more.

The shift is to one of Service Centricity and although it has been a long time in coming, the advancement in technology and the role of technology as an agent of change and business differentiator in the modern enterprise is rapidly moving us over the tipping point that causes us to re-evaluate the very foundations of “the enterprise” itself.

Hype and hot air!

Cloud is undoubtedly centre stage and the hype is reaching tsunami proportions. Many blame this on the vendors but while the idea has got the technology market excited I think this view deflects us from the real question of cause and effect. Is this an example of technology creating new markets or is it an example of technology reflecting the needs of existing markets? In essence it’s an element of both and as is often the case with new innovations it often causes us to view things differently which results in new ways of solving existing problems.

As such ‘Cloud’ in all its forms is set to a have a significant impact on the enterprise, but it is in delivering direct quantifiable business value that the cloud will deliver its most significant impact. If you think of cloud simply in terms of utility computing or dynamic provisioning of infrastructure then the point of cloud and its significance may pass you by.

I want your solution not your software

The impact of cloud is already visible across the enterprise today in the endemic use of Software as a Service (SaaS) Solutions at least somewhere within the enterprise and it is not that this is something that just happened overnight but has certainly been growing over the past 5 or so years. Many Independent Software Vendors (ISVs) cite that customers want but don’t want to burden IT. They ask if they can prototype the solution hosted by the ISV. The solution seldom ends up coming in house. One ISV recalled a customer saying “we want your solution, but we don’t want your software”. The issue for the ISV is that they are now a hoster and need infrastructure expertise, something they have little in-house skill or budget for. Cloud platforms provide these ISVs with an instant, scalable, reliable solution that they themselves would be hard press to achieve and all at a price that scales with their customers.

The dilemma for Internal IT

For Internal IT this creates a problem if done without their knowledge and its incumbent on IT to be proactive in the establishment of external services rather than representing a obstacle which will only be seen as holding the enterprise back. Taking a lead on these fronts is where IT can achieve the best results, providing vendor selection services to streamline the process and actually becoming the agent of adoption promoting well governed use of services across the enterprise.

Rise of multi-sourcing

The impact of cloud is not exclusive to the ISV or Internal IT but to the very fabric of the traditional software supply chain.Today we readily recognise different roles and functions across the supply chain from ISVs, to System Integrators, Outsourcers to Offshoring but what happens to these discrete entities if we look to the deliver of services? They start to converge. If I deliver a solution as a service, then I am no longer disengaged from the customer post-sale, we’re tied together for as long as the provision the service. What of the System Integrator? The solution is no longer deployed on-premises for running in-house, but as with the ISV, it’s hosted by the SI. The relationship between consumer and supplier are tied together once more. And so it goes, an ISV looks more like an SI, an SI more like and ISV, they both are outsourcing because the solution never in-sourced. The enterprise is now no longer exclusively in-house or outsourced, but multi-sourced.

Collaborative/Shared Innovation

similar to open innovation through multi-sourcing the enterprise is seeking partnerships for the provision of business services. This is fine at the commodity level, but as one delves ever closer to core business services the need to tailor and personalise and more importantly, protect IP becomes more significant. However, here too we see developments in service centricity through the development of innovation centres and incubation hubs often maintained by the enterprise itself. This works well but is limited and often expensive to nurture. By collaborating and sharing innovation more pro-actively with service partners it is possible to drive the innovation faster, cheaper through a shared risk/reward model, thus allowing the innovation the opportunity to expand much further beyond the horizons of the parental organisation as the market opportunity evolves.

Integration as a Service

 

Today we see see the commodity functions of email and collaboration moving out of the enterprise at a dramatic rate. So what next? Mission critical? Core Functions? Maybe not, but by using cloud to extend or embellish these core functions and to connect and integrate with other service providers, business partners or different parts of the enterprise itself then adoption rates here too can be seen to be gathering pace.

The Business as a Service

When I think of this I am always reminded of Amazon’s Mechanical Turk which takes it’s name from an 18th century chess-playing machine that really hid a human chess master inside.This service provides human workflow services that are accessible through a web service (programmable API). If we look at the business as a set of collaborating capabilities then we can effectively define boundaries or APIs and describe what the capability does but not how it does it or who does it. This is service centricity business style. This is the “composite” business or business as a service.

Small is the new big.

None of this for you? Maybe not. But if it’s not for you then be sure it certainly is for someone and as is the way with disruptive innovation, it may come from a source much nearer home than you think. Take one person with good business domain knowledge,  take one developer, take one cloud and what have you got? A business service that is reliable, scalable and available to a world of consumers at a cost that they can all afford.