Look to the clouds as the perfect storm rages

Look to the clouds as the perfect storm rages
By Jon Pyke, chief strategy officer, Cordys

Published: January 14 2009 16:50 | Last updated: January 14 2009 16:50

The change that the world is currently going through is what recessions are all about. Fast, inevitable and unavoidable. But we do not have to be passive onlookers while these forces do their worst.

To lead in this business environment is to embrace change. That means the underlying business processes and operations must be both thorough and quickly adaptable. It is no longer just what you do that counts, it is how you do what you do – and how quickly you can modify your methods to take on new opportunities and challenges.

Organisations need to transform themselves into agile operations but, unfortunately, the IT organisation, responsible for facilitating changes demanded by the business, often falls short.

Many studies and surveys show that changes to IT infrastructure and applications are fraught with complexity, costing more and taking much longer than anticipated. It is not uncommon for an IT organisation to take five or more years to make significant enterprise-wide changes.

Another issue straining relationships between business and IT is the difficulty in finding common ground for the communication between the two areas of the organisation. Business people often have a poor understanding of the existing business processes that they wish to improve, and very limited visibility into how effective these processes actually are. They also often lack sufficient technical expertise to specify their requirements.

This constant friction resulted in what is known as the “IT Gap”. Instead of being in a position to help the business become more competitive, IT has to invest most of its budget (historically greater than 70 per cent) in maintenance of existing legacy systems and applications.

Being able to invest more in “new development” and innovation to increase business agility and efficiency are top priorities for most progressive CIOs.

One way to help organisations become more efficient and agile is business process management. BPM is designed from the outset to enable businesses to discover how their processes work, how to measure them, and optimise them but also to execute them and change them when needed.

The technology has a chequered past which has resulted in a hotch-potch set of solutions growing out of an older technology, workflow automation, and a strictly IT solution known as enterprise application integration. Attempts to create a credible BPM solution by stitching together workflow and EAI technologies has yielded poor results.

Now is the time to take advantage of this new opportunity. The “perfect storm” we are in is bringing to the fore new ways of working, transforming the relationship between IT and business – and at its centre is “the cloud”.

Computing is fast becoming a cloud – a collection of disembodied services assembled from anywhere and detached from the underlying hardware. Businesses are becoming more like technology itself: more adaptable, more interwoven and more specialised.

On one level, the cloud will be a huge collection of electronic services based on standards. Many web-based services are built to be integrated into existing business processes. IT systems will permit organisations to become more modular and flexible and this will lead to further specialisation. In the cloud it will become even easier to outsource business processes, or at least those parts of them where firms do not enjoy a competitive advantage.

This also means that companies will rely more on services provided by others.

There will be not be just one cloud but a number of different sorts: private and public, which themselves will divide into general-purpose and specialised. People are already using the term “intercloud” to mean a federation of all kinds of clouds, in the same way that the internet is a network of networks. And all of those clouds will be full of applications and services.

It will take time to move towards this paradigm and the organisation cannot close its data centres and throw away its old systems overnight. The migration needs to be systematic and thorough.

As a final point we should turn the clock back 10 years to when the world was obsessed with the millennium. While organisations were checking millions of lines of code two students took another look at an everyday problem.

The students focused on how searching across the internet worked. The main search engines of the day were turning themselves into web portals and destinations. The students came up with an elegant solution and Google was born.

Copyright The Financial Times Limited 2009