Autonomy buys US software group for $775m
By Philip Stafford
Published: January 22 2009 15:10 | Last updated: January 22 2009 15:10
Autonomy, the search software company, hopes to make further inroads into the compliance and regulation market with the US acquisition of Interwoven for $775m (£558m) cash.
The Cambridge-based company has ridden a wave of corporate demand for compliance-related software in the past year following changes to regulations on the storage of electronic data and fears among financial institutions of litigation in the wake of the credit crisis.
Autonomy will offer $16.20 a share for Interwoven - a premium of 36 per cent to the US group’s share price before the offer.
Autonomy will pay for the deal partly through its own $200m cash reserves, a new revolving credit facility provided by Barclays and a £220m share placing.
David Toms, an analyst at Numis Securities, said that Interwoven gave Autonomy access to corporate content management systems and a potential repository of unstructured electronic information, such as documents, e-mails, phone conversations and multimedia.
”Interwoven’s particular footprint in the legal industry plays to Autonomy’s current ’regulatory’ enthusiasm,” he said.
The deal is expected to enhance earnings in 2009 by 20 per cent.
The placing, priced at £10.33, was five times subscribed and completed in just 60 minutes, traders said.
Citi, Deutsche Bank and Morgan Stanley were the joint co-ordinators of the placing.
Autonomy shares closed 39p higher at £10.72.
FT Comment
Mike Lynch, chief executive, likened Autonomy’s core IDOL software to a jet engine - sticking it on to the body of an aircraft creates something useful. Previous acquisitions such as Verity for $500m in 2005 and Zantaz for $375m in 2007 gave Autonomy aeroplanes on to which it could bolt its jet engine, and the Interwoven deal follows that pattern. Potentially, the deal catapults Autonomy into a broader market. As electronic information becomes ever more scattered and haphazard, organised storage of it becomes more difficult. The ability to search for relevant bits quickly for compliance reasons becomes paramount. Autonomy has a record of successful integration of acquisitions and the price of 2 times revenues is no more expensive than similar deals in the sector. The difficulty might lie in Interwoven’s lower margins but Autonomy overcame similar issues with Zantaz. Earlier this week Autonomy hailed 2008 as ”a record year”. There have been concerns whether momentum could be sustained but it is now likely to continue into 2010.
Copyright The Financial Times Limited 2009
Thursday, January 22, 2009
Monday, January 19, 2009
How to get value from IT in a downturn
How to get value from IT in a downturn
Richard Bhanap says now is the time to shake up the IT landscape in ways that might not be tolerated in more prosperous times
Published: January 19 2009 08:50 | Last updated: January 19 2009 08:50
In turbulent times, standard cost containment exercises such as tightening expense approval procedures, limiting new work commissions and restricting recruitment and travel can be effective. But they are rarely game changing. Typically, they must be backed by more sustainable cuts.
Here is a three-pronged approach to cost reduction that paid off for a global manufacturing company which found its €560m annual spend on application management unsustainable.
Its disparate systems, applications and management teams were spread across geographies and business units. Duplication, complexity and a high degree of local customisation made it difficult to extract value.
Over a 20 month period, it reduced its like-for-like yearly applications management spend by 12 per cent, broke even on its investment by the start of the third year, and is on target to achieve 30 per cent reduction in annual spend by the end of year three.
As the programme leader says: “The analysis, strategising and execution for a programme like this needs careful thought, design and planning. But it’s really all about the power and the politics. You need a burning platform to stand a chance of getting the mandate to do this.”
That’s exactly the opportunity that current business conditions present. So what is required?
Like it or not, one of the fastest and most effective ways to reduce IT spend is to abandon projects. However, the reasons why the expenditure was needed in the first place will inevitably resurface, probably more acutely, further down the line.
Rather than taking a hatchet to the IT project investment portfolio, effective cost-cutting techniques include:
● raising the bar in terms of what constitutes an IT priority;
● eliminating duplicate initiatives across business units;
● leveraging investments to deliver value across multiple geographies; and
● re-scoping and re-phasing projects to fit within tighter funding constraints.
Meanwhile, the resulting IT project investment portfolio must tell a coherent story that is tightly aligned to current business priorities.
Longer-term structural change is more painful. But tough times call for tough measures. Relatively uncontentious are savings from rationalising the IT infrastructure footprint through global data centre consolidation and server virtualisation.
More highly charged, both politically and emotionally, are attempts to optimise the business application systems landscape. Business units, which tend to own these systems and their associated spend, guard them fiercely. A proliferation of overlapping or duplicate systems and applications may evolve when business units operate in silos and pursue unilateral solutions to similar problems.
As a consequence, some large organisations admit that their IT application landscapes cost up to one-third more to maintain than they should. For a company spending £1bn a year on IT, that’s £100m or more in wasted value.
Now, armed with tighter budgets and a pressing need to cut costs, IT executives have more clout to optimise spend. There are three steps to optimisation:
1. Gain control and establish transparency of applications-related spend and activity.
2. Constrain demand for change to applications systems.
3. Reduce the cost of executing each change.
IT executives need to break the mentality that has led to the proliferation of applications. Greater savings are typically achieved by taking a cross-organisation approach to optimisation rather than a business unit, function or geographic focus.
First, establish the current total spend for maintaining the applications landscape. Then, unify responsibility for managing this spend. Finally, for the overall applications landscape, create heat maps that identify:
● those applications which consume the greatest spend, and the business or technical drivers of that spend;
● the degree of duplication or overlap of applications.
To control investment and drive convergence, applications on the heat map should be labelled:
● Strategic – technically sound and key to the future success of the business.
● Sunset – tagged for future decommission.
● Legacy – non-strategic; no replacement plans currently in place.
It then requires a disciplined approach to sift out changes that do not genuinely and directly address business imperatives.
Heat maps help pinpoint opportunities to rationalise or decommission high-cost applications and can be used to prioritise change requests and to challenge or block “sunset” and “legacy” application modifications. The simpler the resulting applications landscape, the lower its cost of maintenance.
Heat maps also highlight applications that are prone to failure or which need frequent change due to poor design. So, by remediating critical applications which consume significant spend, the effort and costs of implementing change are reduced.
Other actions are also needed: rethink the application delivery model; assess whether the unit cost of change and effort can be reduced by changing the mix of onshore, nearshore or offshore working; identify whether application management resources can be relocated and concentrated into fewer larger solution centres to achieve economies of scale and meaningful productivity improvements; and consolidate spend with vendors to fewer strategic suppliers aligned to the new IT delivery model.
Richard Bhanap is the outgoing head of KPMG’s European IT Strategy and Performance practice
Copyright The Financial Times Limited 2009
Richard Bhanap says now is the time to shake up the IT landscape in ways that might not be tolerated in more prosperous times
Published: January 19 2009 08:50 | Last updated: January 19 2009 08:50
In turbulent times, standard cost containment exercises such as tightening expense approval procedures, limiting new work commissions and restricting recruitment and travel can be effective. But they are rarely game changing. Typically, they must be backed by more sustainable cuts.
Here is a three-pronged approach to cost reduction that paid off for a global manufacturing company which found its €560m annual spend on application management unsustainable.
Its disparate systems, applications and management teams were spread across geographies and business units. Duplication, complexity and a high degree of local customisation made it difficult to extract value.
Over a 20 month period, it reduced its like-for-like yearly applications management spend by 12 per cent, broke even on its investment by the start of the third year, and is on target to achieve 30 per cent reduction in annual spend by the end of year three.
As the programme leader says: “The analysis, strategising and execution for a programme like this needs careful thought, design and planning. But it’s really all about the power and the politics. You need a burning platform to stand a chance of getting the mandate to do this.”
That’s exactly the opportunity that current business conditions present. So what is required?
Like it or not, one of the fastest and most effective ways to reduce IT spend is to abandon projects. However, the reasons why the expenditure was needed in the first place will inevitably resurface, probably more acutely, further down the line.
Rather than taking a hatchet to the IT project investment portfolio, effective cost-cutting techniques include:
● raising the bar in terms of what constitutes an IT priority;
● eliminating duplicate initiatives across business units;
● leveraging investments to deliver value across multiple geographies; and
● re-scoping and re-phasing projects to fit within tighter funding constraints.
Meanwhile, the resulting IT project investment portfolio must tell a coherent story that is tightly aligned to current business priorities.
Longer-term structural change is more painful. But tough times call for tough measures. Relatively uncontentious are savings from rationalising the IT infrastructure footprint through global data centre consolidation and server virtualisation.
More highly charged, both politically and emotionally, are attempts to optimise the business application systems landscape. Business units, which tend to own these systems and their associated spend, guard them fiercely. A proliferation of overlapping or duplicate systems and applications may evolve when business units operate in silos and pursue unilateral solutions to similar problems.
As a consequence, some large organisations admit that their IT application landscapes cost up to one-third more to maintain than they should. For a company spending £1bn a year on IT, that’s £100m or more in wasted value.
Now, armed with tighter budgets and a pressing need to cut costs, IT executives have more clout to optimise spend. There are three steps to optimisation:
1. Gain control and establish transparency of applications-related spend and activity.
2. Constrain demand for change to applications systems.
3. Reduce the cost of executing each change.
IT executives need to break the mentality that has led to the proliferation of applications. Greater savings are typically achieved by taking a cross-organisation approach to optimisation rather than a business unit, function or geographic focus.
First, establish the current total spend for maintaining the applications landscape. Then, unify responsibility for managing this spend. Finally, for the overall applications landscape, create heat maps that identify:
● those applications which consume the greatest spend, and the business or technical drivers of that spend;
● the degree of duplication or overlap of applications.
To control investment and drive convergence, applications on the heat map should be labelled:
● Strategic – technically sound and key to the future success of the business.
● Sunset – tagged for future decommission.
● Legacy – non-strategic; no replacement plans currently in place.
It then requires a disciplined approach to sift out changes that do not genuinely and directly address business imperatives.
Heat maps help pinpoint opportunities to rationalise or decommission high-cost applications and can be used to prioritise change requests and to challenge or block “sunset” and “legacy” application modifications. The simpler the resulting applications landscape, the lower its cost of maintenance.
Heat maps also highlight applications that are prone to failure or which need frequent change due to poor design. So, by remediating critical applications which consume significant spend, the effort and costs of implementing change are reduced.
Other actions are also needed: rethink the application delivery model; assess whether the unit cost of change and effort can be reduced by changing the mix of onshore, nearshore or offshore working; identify whether application management resources can be relocated and concentrated into fewer larger solution centres to achieve economies of scale and meaningful productivity improvements; and consolidate spend with vendors to fewer strategic suppliers aligned to the new IT delivery model.
Richard Bhanap is the outgoing head of KPMG’s European IT Strategy and Performance practice
Copyright The Financial Times Limited 2009
Thursday, January 15, 2009
Hollywood op de werkvloer (fd.nl)
15 januari 2009 | Het Financieele Dagblad
Door: Dalm, R. van
Opkomst van internet leidt tot 'sterrenprofessionals' die grote inkomens verdienen
Roy van Dalm
Amsterdam
Dankzij de sociale netwerken op het internet kunnen mensen zichzelf organiseren. Nu nog vooral om filmpjes of foto's te delen, maar straks steeds meer om samen online te ondernemen. Wat betekenen in de toekomst nog begrippen als arbeidscontract of loopbaan? De Amerikaanse internetprofessor Clay Shirky voorziet een 'Hollywoodeconomie' waar de sterrenprofessionals van organisatie naar organisatie 'hoppen'. De mindere goden kiezen voor veiligheid en leveren daar loopbaankansen voor in.
Clay Shirky, hoogleraar Nieuwe Media aan New York University, is auteur van de bestseller Here Comes Everybody. Het internet van de sociale netwerken, ook wel Web 2.0 genoemd, verandert de manier waarop mensen groepen vormen ingrijpend, is de kern van Shirky's observaties. Dat begint met foto's delen op websites als Flickr, en leidt via online actievoeren tot het vormen van commercieel gerichte organisaties. Bedrijven die zomaar op het internet ontstaan? Is dat wel een organisatie? En, hoe maak je daar nog carrière?
Is het in de toekomst afgelopen met onze organisaties als ze alleen nog op internet bestaan?
'Nee, dat is niet zo en wel om de doodeenvoudige reden dat ze niet allemaal virtueel worden. Mensen denken vaak dat een bepaalde vorm de plaats gaat innemen van de vorige vorm. Echter, de beweging is niet van A naar B, maar van één vorm naar vele vormen. Het is niet zo dat hiërarchie en management nu ineens slecht zijn en verdwijnen. Online netwerken zullen hiërarchie niet overbodig, maar wel hybride maken. Vroeger moesten organisaties wel gemanaged worden. Nu kunnen ze ook gecoördineerd worden. En sociale netwerken zijn er altijd geweest, ook binnen organisaties. In het verleden moesten mensen fysiek samenkomen om dingen te delen. Op het internet kun je meteen al kennis, foto's of muziek delen en daarna pas samenkomen.'
'Neem fotosite Flickr als voorbeeld. Iemand zet daar zwart-witportretfoto's op en vervolgens gaan anderen daaromheen ook hun zwart-witportretfoto's plaatsen. Daarna ontstaat een hele kennisgemeenschap rondom zwart-witportretfotografie. Je ziet die samenklontering ook gebeuren met actiegroepen met een gezamenlijk maatschappelijk doel. En met groepen met een gezamenlijk commercieel doel. Met andere woorden, bedrijven die spontaan ontstaan. Maar daarmee verdwijnt de gewone arbeidsorganisatie nog niet.'
Maar hoe zit het met arbeidsrelaties als er een veelheid aan organisatievormen gaat ontstaan?
hirky: 'Wat in ieder geval gebeurt, is dat de opkomst van Web 2.0-organisaties zal leiden tot een destabilisering van onze arbeidscontracten. Er komt veel meer onrust en beweging van mensen die van de ene naar de andere organisatie trekken. De vraag is of dat voor iedereen geschikt is. Voor de zelfstandige professional wel. Die redt en verkoopt zichzelf. Maar mensen in minder kennisintensieve beroepen met minder mobiliteit hebben daar geen baat bij. De kenniseconomie zal steeds meer een Hollywoodeconomie worden met grotere inkomensverschillen. Voor de sterren worden kapitalen neergeteld om ze maar bij jouw productie te krijgen, en de rest is bijrol en figurant.'
Is dat het einde van de arbeidszekerheid?
'Nee, omdat je ook hier zult zien dat er een diversiteit aan contracten en afspraken met de werkgever gaat ontstaan. In grote lijnen heb je twee mogelijkheden. Of je hebt een overeenkomst die hoge kansen maar een lage zekerheid biedt. Of je kiest voor een hoge mate van zekerheid, maar neemt dan genoegen met lage kansen. De ene werknemer spreekt zijn scholing en ontwikkeling met zijn werkgever af, maar heeft een beperkt loopbaanperspectief. De ander heeft de financiële ruimte om meer aan de eigen ontwikkeling te doen, maar hij of zij regelt het dan ook helemaal zelf. Die mensen managen hun eigen cv en profiel via online netwerken als LinkedIn of Facebook. En de kloof op dit gebied zal niet bestaan tussen grote bedrijven met grote loopbaanbudgetten en kleine bedrijven die dat niet hebben. Die kloof bestaat straks binnen de organisaties zelf en is afhankelijk van het type werk dat je doet.'
En die hoogopgeleide, mobiele superprofessional: hoe bind je die nog aan je organisatie?
'Nou, niet dus. Op dat niveau kun je geen mensen rekruteren. Je kunt ze alleen uitnodigen. Zo functioneren organisaties op het internet ook. De opgave voor bedrijven is om nieuwe modellen te vinden om in een zo kort mogelijk tijdsbestek zo veel mogelijk waarde uit je medewerkers te halen. McKinsey heeft een interessant model waarbij de consultants er voor twee jaar tussenuit kunnen. De kracht van McKinsey zit in hun enorm sterke alumninetwerk. Consultants gaan bij de klant werken, maar blijven via het netwerk in beeld en worden op termijn op hun beurt weer klant bij McKinsey. Meer bedrijven zullen als McKinsey moeten gaan denken, omdat hun werknemers dat ook al doen.'
In hoeverre zullen spontane, online commerciële samenwerkingen wel echte bedrijven worden?
'Dat is dichterbij dan je denkt. Sociale netwerken op het internet werden tot voor kort niet als onderneming beschouwd voor de wet. Ze voldeden niet aan de klassieke eisen van een geografisch hoofdkantoor of een hiërarchische managementstructuur. Maar de staat Vermont in de Verenigde Staten heeft enige tijd geleden als eerste overheid zijn wetgeving aangepast en de obstakels daarvoor weggenomen. Zij hebben een vergunning gecreëerd voor wat wij commerciële, collectieve actie noemen. Het is gewoon een kwestie van tijd en dan zal het zich gaan uitbreiden.'
Op sociale netwerken delen mensen nu nog vooral foto's, maar straks gaan ze samen online ondernemen
De opkomst van Web 2.0-organisaties zal volgens Shirky leiden tot destabilisering van arbeidscontracten; mensen trekken van organisatie naar organisatie.
Copyright (c) 2009 Het Financieele Dagblad
Door: Dalm, R. van
Opkomst van internet leidt tot 'sterrenprofessionals' die grote inkomens verdienen
Roy van Dalm
Amsterdam
Dankzij de sociale netwerken op het internet kunnen mensen zichzelf organiseren. Nu nog vooral om filmpjes of foto's te delen, maar straks steeds meer om samen online te ondernemen. Wat betekenen in de toekomst nog begrippen als arbeidscontract of loopbaan? De Amerikaanse internetprofessor Clay Shirky voorziet een 'Hollywoodeconomie' waar de sterrenprofessionals van organisatie naar organisatie 'hoppen'. De mindere goden kiezen voor veiligheid en leveren daar loopbaankansen voor in.
Clay Shirky, hoogleraar Nieuwe Media aan New York University, is auteur van de bestseller Here Comes Everybody. Het internet van de sociale netwerken, ook wel Web 2.0 genoemd, verandert de manier waarop mensen groepen vormen ingrijpend, is de kern van Shirky's observaties. Dat begint met foto's delen op websites als Flickr, en leidt via online actievoeren tot het vormen van commercieel gerichte organisaties. Bedrijven die zomaar op het internet ontstaan? Is dat wel een organisatie? En, hoe maak je daar nog carrière?
Is het in de toekomst afgelopen met onze organisaties als ze alleen nog op internet bestaan?
'Nee, dat is niet zo en wel om de doodeenvoudige reden dat ze niet allemaal virtueel worden. Mensen denken vaak dat een bepaalde vorm de plaats gaat innemen van de vorige vorm. Echter, de beweging is niet van A naar B, maar van één vorm naar vele vormen. Het is niet zo dat hiërarchie en management nu ineens slecht zijn en verdwijnen. Online netwerken zullen hiërarchie niet overbodig, maar wel hybride maken. Vroeger moesten organisaties wel gemanaged worden. Nu kunnen ze ook gecoördineerd worden. En sociale netwerken zijn er altijd geweest, ook binnen organisaties. In het verleden moesten mensen fysiek samenkomen om dingen te delen. Op het internet kun je meteen al kennis, foto's of muziek delen en daarna pas samenkomen.'
'Neem fotosite Flickr als voorbeeld. Iemand zet daar zwart-witportretfoto's op en vervolgens gaan anderen daaromheen ook hun zwart-witportretfoto's plaatsen. Daarna ontstaat een hele kennisgemeenschap rondom zwart-witportretfotografie. Je ziet die samenklontering ook gebeuren met actiegroepen met een gezamenlijk maatschappelijk doel. En met groepen met een gezamenlijk commercieel doel. Met andere woorden, bedrijven die spontaan ontstaan. Maar daarmee verdwijnt de gewone arbeidsorganisatie nog niet.'
Maar hoe zit het met arbeidsrelaties als er een veelheid aan organisatievormen gaat ontstaan?
hirky: 'Wat in ieder geval gebeurt, is dat de opkomst van Web 2.0-organisaties zal leiden tot een destabilisering van onze arbeidscontracten. Er komt veel meer onrust en beweging van mensen die van de ene naar de andere organisatie trekken. De vraag is of dat voor iedereen geschikt is. Voor de zelfstandige professional wel. Die redt en verkoopt zichzelf. Maar mensen in minder kennisintensieve beroepen met minder mobiliteit hebben daar geen baat bij. De kenniseconomie zal steeds meer een Hollywoodeconomie worden met grotere inkomensverschillen. Voor de sterren worden kapitalen neergeteld om ze maar bij jouw productie te krijgen, en de rest is bijrol en figurant.'
Is dat het einde van de arbeidszekerheid?
'Nee, omdat je ook hier zult zien dat er een diversiteit aan contracten en afspraken met de werkgever gaat ontstaan. In grote lijnen heb je twee mogelijkheden. Of je hebt een overeenkomst die hoge kansen maar een lage zekerheid biedt. Of je kiest voor een hoge mate van zekerheid, maar neemt dan genoegen met lage kansen. De ene werknemer spreekt zijn scholing en ontwikkeling met zijn werkgever af, maar heeft een beperkt loopbaanperspectief. De ander heeft de financiële ruimte om meer aan de eigen ontwikkeling te doen, maar hij of zij regelt het dan ook helemaal zelf. Die mensen managen hun eigen cv en profiel via online netwerken als LinkedIn of Facebook. En de kloof op dit gebied zal niet bestaan tussen grote bedrijven met grote loopbaanbudgetten en kleine bedrijven die dat niet hebben. Die kloof bestaat straks binnen de organisaties zelf en is afhankelijk van het type werk dat je doet.'
En die hoogopgeleide, mobiele superprofessional: hoe bind je die nog aan je organisatie?
'Nou, niet dus. Op dat niveau kun je geen mensen rekruteren. Je kunt ze alleen uitnodigen. Zo functioneren organisaties op het internet ook. De opgave voor bedrijven is om nieuwe modellen te vinden om in een zo kort mogelijk tijdsbestek zo veel mogelijk waarde uit je medewerkers te halen. McKinsey heeft een interessant model waarbij de consultants er voor twee jaar tussenuit kunnen. De kracht van McKinsey zit in hun enorm sterke alumninetwerk. Consultants gaan bij de klant werken, maar blijven via het netwerk in beeld en worden op termijn op hun beurt weer klant bij McKinsey. Meer bedrijven zullen als McKinsey moeten gaan denken, omdat hun werknemers dat ook al doen.'
In hoeverre zullen spontane, online commerciële samenwerkingen wel echte bedrijven worden?
'Dat is dichterbij dan je denkt. Sociale netwerken op het internet werden tot voor kort niet als onderneming beschouwd voor de wet. Ze voldeden niet aan de klassieke eisen van een geografisch hoofdkantoor of een hiërarchische managementstructuur. Maar de staat Vermont in de Verenigde Staten heeft enige tijd geleden als eerste overheid zijn wetgeving aangepast en de obstakels daarvoor weggenomen. Zij hebben een vergunning gecreëerd voor wat wij commerciële, collectieve actie noemen. Het is gewoon een kwestie van tijd en dan zal het zich gaan uitbreiden.'
Op sociale netwerken delen mensen nu nog vooral foto's, maar straks gaan ze samen online ondernemen
De opkomst van Web 2.0-organisaties zal volgens Shirky leiden tot destabilisering van arbeidscontracten; mensen trekken van organisatie naar organisatie.
Copyright (c) 2009 Het Financieele Dagblad
Wednesday, January 14, 2009
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
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
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