Shared Vocabulary for Business Innovation and Modernization

Do you remember when computers were hard to use? In fact it’s just nine years since a GM press release asserted that if they developed technology like Microsoft, we would all be driving cars that for no reason at all, would crash twice a day, shut down and refuse to restart. Since then Apple has showed Microsoft the way, and we all use smart phones, tablets and PCs that are genuinely easy to use and remarkably resilient.

Because of this great leap forward in personal device usability the smart phone user on the proverbial Clapham Omnibus might reasonably expect that enterprise systems should be similarly easy to use and resilient. Unless of course she was a customer of the Royal Bank of Scotland (RBS), in which case she will have painful memories of last year’s high profile failure caused by the core banking system crash which corrupted tens of millions of accounts.

Once upon a time banks in general were regarded as leaders in the use of information technology. Yet last year several high profile systems failures signalled that banking systems, far from being leading edge, are in rapid decline. Banks aren’t the only culprits. Along with the banks, insurance companies, retailers and others are starting to offer their customers smart phone apps, notwithstanding that behind the scenes their enterprise systems are frequently held together with sticky tape and sealing wax.

The reason many enterprise systems are in such a poor state is commonly because there are three parties involved in managing the enterprise systems that have widely divergent goals and objectives. The line-of-business manager typically views the systems as support to the business process and a cost to be managed. The IT Architect views the enterprise systems as a set of capabilities that must be progressively modernized to support business innovation. The IT Project Manager is focused on delivering projects to time and cost.

These views are of course diametrically opposed. And under cost and time pressure the Architect is frequently the lower ranking player. In consequence the immediate needs of the business overrule longer term objectives of modernization, reduced complexity, flexibility and even cost of ownership.

The real issue is that the three parties do not have a shared view of the business problem. The line-of-business manager’s business process view does not correlate at all to the delivery project. The Architect should be the evangelist for business innovation and modernization but he or she is too easily squeezed in the cost and time discussion. And the Project Manager typically does not share the detailed technical project view with the line of business manager, and argues for a solution specific architecture that reduces project risk. The result is the existing enterprise systems get more complex and slower to respond to change. And the IT industry has been doing exactly this for as long as anyone can remember!

It’s extraordinary, but with all our high tech knowledge and skills we don’t have a vocabulary to articulate the business problem in a way that allows effective communications between the participants. Many IT organizations have embraced services as a way to organize systems capabilities more effectively. These might be Web Services or APIs or referred to collectively as Service Oriented Architecture (SOA). But, even if these software services are architected to align with business perspective, they are always managed as a technical matter, defined and managed by the IT organization.

Yet line-of-business managers do understand services as a business concept; virtually every business product today has a service component to it. The global service provider industry has formed around this idea, and in the UK today service industries account for 77 per cent of the economy. So while IT and business share the common underlying concept, at the practical level there is no meeting of minds.

In order to create a better bridge between business and IT we need to work with both the “how” and the “what” the business is, and we can do this by complementing business processes with business services. Business services are a very natural way to talk about “what” the business does today and tomorrow, while business processes focus on the “how”. Because you don’t reinvent an industry by just analyzing business processes, you also need to evolve and innovate with improved and new business services.

A good example of a service oriented business is Amazon.com Inc. They are well known as a service provider because they have constructed the Amazon enterprise as a set ofbusiness services which are offered to various external parties – enabling suppliers to sell second hand books or electronic goods on the Amazon platform; or providing data storage and Cloud computing services to other enterprises. The Amazon business services combine the compute and the business service integrating the commercial contracts, business processes, people, physical assets as well as the service interfaces that enable computer to computer or computer to device communications.

 Using a common business and IT concept permits sensible analysis of whether a service is just a unit of cost, or what the strategic value is now and in the future, and what it adds to the business value chain. Given so many line-of-business managers are thoroughly familiar with the very high technology in their smart phones and other devices, it really is time for IT to treat the business as a mature partner and for the line-of-business manager to take real responsibility for the business service as a whole product.

Increasingly we see a convergence of IT and business organizations. The business service concept is an essential piece of vocabulary to focus on a business innovation and get everyone singing off the same hymn sheet to potentially huge advantage of the business. Just look at the Amazon example!

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We will be running a workshop that explores these ideas in London in April in conjunction with the IASA UK Summit. If you can’t make the London event, (for geographic of schedule reasons) talk to me about how we can accommodate.