How is it possible for a local company to defeat global giants like Pepsi, Coca-Cola, and Watsons in your market segment and establish market leadership for more than a decade? The answer is given by Nongfu Spring, a Chinese company in manufacturing and retail industries. In my recent report “Case Study: Technology Innovation Enables Nongfu Spring To Strengthen Market Leadership”, I analyzed the key factors behind their success, and provide related best practice from enterprise architecture perspective. These factors include
Business strategy is enterprise architecture's top priority. EA pros often need to be involved in project-level IT activities to resolve issues and help IT teams put out fires. But it's much more important that architects have a vision, clearly understand the business strategy, and thoroughly consider the appropriate road map that will support it in order to be able to address the root causes of challenges.
Agile infrastructure sets up the foundation for scalable business growth. Infrastructure scalability is the basis of business scalability. Infrastructure experts should consider not only the agility that virtualization and IaaS solutions will provide next-generation infrastructure, but also network-level load balancing among multiple telecom carriers. They should also refine the network topology for enterprise security.
Ten years ago, open source software (OSS) was more like a toy for independent software vendors (ISVs) in China: Only the geeks in R&D played around with it. However, the software industry has been developing quickly in China throughout the past decade, and technology trends such as service-oriented architecture (SOA), business process management (BPM), cloud computing, the mobile Internet, and big data are driving much broader adoption of OSS.
OSS has become a widely used element of firms’ enterprise architecture. For front-end application architecture on the client side, various open source frameworks, such as jQuery and ExtJS, have been incorporated into many ISVs’ front-end frameworks. On the server side, OSS like Node.js is becoming popular for ISVs in China for high Web throughput capabilities. From an infrastructure and information architecture perspective, open source offerings like Openstack, Cloudstack, and Eucalyptus have been piloted by major telecom carriers including China Telecom and China Unicom, as well as information and communication solution providers like Huawei and IT service providers like CIeNET. To round this out, many startup companies are developing solutions based on MongoDB, an open source NoSQL database.
Familiarity with OSS is becoming a necessary qualification for software developers and product strategy professionals. Because of the wide usage of OSS among both vendors and end users, working experience and extensive knowledge with OSS is becoming a necessary qualification not only for software engineers, but also an important factors for product strategy professionals to establish appropriate product road maps and support their business initiatives.
If your organization is like nearly every other one I've talked to in the past 20+ years, you have a spaghetti chart of integration connections between all the siloed applications that run your business. Your customer is fractured across five applications. Your fulfillment process is broken across eight applications. Just try to pull together the data necessary to tell how profitable one of your products is. Or, as you implement mobile, external APIs, custom B2B connections, and more, how will you provide consistent, coherent access to your transactions and data?
Making sense of all the mess has been an important priority for years. The question is "how?" Forrester's latest research finds that it's time for a new kind of integration strategy. We call it "Digital Business Design":
A business-centered approach to solution architecture, implementation, and integration that brings business and technology design together by placing design priority on user roles, business transactions, processes, canonical information, events, and other business aspects that embody a complete definition of a business.
Think of a medieval fortress: It was originally used for a small army, it has walls nine meters thick, and it’s surrounded by buildings hundreds of years old. Upon entering, you are confronted with the concept of eternity.
This fortress is located in the smallest state on earth — though it is also perhaps the best-known state in the world. The business housed within the fortress is what many might classify as a SME but with with complexity of a large enterprise, holy but busy, centralized but truly global — its work spans hundreds of countries with hundreds of currencies and hundreds of languages — and it serves very special and demanding clients.
Have a clue yet of where we are?
Zoom on Italy, then zoom on Rome, then zoom on Vatican City, and you can’t miss the round tower (Torrione Sisto V) where the Vatican Bank, or Istituto per le Opere di Religione (IOR ), is located. You won’t be allowed in if you are not a client, an employee, or part of a religious congregation. Change comes hard to institutions this steeped in tradition. To give you a clue, IOR’s previous managing director spent his entire career at IOR — 60 years — and retired at the age of 80. We all know it’s the soft and cultural aspects of transformation that are the hardest part for any organization.
Nevertheless, IOR has been going through a major change since 2008, working to replace its legacy IT system with a modern BT one. The new BT system brings more flexibility for the business, richer business functionality, and greater integration and development capabilities. Enabling fast change is the key driver for IOR’s IT transformation program from IT into BT.
Forrester’s Forrsights Software Survey, Q4 2010 has quantified for the first time how enterprise demand is shifting from traditional licensing models to subscriptions and other licensing models, such as financing and license leasing. However, the shift to subscriptions for business-applications-as-a-service is the major driver of this change. Traditional enterprise licenses are slowly decreasing, and Forrester predicts that subscriptions for SaaS applications will drive alternative license spending up to 29% — as early as 2011. This demand-side change goes beyond front-office applications like CRM. In 2011 and 2012, enterprises will opt for “as-a-service” subscriptions for more back-office applications, such as ERP, instead of licensed and on-premise installations. Detailed data cuts by company size and region are available to clients from our Forrsights service.
Base: 622 (2007), 1,026 (2008), 537 (2009), and 930 (2010) software decision-makers predicting license spending for the coming year Source: Enterprise And SMB Software Survey, North America And Europe, Q3 2007; Enterprise And SMB Software Survey, North America And Europe, Q4 2008; Enterprise And SMB Software Survey, North America And Europe, Q4 2009; Forrsights Software Survey, Q4 2010
What does this means for existing independent software vendors (ISVs) and infrastructure vendors?
Can you remember a year when your business both (1) grew in a healthy way and (2) changed more slowly than the year before? Besides a company’s early startup years, such would be the exception, not the rule. So, in 2011, your business is likely to continue accelerating its pace of change. A recent Forrester report, The Top 15 Technology Trends EA Should Watch: 2011 To 2013, named both business rules and SOA policy as items for your watch list — because both of them help accelerate business change.
Back in the mainframe days — and even into minicomputer, client/server, and Web applications — nearly all of the business logic for every application was tightly wrapped up in the application code. A few forward-thinking programmers might have built separate parameter files with a small bit of business-oriented application configuration, but that was about it. But, business changes too quickly to have all of the rules locked up in the code.
Some have tried the route that businesspeople ought to do their own programming — and many vendor tools through the years have tried creatively (though unsuccessfully) to make development simple enough for that. But, business is too complex for businesspeople to do all of their own programming.
Enter business rules, SOA policy, and other ways to pull certain bits of business logic out of being buried in the code. What makes these types of approaches valuable is that they are targeted, contained, and can have appropriate life cycles built around them to allow businesspeople to change what they are qualified to change, authorized to change, and have been approved to change.
Software AG announced today a significant change in their executive structure. After the acquisition of webMethods back in 2007, the second largest software vendor in Germany acquired IDS Scheer last year, at topic we explored already in this report.
If you follow Software AG over this time, you might realize that the way CEO Karl-Heinz Streibich runs a post merger process may involve dramatic disruptions in the executive structure of the company. Dave Mitchell, the former webMethods CEO left some months after that acquisition. Today, the Chief Product Officer, Dr. Peter Kürpick surprisingly left the company. Peter was a member of the executive board since 2005, and, although his contract officially runs until 2013, he is leaving at his own request immediately. He stood for the successful turnaround of Software AG’s product strategy and repositioned Software AG from an outmoded mainframe shop into a leading global integration player. The successful merging of Software AG’s mainframe and integration know-how with the newer webMethods product stack into one interoperable integration stack was one of Peter’s major achievements. Peter also took over the responsibility for Software AG’s ETS (mainframe) product strategy after the integration business reached a solid stability. He would have had the skills and experience to create a consistent technology stack spanning from the mainframe over the WebMethods integration up to the business architecture tools of IDS Scheer (ARIS).
I'll soon have a client report out with interesting Forrester data about how SOA adoption continued apace during the Great Recession. In the meantime, Forrester partnered with TechTarget on a different SOA survey, primarily to TechTarget's readers, wherein we asked a wider range of SOA questions. The bottom line of all this data is that SOA is alive and well.
SOA's strong health is not a surprise (at least not to Forrester), but something else very interesting came out of the survey. To the question, "What is the most significant challenge you are facing with your SOA project/initiative?" the top response was not really about SOA. Instead, by a 2:1 margin over the next response, the biggest challenge was, "Designing how to do SOA in an integrated way with other initiatives (e.g., BPM, events, BI, rules, etc.)." (I describe this in more detail in a write-up over at SearchSOA.com -- you have to register to read the full article.)
In other words, people are realizing that, in a multi-technology world, siloed approaches to individual technology areas won't cut it. This is the fundamental insight driving Forrester's development of Digital Business Architecture (see Forrester report) and Business Capability Architecture (go to blog post or to another blog post).