Stuck In Cement: When Packaged Apps Create Barriers To Innovation

Craig Le Clair

My “Stuck in Cement” research is up on Forrester.com today. I have to say, I really wrestled with the title. It’s just incorrect to say “stuck in cement,” because technically cement is only the active ingredient and needs to be mixed with sand and water to make concrete. So it should be “stuck in concrete,” although somehow this doesn’t quite sound right. But really, who but a chemist would lose sleep over this or even catch the distinction? The real issue is whether packaged apps really are a barrier to innovation at this point — or does our research just reflect the high level of frustration that our clients feel trying to manage technology in a world changing so quickly?

The basic idea is that industry-specific or packaged apps — and these are currently mostly on-premises applications — aligned with organizational silos have worked well for well-defined, highly structured processes where volume, scale, and straight-through processing dominate system design. But these apps are difficult to change, appear increasingly less relevant, and form a barrier to innovation for companies in fast-moving industries like energy, healthcare, and financial services now facing advancing consumer technologies that threaten business as usual.

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A BPM Prediction For 2012: Connecting The Dots

Derek Miers
Reading the recent Harvard Business Review article from Tom Davenport et al., it occurred to me that next best offer (NBO) is actually a subset of what my colleague Jim Kobielus calls “next best action” (NBA). And when you couple that predictive thinking with advances in process mining (see Wil van der Aalst’s post and the Process Mining Manifesto), it clearly becomes possible to optimize operations dynamically on the fly. First of all, the organization could mine the existing system (the transaction logs of traditional systems or a newly implemented BPM/CRM system) to identify what happens today. This then enables you to identify the outcomes that are most interesting (or those you want to achieve) and then optimize the NBA accordingly.
 
We take for granted a process definition where the next action is predetermined by the arc of the process definition. But if we can do NBO in 200 milliseconds, we can also do NBA in a similar time frame. Directed arcs in process models and the business rules that go with them start to become a little redundant. This sort of combination (mining and NBA) enables wide-open goal-oriented optimization for all sorts of processes, not just those related to marketing and cross-sell/upsell ideas.
 
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A Copernican Shift (And A Tip Of My Hat To Randy Heffner)

Brian  Hopkins

As my first calendar year as an analyst draws to a close, I wanted to thank everybody who has read and commented on my blog and say that I look forward to even more next year. In closing out the year, I turn for a moment away from emerging technology to share an email I wrote to one of our clients in response to some questions he had about the changing nature of EA. In describing the future, I'm going to blatantly pirate a term that Randy Heffner has been using for a while because as I sought to answer this client's questions, I realized how absolutely spot on it is. here is the relevant text of that email:

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Happy to answer your questions as outlined below in the inquiry request. We have published a report along similar lines, BT 2020: IT's Future In The Empowered Era, that I recommend for additional ideas. Regarding timing, 2015 will be a stepping stone towards 2020, so I’ll focus answers on 2020, and you can extrapolate to 2015 in terms of the migration that needs to occur.

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Business Architecture Is The Foundation For EA – Join Our BA Research Team

Alex Cullen

Awkward title, I know. But this blog is about two related points. 

Forrester has long believed that business and technology have become inseparable. The Business Technology organization that embraces this reality is replacing the Information Technology organization that thought of itself as separate from business.  

Enterprise architecture is also shifting — from a technology and application-centered function (“IT architecture”) where the business was simply a source of requirements to a business-focused, strategic, and pragmatic discipline broader than the team called EA. We see signs of this shift everywhere — just look at the winners of the 2011 InfoWorld/Forrester Enterprise Architecture Awards. 

As part of this shift, business architecture has become the foundation of enterprise architecture — making possible strategy, planning, and change management of the fused business+technology reality of today’s enterprises. Forrester’s Enterprise Architecture research focus is to help our clients make this shift, providing them with best and next practices ranging from removing barriers between business and architecture, to creating frameworks and models that provide insight and drive decisions, to measuring and communicating benefits.

Which is where the second part of this post – and potentially you who are reading this – come in. We are expanding our business architecture research team to deepen depth, utility, and value to our clients. 

If you:

  • Are “business first and center” in how you think,
  • Have your own ideas and want to refine them as part of a team to create a body of research more impactful than any single analyst can create,
  • Want to engage with clients both to advise them and to learn from them,
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The State Of Enterprise Architecture In 2011

Alex Cullen

To paraphrase a now-marginalized US political figure: “How you’all doing?”

Every year, Forrester’s Enterprise Architecture team looks at how enterprise architecture, as a practice and a function within business, is doing. We look at everything from how firms organize their EA programs, to where they are getting their support from, what roles exist within the EA team, completeness of architecture and the degree of standardization, expected technology change, and priorities and challenges. We ask the same questions year over year to discern any trends.

On December 9, we’ll be presenting the results of the 2011 State of Enterprise Architecture survey, compiling the inputs from 543 firms across North America, Europe, and Asia/PAC. (Note: this teleconference is for Forrester clients. A separate teleconference will be offered for non-client respondents to this survey.) A wide variety of industries are represented: financial services, manufacturing, retail, business services, and public sector. A few highlights:

  • The structure of firms’ EA functions continues to shift – with both centralized and completely decentralized increasing. 
  • Architecture staffing continues its growth. The business architect role is one factor driving this growth. 
  • Awareness and support by the broader business and IT organization continue to climb – both by the CIO, other IT functions, and by line of business management. 
  • Drivers for EA show a significant shift – with “improving business agility” rising to the top. 
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Rethink Your IT Strategy If You’re Serious About Cloud

Brian  Hopkins

Cloud – people can’t agree on exactly what it is, but everyone can agree that they want some piece of it. I have not talked to a single client who isn’t doing something proactively to pursue cloud in some form or fashion. This cloud-obsession was really evident in our 2011 technology tweet jam as well, which is why this year’s business technology and technology trends reports cover cloud extensively. Our research further supports this – for example, 29% of infrastructure and operations executives surveyed stated that building a private cloud was a critical priority for 2011, while 28% plan to use public offerings, and these numbers are rising every year.

So what should EAs think about cloud? My suggestion is that you think about how your current IT strategy supports taking advantage of what cloud is offering (and what it’s not). Here are our cloud-related technology trends along with some food for thought:

  • The next phase of IT industrialization begins. This trend points out how unprepared our current IT delivery model is for the coming pace of technology change, which is why cloud is appealing. It offers potentially faster ways to acquire technology services. Ask yourself – is my firm’s current IT model and strategy good enough to meet technology demands of the future?
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Technology Is Everywhere — Are You Paying Attention?

Brian  Hopkins

We are currently in a technology growth cycle, which is likely to continue for another five to seven years.* The opportunities presented by the likes of cloud, mobile, social, and big data are abundant. I'm wondering if EAs are overly focused on consolidation, simplification, and cost control, which could lead to missing the boat. Alternatively, companies may just leave EA behind as they sail to newer, profitable waters.

In Forrester's September 2011 Global State Of Enterprise Architecture Online Survey, we asked architects to prioritize the following challenges, and here is what we found:

 EA Survey Results

While 37% of firms told us that improving how their firms identify and integrate new/disruptive technology was high priority, it was a substantially smaller percentage than the other nine challenges we asked about. Compare this to: 1) a similar CIO survey that ranked business technology innovation as the top priority, and 2) another EA survey question indicating that "using technology to increase business competitiveness" was the number three IT driver for EA programs.

My concern is that other things may be distracting EA attention away from the opportunities that abound in this growth cycle. Consider:

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The Whats Of Insurance Gets Some New Hows

Ellen Carney

One of the things that people like about the insurance industry is that the business of insurance doesn't change much.  Insurance carriers have pretty much done the same thing:  rate risk, issue policies, settle claims, sell through agents, and invest our premiums, all the stuff that makes them insurance companies.  We’ve talked a lot about this idea of “business capabilities” here are Forrester, essentially the notion of what an industry does.  These capabilities change very slowly, if at all.  Capability changes are usually the result of some big structural economic change--think of the now-modern and booming Russian insurance industry growing after the collapse of the former Communist state.  Of course, the way in which those capabilities get executed in a mature insurance market is influenced by what’s going on outside the four walls of carrier and can change very quickly.  

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Let's Redefine The Term "Business Service" To Address Real Business And IT Needs

Henry Peyret

IT has too many separate portfolios to manage, and that hinders its ability to help business change. We have project portfolios, application portfolios, technology portfolios, and IT service portfolios – each managed in silos. These portfolios are all IT-centric – they generally mean nothing to business leaders. The business has products, customers, partners, and processes – and the connection between these business portfolios and the IT portfolios isn't readily apparent and usually not even documented. Change in the business – in any of these areas – is connected to IT only in the requirements document of a siloed project. Lots of requirement documents for lots of siloed projects leads to more complexity and less ability to support business change. 

How do we connect these business concepts to IT? What's the "unit" that connects IT projects, apps, and technology with business processes and products? 

It's not "business capabilities" – they are an abstraction most useful for prioritizing, analysis, and planning. We need a term to manage the day-to-day adaptation and implementation of these capabilities – the implementation with all its messiness such as fragmented processes and redundant apps – that we can use to manage any type of change. 

We believe the best term for this unit is "business services," with this definition:

The output of a business capability with links to the implementation of people, processes, information, and technology necessary to provide that output.

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The Top Technology Trends For The Next Three Years (Part 2)

Brian  Hopkins

As promised in my blog last week, here is part 2. In part 1, I introduced the two trends reports we did this year and showed the list of trends for business technology. These are trends and technologies to consider first with your "business hat" on. This blog post lists the other 10 trends to view first from a technology lens because they are of lower interest or impact to the business.

We have created four new categories to make IT stakeholder identification easier: 1) application platforms will be of high interest to your app dev and management teams; 2) integration will be of interest to app dev, data integration specialists, and even process folks (considering that processes can and should be integrated with apps and data); 3) infrastructure and operations; and 4) mobile computing, which spans infrastructure, app dev, and possibly line-of-business relationship managers who are very keen on mobility. And don't forget your security and compliance stakeholders, who will generally care about all of these!

Before listing the trends and technologies, I also want to introduce a new twist to our research this year - we have identified four major themes that run through many of our business technology and technology trends. These themes are so broad and far reaching that we thought it worth calling them out separately; we are advising our clients to understand these themes as the context for responding to individual trends:

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