Who’s in the Driver’s Seat? A New Generation of Dynamic Technology

In an effort to control costs and maximize ROI for purchasing decisions, organizations have gotten themselves into a nasty technology quagmire that significantly impacts their ability to remain competitive. The budget and ROI constraints limited organizations to purchasing technology that solved a narrow business problem – such as sharing data between two different business units or partners, or creating an e-commerce web site. Even when management understood the need to provide an overall strategic plan for creating a future-proof, flexible software environment, the budget simply wasn’t available. Instead, CIOs had to be satisfied keeping the ship afloat with small incremental solutions that allowed their companies to get by.

This has created an environment where companies cannot design the business operational systems they need to meet customer demands. To accomplish this important goal, CIOs must be able to create links across the myriad of narrowly defined applications they have bought and built over the past 20 years. They need to create business process management programs that traverse data and business logic stored in hundreds if not thousands of separate systems. Remember, 20 years ago no one ever would have imagined the need to integrate information from supplier systems with data from customer applications. Today, this is expected. This type of requirement has exploded in an era of global and highly competitive markets where organizations are desperately trying to uncover new channels for selling their goods and services. Management increasingly wants to manage the organization in real-time, rather than waiting until the competition has already begun to encroach on its turf.

For the past decade, companies have relied on systems integration firms to solve the problem of knitting business solutions out of the piece parts. This has been accomplished via either the old-fashioned approach of needs analysis and programming links between systems or with the use of newer Enterprise Applications Integration (EAI) tools. To some extent systems integration has worked well. It has enabled companies to create new systems of record that are based on emerging technologies with existing software. However, there is a downside:

• The time required for a major integration project is out of line with the sense of urgency to move in real-time.
• Integration projects require a consultant to understand the details of the current business drivers in order to create and build a solution. By the time the project is completed 18 months later, it has solved yesterday’s problems.
• The end result of these projects requires the creation of complex code to connect unrelated system. This code is difficult and costly to manage and modify. The price tag for these type of projects continues to escalate as business requirements change.

Given the factors I have outlined above, disparate software platforms that prevent companies from moving quickly to solve business problems are causing a new wave of technology. I envision a new category of software that falls under the broad heading of Dynamic Response Environments. Dynamic Response Environments are a combination of a flexible, standards-based infrastructure and software-based services that can plug into the infrastructure to create a dynamic, real-time computing environment. Many companies currently have the foundation for this standards-based infrastructure, and are beginning to evaluate software applications that resemble the services-based aspect of the Dynamic Response Environment. This is especially important for companies with a large number of stovepiped applications and business practices that need to be integrated because of changing market dynamics. Two such industries are life sciences and financial services.

Which software companies are starting to adopt this approach? Some examples include IBM’s On Demand initiatives, HP’s Adaptive Management Platform, and BEA’s WebLogic Server. In addition, there are many smaller, innovative software companies that are designing software that focuses on different aspects of this problem – ranging from business process management across siloed applications, to systems that dynamically bring components from different systems together with common metadata.

Faced with critical business problems and the need to move in real time, I recommend that CIOs take a fresh look at the techniques they have used to leverage their software assets. Clearly, this is not the era where we can throw old software away and start from scratch. This new approach, Dynamic Response Environments, is a different approach to creating flexibility and reuse. What are the first steps that CIOs should take in order to lead? I recommend three steps:

• Plan an overall software investment strategy should be predicated on being able to change and move quickly. Squeeze vendors on commodity software and invest in dynamic integration approaches.
• Take an inventory of your line-of-business systems. How many narrow, stove-piped applications do you have? What role do they serve?
• Map the results of your inventory against defined corporate goals. Develop some hypothetical scenarios that might happen that are not currently planned for. Once you have completed this mapping, you will have a good idea of how well your environment today can handle the anticipated and unexpected business changes.

This is a time where many organizations are halting their technology purchases and waiting for better times. Whether or not you are in the position to purchase, you should experiment and plan to be prepared to acquire the right type of software that will enable you to move quickly, efficiently, and creatively to meet competitive threats. A new world is coming and you need to be prepared and knowledgeable.

Judith Hurwitz is the president of Judith Hurwitz & Associates, a research-based marketing consultancy focused on the emerging area of Dynamic Response Environments. She can be reached at Judith@judithhurwitz.com