On a somewhat irregular basis I update my website. I review my recent engagements to update the ‘News and Notices’ page, and also outline my upcoming public commitments. This makes me think through the work I am being engaged to do, and mull on fresh insights that are emerging.
The first insight that I can share is of a developing opportunity for enterprises and vendors with strong existing relationships to consider tackling the current and turbulent market transformations together, in partnership.
In my May column, ‘Cutting through the cloud’, I detailed how our industry is riding a triple transformation wrought by the impact of virtualisation on the technology delivery landscape, the vendor competitive and contractual landscape, and the enterprise operational, systems and contractual landscape.
The ability now to standardise and highly automate delivery of certain key capabilities is an example of the new era of the high-productivity service factory. This impacts many vendors’ business models: do they invest in their own highly competitive service factories and move to ‘on?demand’ contractual models, or do they start sourcing such services from specialised third parties? And from the enterprises’ point of view, do they end existing contractual arrangements and instead simply source such services directly online?
The reality is that both vendor and enterprise face significant investment in the reworking of strategic business models, personnel and cultural change to successfully ride this triple transformation. The investment will have to be made, and there is no turning the clock back. But if an existing enterprise/vendor relationship is sound, the case can be made for them to co-surf the triple transformation, working with each other to their mutual strategic benefit.
The second insight is that the rapidly developing business model of what I term technology-enabled business services is showing signs of having an even more comprehensive future. We are at home with the lexicology of Infrastructure as a Service (SaaS), Platform as a Service (PaaS), Software as a Service (SaaS) and PraaS (Process as a Service). The concept of taking a specific software and hosting it to deliver its capabilities ‘one to many’ as a service is well established.
I recently recorded a webcast with Muriel Wren, head of Business Address Services, SAP UK and Ireland. Our theme was ‘Operating successes with fine-tuned teams’. My contribution was to work the core strategic issue I have set out above – how to reshape, re-align and fine-tune the enterprise team to successfully navigate the current triple transformation to business advantage. Muriel focused particularly on the new SAP tools in Business Intelligence (SAP HANA, the first fruits of its acquisition of Business Objects) and how to interweave these new BI capabilities into the operations of the enterprise team to fine tune its performance.
In the Q&A part of the webcast attention turned to another recent area of SAP development – Rapid Deployment Solutions (RDS). These are fixed-price, fixed-scope integrated packages designed to address specific business requirements. It's an interesting alternative to the classic resource-intensive ERP deployment.
From SAP’s point of view, this is a development positioned to protect SAP’s licence fee flow – and keep established clients within proprietary SAP architectures. But RDS could potentially be launched as a service (RDSaaS) and given the substantial distillation of operational experience captured in the creation of each RDS, I would position RDSaaS as a new and potentially competitive category of my technology-enabled business services – a practical and creative blend of SaaS and PraaS.
There is linkage between these two insights. The development of both HANA and RDS have drawn deeply, I am sure, on SAP’s ability to work closely with major clients who provide access to the practical actualities of their business operations. Technology is never a driver, rather a tentative enabler that requires the proven experience of actual application and use to validate any potential. The best innovation in our industry comes from close vendor/enterprise collaboration. And one effective response to mastery of the current turbulent triple transformation of our industry’s core modus operandi could well be a parallel vendor and enterprise commitment to a little co-surfing.
Richard Sykes was vice president of IT at ICI in the 1990s and is now a consultant