Flogging business outcomes – new words, old ideas, better result?

third platformAs analysts rally behind established buzzwords like social, mobile, cloud and big data in what IDC describes as the ‘Third Platform’ which Joe McKendrick described as ‘big/hairy,’ I wonder whether we’re simply seeing the latest in not-so subtle marketing of old ideas, repackaged for the 21st century CIO terrified of being rendered irrelevant. Today, the mantra is one of ‘business outcomes.’ Sound familiar?  It should.

Way back in the early 1990s, I well remember business process re-engineering – BPR – being held out as the big driver for success. The idea was simple and attractive: invest in technology and you will be more efficient. Scrape off the gloss and business was being sold productivity. That’s polite business speak for reducing headcount, mostly by eliminating manual business processes and the jobs that go with it. As a consultant with an accounting background, the idea held tremendous appeal. We bean counter types like nothing better than to hammer cost. It’s a good business outcome.

And so – to butcher an old saying – a thousand ERP implementations were launched upon an unsuspecting world.

Looking back, we were all naive, not realising that the promises ran way ahead of the realité. Even now and some 20 years later, we regularly witness project failures and/or find that the cost of running those ERP systems is little short of an embarrassment.

Having found a glimmer of hope in making accounting look good, we then proceeded to automate sales force management under the equally alluring moniker – CRM – or customer relationship management. As executed, CRM was never anything to do with customers or managing relationships. It was about managing internal sales processes and that somewhat rebellious lot aka ‘sales.’ Again, an attractive proposition – at least from a management standpoint. That didn’t go so well either with systems that were at best clunky and at worst unusable.

In parallel, we took a tilt at HR, conveniently forgetting that most companies struggle to know headcount except perhaps once a year. The problem was compounded by the fact chunks of HR and especially payroll frequently fell under the purview of CFOs. Hands up all those who know an HRM group that’s an adjunct/subservient department wrapped around finance rather than a strategic function?

While some companies set out ‘one stop shop’ strategies that meant an SAP, IBM or Microsoft became preferred suppliers for major functionality, no company on the planet ever went wall-to-wall with one supplier. Tens but often hundreds of applications were taken on board, either knowingly or not.

Along the way, some IT departments realised that extracting value from all this ‘stuff’ meant finding common data that could be usefully pulled together. Data about sales productivity for example would likely need to come from at least three or more systems. That opened the door to a burgeoning business in data and process integration.

Fast forward to more or less now and we have IDC promoting the concept of the ‘Third Platform’ outlined above. Sure, there are plenty of businesses that are moving beyond cost reduction and internal productivity gains to looking at technology as a revenue driver and/or way of reaching the extended business ecosystem of partners. But in doing so, I wonder whether they are forgetting that at some point, it all has to come together. As one executive put it to me – are we thinking about data integration or processes or both?

The analyst rhetoric swerves towards data because that fits into several of the Third Platform buckets and specifically today’s buzz phrase de jour: ‘Big Data’ admixed with a dose of ‘social.’ It’s a relatively simple concept to grasp that has been enthusiastically received with data visualisation companies showing how a modern interface that takes cues from mobile users can provide a compelling solution that is well received. Given past experience, it is no surprise that buyers are willing to buy into these solutions pushing vendors like Tableau into record earnings.

Where things get tricky comes in figuring out what happens next. In IDC’s scenario, the world is characterised as one where everyone has an appetite for applications available pretty much anywhere and on any device. The idea has a certain allure but right now we seem to be in something of a hiatus.

The established vendors, including the growing cloud companies, continue to evolve existing offerings while dabbling in the ‘new.’ Much of the real action is happening inside companies willing to develop their own technologies. It’s not a case of ‘ERP is dead, long live ERP,’ more a case that industry and business specific expertise does not exist inside the large vendors to the extent needed.

digital enterpriseHoming in on this landscape, Karl-Heinz Streibich, CEO Software AG persuaded Vinnie Mirchandani to turn this trend for disparate technology development into a book – The Digital Enterprise. In one review, Sadagopan gets excited with the prospect:

It must be noted that a sustainable edge comes in where the inane physical resources mutate with the vibrant digital information to create new value. Winners in doing this get there by thinking big and small together transforming processes, creating/validating/rebooting business models and enabling new waves of customer experience. Any company large or small, old or new can use this digital technology to create a winning edge for its business and perhaps, its industry.

While the book is packed with eye popping examples of where companies are putting their R&D investments the integration hook has the effect of turning the book into an interesting marketing exercise. From Joe McKendrick’s excellent review:

To get to this realm, Streibich and Mirchandani urge enterprises to first look at the developing a digital platform, built on top of existing IT application environments. A digital platform should include an “integration bus as a backbone, business process management platform visualization/analytics, and the big data management layer,” the[y] explain. Focus on rolling out digital capabilities on a department-by-department basis.

I’m not sure this is right. While departmental rollout is a relatively easy approach and a model reflected in some of the examples, the integration elephant in the room would suggest that the future requires a much more granular mixing of both the old and new in both data and process. There are plenty of signs this is on the minds if not lips of CIOs.

In a recent consulting engagement, we discovered that despite rhetoric to the contrary, integration between cloud services, even when they exist on the same platform, is far from easy. If anything, the rats nest of technologies is getting more complex. In my consulting case, we went as far as to speculate whether a wholesale refactoring might not represent a better long term outcome.

My concern is that we run the risk of repeating the mistakes of the past by concentrating on what end up as short term point solutions and fixes rather than thinking through the full impact of technology driven digitization. Streibich never takes us on that journey although I wish he had.

Quite how this works out is far from certain. It might for instance mean that CIOs concentrate on exposing essential data and processes from back end systems as a staging point for expansion into new services. After all, everything ends up in a financial transaction. Right? On the other hand, perhaps we should consider Sig Rinde’s world of Barely Repeatable Processes.

Whatever route CIOs choose, I would argue they have never been more relevant. They, after all, will be the ones who have to clear up the mess that LOB leaves behind. They will be the ones who have to make the ‘big/hairy’ decisions that turn current advantage into sustainable, technology driven growth.

Den Howlett
Following 20+ years in finance and IT related roles, Den Howlett became a freelance writer/analyst/commenter specialising in enterprise IT. I co-launched Information Week in the UK (1996-7) and was a contributor to numerous UK based trade magazines. Most recently, he was a long term columnist on ZDNet. Today, Howlett provides strategic product direction support to a variety of enterprise vendors along with delivering M&A due diligence services. The raw idea for diginomica came to him at a time when enterprise topics in media were being crushed by consumer stories. There had to be a better way. diginomica is that better way.
Den Howlett

@dahowlett

Disruptor, enterprise applications drama critic, BS cleaner, buyer champion and foodie trying to suck less every day.
Den Howlett

Leave a Reply

  • dahowlett says:

    dealarchitect – aaaah….now there’s a thought – I guess I’m conditioned to think .com first – I’d better let Jude know cuz she’s a big AMZN spender !!

  • dealarchitect says:

    dahowlett Dennis, thanks for screen shot. It’s because you went to amazon.com, the US site and they converted for currency and likely some local “floor” pricing.  
    In Spain if you go to amazon,es or in Germany go to amazon.de or in france to amazon.fr it should be priced as EU 3.99 for Kindle version.

  • dealarchitect says:

    dahowlett dealarchitectDennis, I will pass along your feedback to SAG and have a salesperson call you :)

    If easy, please email me screenshot of amazon page with that price and I will try and find answer. I downloaded to my Kindle from US site couple of weeks ago and checked again this evening and it stayed at US $ 3.99

    Hard copy pricing does very by region because shipping/custom etc costs vary but eBooks not as much. Of course with the Apple eBook price fixing investigation, even that is more complex these days.

  • dahowlett says:

    dealarchitect  AMZN changing price by IP address is not unknown. I see that all the time. Even so it is a small price to pay for a very good book.
    You/I will have to disagree. I know how you work with customer stories so all is good there. Even si, that’s a marketing position – I know – we do that too,  Not the point. 
    Knowing SAG, if they had made that claim I would have been far more severe in my critique. But…I wish they had taken the argument forward in a way where I could say: “Hmmm…let me understand more.” This is really important IMO. 
    Easy to be enamored by the glitz and glamor you see…realité is often somewhat different. My sense is that SAG could have put a solid stake in the ground – but chose not to. Heck – am I suggesting SAG needs to market? ;) Perhaps…

  • dealarchitect says:

    Dennis. amazon.com shows US $ 3.99. Amazon,de EU 3.99 so not sure where you get $ 6.99 unless amazon is varying prices by IP address

    On SAG not pushing integration or business process management or any of their value points, actually I was impressed. Most vendor execs cannot stop talking about their products, Karl Heinz repeatedly told me focus on the customers interviewed and their projects – don’t lead them to talk about SAG products. A few of them mentioned SAG  products on their own, others did not and the book reflects those conversations.

    Integration is an on going journey for most vendors – and we have barely accommodated new social, sensory, machine sources of data so a glib “we have integration cracked” positioning from SAG would have not been helpful in my opinion.

  • dahowlett says:

    dealarchitect  Vinnie – please let’s not get into a fight about what the book was about. Instead, please accept my critique for what it is. 
    Of course the book is a celebration – I totally get that as I am sure most readers will as well. And we all applaud that outcome. 
    Where it falls short is in SAG not pushing home the integration issue. It’s been missed on every major tech iteration and I see this as a lost opportunity to make that an imperative. 
    As to pricing – I see AMZN rpcing at $6.99…is there a code somewhere?

  • dealarchitect says:

    Dennis, integration between cloud services while clearly an important topic is the least of the focuses of the book, The Digital Enterprise. 
    Karl-Heinz Streibich, the CEO of Software AG and author of the book, gave me fairly free rein to interview some of the biggest brands in the world about where they are innovating. Most of them talked about tech/ip in their products (GE, Nissan), services (Mapfre about telematics in auto insurance. Allianz use of data for new insurance products). tech to redefine go to market (like Coca Cola Enterprises), in their global ops (StatOil expanding beyond North Sea, Standard Chartered’s mobile app for several emerging markets), facial recognition (Echo), machine to machine networks (Daimler) and on an on.

    So the book is about celebration of the corporate technologist who does not get much recognition in a world where vendors and VCs get most of the print. Your readers will benefit from a very different POV and it’s only $ 3.99 in the Kindle store and Karl Heinz is donating the net proceeds to charities – so all the way feel good proposition!

  • RickBullotta says:

    @swardley dahowlett diginomica instead of focusing on a few “big outcomes” think about how an app economy around a “designed for extension” platform can create millions of “micro outcomes” whose aggregate value and differentiating power FAR exceeds what you get from implementing generic core apps.

  • RickBullotta says:

    @jezhumble dahowlett swardley  Integration and complexity can well be the differentiating competitive advantage a business needs.  Cookie cutter implementations = ZERO incremental advantage.  Thus the “millions of apps at the edge” – these are where real value can be created.  Integration can be done right.

  • Olivermarks says:

    I’m planning on writing a review of Vinnie’s latest book on ZDNet when I get time, thought it was a useful reference. As I briefly mentioned typing on Skype earlier this week Den I’m heading up Global Digital Enterprise consulting at HP which we believe is all about the great convergence of mobility, social, cloud, data analytics et al to provide contextual solutions to specific business problems.
    There’s quite a difference between analyst reads and perspectives on how the world is evolving and what is actually happening in the coming weeks and months in companies to create relevant strategies and tactics around digital transformation/digital enterprise/ ‘the third way’ (which sounds a bit ‘Close Encounters of the 3rd kind’ like to me) to solve real business problems…also as always lots of posturing and postioning around buzz words out there and a core of people who are actually doing real work to orchestrate viable work and information flows inside real companies.
    Very interesting times in this area and I will be reappearing in the digital soup to discuss in the coming weeks after a lengthy hiatus….

  • swardley says:

    dahowlett : … the latter results in a demand for a new platform to cope with the changes five years after the first platform is created.

  • swardley says:

    dahowlett : … and whatever platform is built, no means of identifying emerging patterns and converting to services.

  • swardley says:

    dahowlett : problems boil down to inability to identify value, tendency to customise, conflict within internal processes …

  • swardley says:

    dahowlett : outcome based models are just a rehash of decade old techniques. It’s fine but when people dress it up as ‘new’ … /yawn.

  • jezhumble says:

    dahowlett swardley Thanks, this is so timely as I’m currently writing about this very issue.

  • jezhumble says:

    dahowlett swardley Right on. People ignore integration costs and fail to prevent LOB from constantly adding complexity.

  • dahowlett says:

    swardley Blimey – 5 yrs on and all change/no change eh?

  • swardley says:

    dahowlett diginomica : the same problems will occur today with outcomes as occurred with worth based development – http://blog.gardeviance.org/2008/09/sound-advice.html