Getting to know business systems, the new IT kids on the block

A couple hundred people from some of the hottest companies in Silicon Valley gathered in a venue at the seedier end of Market St in San Francisco earlier this week to discuss the future of enterprise IT. As a fly-on-the-wall observer at this first-of-its-kind event, I hadn't been sure what to expect. But as the day drew to a close, I realized that I'd had a glimpse of how the IT function will ultimately emerge from its struggle to adapt to the demands of a digitally connected world.

In the run-up to this gathering of self-styled business systems specialists, I'd conceived of this emergent role as a kind of formalization of shadow IT. These people have settled on 'business systems' and 'business technology' to describe what they do because it emphasizes the contrast with the old world of 'information systems' and 'information technology'. They see themselves as embedded in the business and focused on its goals, rather than operating in a discrete functional silo. But when the conference opened with a session led by two CIOs, it brought the bigger picture into focus.

I realized this movement is the latest iteration of the multi-year quest for alignment between the IT function and its business partners. The business systems model is far more radical and transformative than earlier attempts, but it is born of necessity. It is forged under the pressure of three powerful trends reshaping the nature of IT — the mainstreaming of SaaS for application delivery, the rise of agile and DevOps approaches to IT delivery, and customer demands for increasing agility and responsiveness in business delivery.

Large-scale SaaS adoption

Mark Settle, veteran CIO and author of Truth from the Trenches: A Practical Guide to the Art of IT Management, opened the event by underlining how new this phenomenon still is. Business systems specialists are early pioneers on a journey that's not yet mainstream. Whereas most enterprises today will feel they're being adventurous if they have as many as a dozen or more SaaS applications, he recalls a much broader landscape when he joined identity management vendor Okta as CIO four years ago. At that time the company had 800 employees, a turnover of around $300 million, and was using no less than 400 SaaS apps and services, of which around 150 could be considered core applications for the business. SaaS adoption on this scale fosters the development of business systems skills to manage such a diverse application landscape.

Speaking in a later session, Mandy Shimshock, Director of IT Business Applications at CRM vendor Zendesk said that all of its internal applications are SaaS. She outlined how her team runs quarterly reviews with vendors of their core applications, explaining that up to a fifth of the total change every year, either because they become redundant or as better alternatives emerge. This reflects the faster pace of business and technology change in today's world, she explains:

We've all seen this has changed the role of a CIO or an IT leader. A couple of decades ago, when a CIO was making a decision for an application, they were making it for at least a decade for that ERP or HR software. That's no longer the name of the game here. At this point, things are moving really quickly, and so you have to be agile with how you're selecting your tools and getting them up and running.

Delivering solutions at speed

Business leaders and line-of-business managers are no longer willing to wait for extended waterfall-style implementations, says Eric Tan, CIO at SaaS procurement platform Coupa, who joined Settle on stage for the opening session:

The expectation is, 'Hey, how long is it going to take you to solve this problem? If it's anything more than two months, I don't want to hear about it.'

Business people also want to hear the practical real-world impact of any new technology projects, he adds:

None of this digital transformation nonsense. This automation project, we'll have one, two or four guys focused on it, a three or four week window, maybe one or two sprints, the value I'm going to get back is half an FTE. That's real, tangible value that you can see really quick.

The event was focused on practical business goals in every session. Even when speakers from Atlassian, Google and Slack joined a panel on the use of automation, AI/ML, and bots, the discussion revolved around the productivity wins achieved, and a realistic assessment of what the technology can contribute. Other sessions focused on line-of-business topics, from automating the flow and accuracy of leads from marketing into sales, speeding recruitment and onboarding processes in a fast-growing business, to automating monthly close processes in the finance team so that customer account managers can see business metrics several days earlier.

Much of the content was about lessons learned, pitfalls to avoid and how best to add value. Business systems professionals are keen to use their understanding of the business to find ways to make the technology support it better. Settle believes it's important to look beyond individual functional silos and take a holistic view of processes that cut across different parts of the business. As business systems specialists find their feet in the role, they have the opportunity to be proactive in finding new opportunities for automation that their business colleagues may not have realized exist.

My take

I'm sure that some will dismiss the emergence of business systems specialists as a solely Silicon Valley phenomenon, limited to high-growth tech companies with more funding than sense. I disagree — and I also suspect that there are many more businesses outside of the US-101 corridor, and around the world, that are starting to adopt this model than Settle implies. Indeed, the Business Systems Community, which organized the event with support from workflow automation vendor Workato, has already formed chapters in New York City and Boston as well as its core Bay area base. 

The most important factor driving this trend from a technology standpoint goes beyond simply the mainstreaming of SaaS. There's also the accompanying move towards more of an API-centric infrastructure that makes it much easier to connect across multiple SaaS applications and other serverless functionality, as I've written previously.

The componentization of functions and data brings with it a second driver in how IT projects are delivered. Automation initiatives and new functionality no longer have to languish in a queue awaiting delivery at some undefined and unexplained future date. Instead, the work can be divided up into smaller chunks and delivered in short sprints that keep business partners engaged in ensuring the outcome matches their needs.

From listening to the various sessions, I got the sense that this is the aspect of business systems methodology that is least standardized at present. That's in part because the teamwork processes refined within agile and DevOps teams are still unfamiliar outside of the software engineering realm — but that too is starting to change as product, marketing and even HR teams begin to embrace agile teamwork.

The final element is the external competitive pressure on all businesses to become more agile and responsive in a digitally connected world. This cannot be achieved without technology, but the old methods of delivering tech are not fast or flexible enough. By the end of the day I realized that what I was seeing was IT transforming to go beyond alignment and actually become absorbed as an integral part of business operations.

The final session in which line-of-business managers spoke about their experience of working with business systems folk reinforced this impression. The conversation ranged across topics such as how to build trust and transparency, developing a shared vocabulary and better understanding each other's constraints and goals. From their perspective, this was not shadow IT but integral IT, working to help the business operate at its best.

I'll have more from some of the individual sessions in future posts.