Information technology in Enterprise used to be extraneous – work is here, technology is there. IT departments would bring in new tech or enhance it and then “users” would test it and accept it. That is no longer today’s reality. Cloud, mobile and big data have changed things. Today’s technology is intimate to business, it has been democratized – it is easy to access, uncomplicated and providers have hidden the difficulties of operating it.
I recently read an article about how you could run a small business on your phone. It provided a list of apps that were effective at supporting core business functions – CRM, HR, Accounting, management reporting. It’s astonishing how much functionality has been put into a smartphone and it exemplifies how technology has become commoditized, simplified and thereby democratized.
A few weeks ago, I discussed with a few experts a new technology introduced by SAP – it is called IBP (Integrated Business Planning). It is a business application for supply chain management and it’s not for small businesses, it’s for large enterprises. In the course of the conversation, a Client of mine asked: “and what would be IT’s involvement in all this?”… Great question, huh? What would a traditional IT department do here? If this were an older application by SAP, the answer would be put a team together, set up a project, a substantial budget and probably a year or longer. But IBP is built on a new platform and a new philosophy. So, in the end, there is little for IT to do: SAP provides the platform on a SaaS basis and the tool is for users. I look at it as something akin to Microsoft Excel: a practitioner – an analyst, someone from Finance or Supply Chain – who knows numbers and manipulates data with proficiency, will learn Excel and won’t need help from someone with “technical skills”. The same goes for IBP. It’s as ‘heavy duty’ as any core business application, it is core, but you no longer need the help of people with the skills you would normally find in an IT department.
This is the new world. Software providers have had to put their stuff on mobile platforms. If you sell software, it has to operate on iPhones and iPads. You can no longer build software for the desktop – or for the desk, period. You need to think of the Now-user, the highly dynamic individual on the move who wants to get to his data wherever he is. A smartphone is the simplest thing to use and if you tell someone that he needs training to use your app, he will look for another app. Apps have to be simple and straightforward. And if they are simple, then training and support become much smaller issues.
Even support has been embedded. I recently read about Helpshift, a platform that can be attached to mobile apps to provide in-app customer service – isn’t that neat? Helpshift’s focus is not only to reduce the need for a call to a call centre, but the outright reduction of problem tickets – that’s how easy software developers are making it for us.
At the same time that core business software has been simplified and trivialized, new things have come into the mainstream of information technology tools: and the main one is big data analytics. This is a field that has matured into a core of standard capabilities that include the following:
- Mining of unstructured data in many forms, including text, voice and video – not just numbers.
- Forms of analytics that not only quantify objective measurements from data but also dissect and interpret subjective impressions such as sentiment and mood (positive and negative remarks, happy, sad or angry faces, etc.).
- Access to data in external sites, not just the servers of the Enterprise – web site, emails, social networks and indeed external databases.
- New storage software to manage huge data sets – the emergence of Hadoop.
- The emergence of predictive analytics – using algorithms to draw insights from data.
- The emergence of Data Science as a structured knowledge-base to achieve predictive analytics.
- The emergence of ‘programming languages’ like Python and R to facilitate the development of predictive analytics algorithms.
- Software that embeds sentiment analysis and predictive algorithms so that you don’t depend as much on Data Scientists.
- The emergence of machine learning (artificial intelligence) as a mainstream component of many applications, including – but not limited to – big data analytics.
[To keep tabs on what’s happening with these technologies, visit and subscribe to my magazine on Flipboard: Company of Tomorrow, Today]
As you know, IBM and Apple established a partnership, aimed primarily at the Enterprise market. This alliance is all about analytics and mobiles but not in the way you might think. Initially, I also thought that basically IBM would provide software similar to Cognos with data mining functionality accessible through iPads. Then, I took a look at what IBM has built and realized how far from anything ‘traditional’ this is.
What IBM has done that I find remarkable, is that they conceived a mobile architecture for regular, transactional business applications – like CRM – but where analytics and more specifically predictive analytics, are part of the workflow rather than extraneous to the workflow.
If you’re like me, you’re probably accustomed to the idea that administrative tasks are over here and analytics are over there. On one side, you have apps and processes to maintain Customer Master Data or to process customer orders or to prepare client calls; and then, over there, you have this back office that churns data, does all sorts of spreadsheet magic and provides reports and graphs showing market share movement, competitive data and insights as to where you should be selling focus products.
In the IBM platform, everything I just told you is integrated into a single structure where predictive analytics are like the silent partner to core tasks, the Jiminy Cricket of business processes. Within a CRM application, analytics is an automated expert behind the scenes, popping out recommendations as you do your work. So, in this approach, if you are looking at the information about a Customer, you will see measurements and recommendations; if you’re processing a customer order, you may get insights about how the customer typically prefers his orders shipped or things to avoid so that you don’t lose this customer.
Now, let’s put two and two together: what we see here is not only the trivialization and democratization of ‘older’ applications, such as Payroll and Supply Chain Management, but we also see new classes of application (like what IBM and Helpshift are doing) that emerge in this trivialized and democratized form.
In the 90’s, SAP and others eliminated the necessity for programmers to develop custom applications by providing configurable business software. In the past 1/2 decade, the software industry has moved forward exponentially in this process of making technology trivial and simpler for the practitioner. Thus, the need for an in-house department of experts with programmatic skills has been reduced dramatically.
Recently, I was involved in a project to build an application for one of my clients. Close to the end, we ran into a roadblock: Global IT. A back and forth debate was going on about whether there was enough capacity in central servers to accommodate the new app or whether new servers needed to be acquired and set-up. This debate went on for months – not because it takes months to make such a simple decision but because of everything else that is going on – two majoracquisitions, a global rollout of SAP and a number of other things. I was watching this debate and just thought: why don’t you just send everything to Amazon Web Services and not worry about it any longer?
I’ve always been of the opinion that if your company is in the business of pharmaceutical products or consumer products or retail or construction, why do you have a full blown IT department full of experts? In the 80’s and 90’s, when IT was still primitive, perhaps that made sense. But today, there is absolutely no way that a pharmaceutical company – or airline or construction company – can keep up with the speed and diversity of technology evolution through internal resources. There-is-no-way!
The traditional, self sufficient IT department is quickly becoming obsolete and the companies they serve are quickly falling behind because said departments simply can’t bring in these simplified, embedded forms of technology.
But is there a role for a technology group? Yes, of course, but it’s not a technical role.
It has always been the case that the value of technology for businesses is not in the technology itself, it’s in what you do with it. For some forms of technology, what to do with it is easy to understand: you look at an ERP and you see customers and products and purchase orders and forecasts. But with most of the new tech of the past few years, the paradigm shift is so deep that it is not so obvious what you do with these things. Would you, for instance, know what to do with an Apple Watch in your business? How would you embed predictive analytics in the basic workflow of your purchasing staff?
In the winter issue of the MIT Sloan Management Review magazine, SMR presents the notion of the digital corporation and shows, through their annual survey, that mature digital corporations don’t use new technologies individually for individual problems; instead, they figure out how to use them together.
Just as technology has become embedded, a Technology-focused organization serving an Enterprise that doesn’t produce or service technology, needs to be embedded in the core business of the enterprise and help figure out strategic ways to use multiple components of new technology.
The Enterprise of tomorrow isn’t spending years and millions of dollars consolidating ERP’s. ERP’s have become commodities – nobody competes because of their ERP’s. Since ERPs and like-applications have become the core competency of many Enterprise IT groups, it’s not surprising that having many ERP’s and the need to consolidate them is seen as a mission critical issue. I suggest that it is not.
In the 90’s, I consulted to Banks who ran 300-400 systems every night and I recall Banks who wrote-off hundreds of millions of dollars in failed attempts at replacing many systems by one. Eventually, they shifted their attention to customer-centric channels – the new technologies of then – and left commodity systems where they were. Middleware came along and made that strategy feasible. But that was 20 years ago! – do you really think that your problem with a few dozen ERP’s is that major? It’s not. It’s only a problem if that’s all you know.
You should put a stop to projects that take years and tie up so many critical resources achieving something that won’t move your company forward and will only provide the illusion of increased competitiveness.
What IT professionals should do today is this: work intimately with business operations – immerse yourselves in there – and study the application paradigms of today; become knowledgeable of what is out there and then spend your time imagining ways for businesses to incorporate these new technologies. Help the folks in the operation – not so much to learn how to press buttons, but rather how to change their work patterns to leverage today’s technologies.
In order to evolve this kind of approach to IT, you must liberate it from the old days. Consider farming out your servers and all commodity services. Consider simplifying your office technology by moving away from the Windows desktop – or even the Windows 2 in 1 desktop – and adopt mobile appliances as your standard platform. Few people in any office today need a laptop, let alone a workstation but for those who do, adopt thin, light, trouble-free laptops like Apple’s MacBook. Look at what IBM has done and seek inspiration therein.
The internal IT of tomorrow, today, should be focused on helping strategize how to leverage today’s new technologies – cloud, mobile, social and analytics – by changing and simplifying today’s workplace, to make it more real-time and more mobile.
If you’re running IT in a major corporation and you wake up in the morning and think of ERP’s and the like, you’re in the wrong place. Think Analytics and go from there.
Update – October 2018
This article was written in 2016. Since then, a lot has happened: predictive analytics has evolved and is now called Machine Learning; that evolved further to Deep Learning with Neural Networks. Blockchain is gradually coming to the forefront of business technology, beyond Bitcoin and is being used in the Extra Enterprise space or X-space – the zone between Enterprises where data related to business transacted between two entities can be stored in an impartial space, in a ledger form that is hard to hack into, containing the truth of those transactions. The Internet of Things evolved into the Industrial Internet of Things, where manufacturers can link the sensors of manufacturing equipment to a data lake in the Cloud, to be exploited by an AI engine providing insights into the performance of the equipment, identifying not just failure points but failure circumstances, helping manufactures optimize their operations rapidly.
As I mentioned in 2016, the beauty of Cloud is not so much that you can access your enterprise systems via the Cloud. Rather, the value added by Cloud is that providers of Cloud Services – Microsoft, Amazon, Google – also provide these new technologies as a Cloud service. Thus, the developments of the past 2 years only reinforce the points I made about the IT of tomorrow, today.
New technologies today are the great enablers of the disruption caused by start-ups – Companies of Tomorrow, Today, founded by Millennials and Gen Z’s born in a connected world, free from the paradigm of old, 20th century, centralized, command and control companies. Think of Uber, Uber Eats, Stripe, Braintree, Olo, Snap, Doctor Smart and so many others. The big threat of start-up disrupters is that access to these powerful technologies is so easy and inexpensive.
Imagine a company without desktops, telephone systems, no servers, no LAN, no email server; people with only iPad’s or MacBooks in their hands; no assigned desks, no assigned extensions. Every employee working on mobile apps, accessing resources in the Cloud anywhere in the world, communicating (text, voice or video) through social media or smartphones; performing their functions assisted by AI. This would be an extremely lightweight organization, fast, working with data in real time and thoroughly mobile. How easy would it be, for instance, to set-up a new office in another country, immediately connected to the Enterprise? This would also be a company constantly updating its technology with incredible ease.
The scary thing is that, no matter what industry you’re in, a startup could do what you do in this fashion (read the story of how Uber built Uber Eats so quickly). That’s the real threat. They’re not encumbered by the shackles of heavy IT infrastructure.