There was a BPR wave (Business Process Re-engineering) , when processes became the source of competitive advantage, all organizations focused on improving or redesigning the business processes for radical improvements in efficiency & effectiveness.
Today organizations having an ERP, CRM, SCM etc is common, largely all main players in any market have similar process maturity, they all have same quality certifications like ISO,CMM,six sigma,ISMS etc. and thus mature processes today have become a norm and are no more a source of competitive advantage.
Problem of Legacy
Point to ponder is that all leading organizations over the last couple of decades have invested heavily on ICT infrastructure and this decades of incremental improvements have lead to:
- Disparate applications from multiple vendors
- Multiple platforms
- Layers of data and application redundancy (unwanted)
- Mixture of packaged and legacy apps
- Messaging based integrated apps
- Poor usability of integrated apps and thus poor usage by employees/users
Today this infrastructure has high level of inefficiencies due to challenge of integration and interoperability. Managing such an infrastructure itself is a huge cost for organizations and no one can even dare to replace these systems due to high switching costs, even if most CIOs/CTOs may wish to have one single platform (with open source apps) with optimal redundancy and maximum efficiency and thus least cost of maintenance.
What multiplies the problem is the fact that most organizations are now using inorganic means to grow further. Inorganic growth will surely help in short term to meet financial expectations of the stakeholders but will become a bigger cost in long run due to problems related to culture and technology integration.
The problem of legacy is not just for non IT companies, but is equally big for leading software and web companies like google, yahoo, aol etc. Convergence of web is happening but larger players in internet space today have a mixed portfolio of websites (organic + inorganic) which are a challenge to integrate and provide a seamless interface to the user. Any such effort will always have a compromised usability and users wont mind switching to better options.
Solution is Technology Re-engineering
Competitive advantage in the knowledge economy comes through innovation, agility and adaptability. Processes over the years got automated using multiple products from different proprietary technology vendors (MS, IBM etc), today integrating them for a seamless process with high reliability and control is next to impossible. Legacy has become a burden under which a few players may cease to exist in the coming decade as their technology will restrict their competitiveness.
So how can someone even think of becoming agile and adapt to fast changing markets?
Technology has seen some major improvements in the last decade, especially due to cloud computing, Web 2.0, Telecom and Open source revolution. Today it is possible to build a single platform from scratch that can meet all the needs of an enterprise and at almost quarter of the cost at which the silo apps were developed, but the challenge is the high switching cost and resistance to change (lets not fiddle with a system that’s working).
To have an edge in the new economy, we need Business Technology Re-engineering (BTR) to create most efficient, scalable and flexible architecture for an enterprise that provides the required agility to an enterprise. BTR means, to re-think your enterprise IT or product architecture from scratch.
A few guidelines that may be used:
- Forget what used to be the best in the past, past is past, think what is the best way to do something today, and then look at reusing existing apps and components. dont re-invent the wheel, but do redesign it!
- Don’t integrate apps at the cost of usability and felixibility to modify it later
- Focus on data reuse, try to migrate so that redundancy can be optimized, use web services and semantic models
- Replace the entire presentation layer (usability is the key) and separate it from the logic across all apps
- Think open source and see change as a norm
- Switching cost may be high, but will be one time and will always be lower than the cost of loosing competitiveness
What’s your opinion?
[Guest article by Sumeet Anand, Founder of Kreeo].
(This article is part of our series inviting entrepreneurs to contribute and win free entry ticket to Nasscom Product Conclave.)