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Through the fog... The Functional Infrastructure
How can technologists prove the worth of company infrastrucure?

By Quocirca

Published: Monday 01 September 2003

In the dim, dark past of the technology gone by (i.e. 2 years ago), many companies based their IT decisions on the application buy – “We have a CRM problem – let’s get Siebel”, or “Everyone else is doing ERP, let’s talk to SAP”. Large amounts of money went on licences, four to seven (or more in many cases) times more went on implementation, and voilà, the company had its 'solutions' in place. A couple of years on, money is tight and the business is now asking for proof of return on investment.

Oops! All of a sudden, the problems of taking large monolithic 'solutions', often with requirements for the changing of business processes to match the pro/prescription of the underlying application becomes a bit of an albatross around the neck of those involved in making the original business case – or for those who can be identified as the suitable scapegoats. The boom years of ever increasing revenues and profits hiding the shortcomings of the underlying business are long gone and these failings in the business processes are now becoming glaringly obvious.

As technologists, we now have to prove ourselves as never before – we have to be able to demonstrate that we can fully support the aims of the business and that we can manage a flexible environment that reflects the ever-changing market conditions. Monoliths are no longer an option – but we also have to maximise the investments already made.

We now have to move to a more functional infrastructure – whether this be hidden under the name of the 'The Agile Business', 'Utility Computing', 'Grid Computing' or whatever. We also need to embrace the promise of outsourcing – while maintaining control of the business strategy. We need to plan an evolutionary path, from where we are, to where we need to be. How do we do this? Not through a scorched earth policy of rip and replace – the decisions we made in the past were right at the time, and wherever possible, we need to get the most out of what we have already in place. For the functional infrastructure, we need to come from a primary focus of the business process and work downwards.

In a very simplistic manner, it is possible to come up with the 10 main business processes that support the company’s mission statement (which should, essentially, boil down to “We’ll make a load of money for our shareholders, investors and ourselves” – anything else is more of a company vision – e.g. “We’ll create the most exciting experience for all of our customers and partners”). The processes need to be looked at as value chains within the business – such as, how do we move a prospect to a customer, how do we fulfil customer orders, how does our supply chain operate?

Some of these processes will be what defines us as a company – our 'unique' processes; those that keep us ahead of the competition. For the moment, it is best to regard these as sacrosanct – if we begin to mess with them, we could bring the business to its knees. Others will be processes that we have to do within our vertical or geography, our 'differentiator' processes. Companies that do these processes best can gain a competitive advantage on those who do not do them quite so well. At the bottom of the heap are those processes that we all have to do – payroll, expenses, purchase orders, basic health and safety, etc – the 'commodity' processes.

Commodity processes are the prime candidates for outsourcing – there is little point in trying to remain current in the legal needs of payroll, when others can be doing this for you, or of the wonders of global expenses management when this can be done on line from a user’s PDA or laptop to an external specialising in this.

Now to the differentiator processes. With many of these processes, we will find that there are common functions within them – maybe a validation step, or an inventory check. Often, the manner in which this 'common' function is dealt with will be different – just due to the way in which our solutions have grown and evolved. If we can centralise these common functions, creating them as distinct web services, we can look to creating a more manageable, more flexible infrastructure. However, this functionalisation should not be viewed as 'rip and replace', but as a means of sweating existing technical assets. If we have a full workflow solution that is being underutilised while other systems struggle with internal event-driven messaging systems, we should look at turning that workflow solution into a set of callable functions accessible from other applications. If we have a billing engine that is used by one application, can this be wrappered to make it available as a common resource to all systems requiring such a function?

The aim is to drive the differentiator processes down to being an overall process dependent on a set of commodity functions as rapidly as possible, and so to be able to outsource the functions. Each piece of technology that we can remove from our environment enables us to spend more time concentrating on what matters – our business processes. Each time we give responsibility for the technology over to an external, we move towards the possibility of a more flexible business.

Note here the two key points – 'responsibility for the technology' and 'possibility'. Outsourcing technical function and commodity process will not automatically make you the best company around. Maintaining responsibility for the business strategy is key – and so for driving required changes in the business processes as your market evolves. Choosing the right partner, and creating, maintaining and managing suitable SLAs will be the key to turning the possibility of a flexible business into a reality.

So, to create a functional infrastructure, we need a good understanding of our business processes. We need to know what should be outsourced under BPO, and what needs to be deconstructed to sets of technical functions. We need to centralise as many of the functions as possible, and drive differentiator processes down to outsourcable commodity functions. We need to sweat our existing technical assets, while creating an evolutionary base which responds to our business needs, rather than having to modify our business to meet the prescriptive manner of our monolithic “solutions”.

Web services are certainly going to play a big part in this evolution. Integration tools will still be major components. The need for outsourcing is growing – the 'server huggers' who can’t trust an outsider with their data are missing the point. The application age is dead – for survival, it’s back to the future – the capability to run a business as the business needs, not as the technology tells us.

**Quocirca is a leading, user-facing analyst house known for its focus on the 'big picture'. For a full summary of its activities see www.quocirca.com, or reach the company's founding directors by emailing quocirca@silicon.com.

Also in this series: Through the fog… Mobile tariffs Through the fog… Management of utility IT Through the fog... How to buy content management software Through the fog... Getting your business processes finely tuned Through the fog... Better connecting users to technologies Through the fog... Better connecting users to technologies Through the fog... Predictive texting Through the fog... Business continuity and disaster recovery Through the Through the fog... Wireless email at work dilemmas Through the fog... Storage as a service Through the fog... Buying an application server Through the fog... Corporate content management Through the fog... Automated speech recognition Through the fog... Public Key Infrastructure Through the fog... Vendor-channel relationships Through the fog... What future photo messaging?

For Quocirca's 'What's the fuss about...?' series for silicon.com, see this page

And for their earlier 'Surviving the Recession' series, see this page.