Enterprise Initiatives

This blog focuses on Enterprise IT topics such as Enterprise Architecture, Portfolio Management, Change Management, Business Process Management, and recaps various technology events and news.

An article written by Joe McKendrick called SOA eased the way for recent shotgun financial mergers inspired me to take this discussion one step further. To me, the biggest benefit of SOA done right is agility. I define agility in IT as the ability to adapt to change at the speed of business. Companies that invest in architecture, specifically in SOA, are in a much better position to adapt to mergers and acquisitions, connect to partners and suppliers, take on new business opportunities, and continually drive down the costs of maintenance and support.

I read many blogs and subscribe to numerous group discussions on SOA, EA, and cloud computing. There is so much discussion arguing the semantics, the ROI, and the viability of these technologies/architectures that it sometimes becomes discouraging. At some point we need to hike up our boot straps and invest in our business's future and stop fire fighting. Those companies that invest now (and do it right) will create a competitive advantage over those that do not. Here are just a few of the harsh realities that our businesses are faced with:

  • Decreasing margins
  • Fierce global competition
  • Mergers/ Acquisitions/ Consolidations
  • Recession
  • Demanding, connected, and empowered consumers
  • Increased regulatory constraints
  • Dynamic business requirements
  • Green initiatives
All of these things mentioned above are issues that we must deal with on top of our company specific issues and requirements that are far exceeding our capacity. To keep up with demand we need a flexible and agile architecture so we can make configuration changes instead of code changes, empower business users to change business rules instead of requesting expensive development projects, and leverage partner and supplier services instead of building everything from scratch, thus reinventing the wheel.

IT is only a cost center if the IT leadership allows it to be. The role of IT should be to innovate and help the business achieve its goals. IT must invest in strategies and architecture to allow this to happen. It is too easy to say we don't have the time, resources, and money. That's a cop out. As I have said before in my article The keeping the lights on mentality
The key business driver in a "keeping the lights on" shop is minimizing costs (usually over anything else). Which makes me wonder why more shops in this mode do not go down the outsource IT path. If lower cost is so important and large innovative initiatives are typically out of the question, why not radically lower the cost by outsourcing IT? I am not recommending that IT shops do this, instead I recommend that IT shops become good business partners and enablers of business success. But if I was a CEO or CFO and my IT's sole purpose was to be a cost center to keep the lights on, I would try to drastically reduce that cost. After all, keeping the lights on is not a core competency of most businesses. It is a necessary evil. Having hordes of full time staffers and paying for their benefits, stock options, and bonuses just to keep the lights on is not smart business. I know my view here will not be popular with most IT folks. I am not down playing anybody's abilities here. All I am saying is that if we don't need our staffs to be innovative, proactive, and be advocates of our business partners and instead just want to the staff to think short term, there is a much cheaper model out there.

So IT leaders have a choice. They can refuse to invest in SOA and continue to support and maintain an inflexible environment that takes a lot of time and money to change or they can invest in the future by justifying an initiative to provide the business with flexibility, agility, and empowerment. Is it easy to do? Heck no! It requires talented staff and partners and most of all top level support. Ask yourself this question. If your company was to merge with your number one competitor tomorrow, how long do you think it would take to integrate these systems? If your competitor was buying your company and your systems were archaic and hard to integrate with, what do you think the odds are that they would keep you around? That's what I thought! Pay now or pay for it forever.


  1. Neil Ward-Dutton  

    Another good post Mike. I have a comment re: the cost-cutting and outsourcing point though: the link is not that straightforward.
    Some CFOs (without experience) might initially think that outsourcing is a way to drastically reduce costs: but all the case study data suggests strongly that those orgs which outsource IT successfully don't save a lot of money. What they do get, often, is better quality, more predictable services at a similar cost - and access to more flexible, larger labour/skills pools.

  2. Mike Kavis  

    @Neil Ward-Dutton,

    Thanks for the feedback. Here is where I am coming from on that point. If all we are doing is "Keeping the lights on" or worrying about support, maintenance, and minor enhancements, why carry all the liability that comes with a horde of full time employees. Instead, an outsourcing model that allows us to fluctuate our resources up and down as needed is more cost effective. This type of work is a commodity so why pay top dollar? If we are partners with the business and are truly innovating, then I want the best people possible who both know the business and are technically savvy. If we are making a difference to the bottom line and not merely a cost center, than I am willing to pay top dollar.

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