The notion ofstandardising IT infrastructureand
its underlying business processes has been around since
organisations starting implementing enterprise resource planning
systems a couple of decades ago.
And although it is still early days, some businesses are
starting to take this concept a step further by introducing an
enterprise architecture in order to improve governance and
obtain a more holistic view of how IT can best support the
business.
Steve Craggs, a director at
research
company Lustratus, explains the rationale behind
standardisation. "IT standardisation has been talked about for
a long time now, and particularly since distributed computing came
on the scene.
"In the old days, it was not an issue because everything ran on
mainframes, but multiplicity of choice in terms of platforms,
applications and ways of deploying hardware and software means that
people are now talking seriously about the benefits of a
standardised approach."
Finding ways of dealing with this complexity is particularly
pertinent to companies that operate in fast-moving environments
such as telcos, and those that are subject to high levels of
regulation and legislation such as financial services firms. Coping
with complexity is also pertinent to firms that are in acquisitive
mode and need an effective way to absorb new purchases quickly.
The benefits of going down this route can be great, not least in
terms of cost savings. Standardising on any given environment, for
example across the software stack, can enable organisations to
exploit economies of scale when negotiating licence deals, and at
the same time can reduce management and support headaches.
Standardisation can also trim IT staff costs as only one skill
set is required to service an application. The possibility of
cutting down on training is another potential advantage, as
personnel are likely to be proficient in using common systems no
matter which site they work from.
But there are also downsides to this approach. As Craggs points
out, "Whenever you standardise things, there is always a risk that
you opt for the lowest common denominator and just go with 'good
enough'. So part of the business may need a specialised tool, but
they may not be able to chose the best one for their requirements
as they have to go with the common one. So it is swings and
roundabouts."
Another problem is that, should an organisation opt to
standardise on a certain package, it will be at the mercy of that
supplier and its whims, which may reduce flexibility.
As a result, although companies frequently decide to enforce at
least some level of standardisation in the back office, this is
less true of regional offices or even individual departments such
as sales and marketing.
Melvin James, head of
Morse Consulting's enterprise architecture practice, says, "It
comes down to individual organisations' business models and
management styles, and whether they want the whole business to
operate in a standard way or whether they prefer a more federated
approach in order to provide different functions with more
autonomy. So for many, standardisation is not necessarily a goal,
whereas sharing knowledge and formalising best practice is."
But this leads on to the difficult question of business process
standardisation, which, in the main, is less well developed than IT
standardisation - not least because it is not generally in the IT
director's remit to decide.
Neil Ward-Dutton, a partner at analyst firm
Macehiter Ward-Dutton, says, "Business process management is
not a mainstream thing, and it is not the case that everyone is
doing it. If you ask companies whether they are pursuing it, they
will say, 'well, kind of'. So although most large organisations are
doing something, it tends to be focused on only one or two
areas."
The classic approach to business process management is to
discover and document processes, model to understand problems,
establish how to improve efficiency, and manage the situation as it
changes over time. But most enterprises are only at the start of
this journey, not least because of inter-departmental politics.
Therefore, for such initiatives to succeed, organisations need
to be both organisationally and culturally mature and have a solid
governance framework in place to ensure that people work together
effectively and do not indulge in empire building.
Organisations also have to be able to accept that not all areas
of the business are unique or contribute to making them more
competitive. Activities at the core of the business, such as human
resources and accounting, for example, are generally undertaken in
a fairly common way and so are ripe candidates for
standardisation.
Activities at the edge of the organisation that involve
interaction with third parties tend to help differentiation, and so
are less suitable candidates for standardisation. However,
Ward-Dutton says, "These considerations are a big barrier for many,
so a certain pain threshold in terms of process inefficiency has to
be reached before they will go through the discomfort of changing
their culture."
One organisation that has bitten the business process management
bullet is the Environment Agency. It has developed a three-year
Modernising Regulation Programme in order to ensure that all of its
regulatory activities are undertaken in as standard a way as
possible.
The first step, says Dave Clarke, programme director at the
agency, was to develop an enterprise-wide architectural vision
before starting on individual projects, with the aim of building
components of the architecture as the projects progress.
"It is important to get your business processes sorted out. You
have to understand what needs to be standardised and where it is
counter-productive to do so as you can overdo it," Clarke says.
One of the areas that the Environment Agency is working on is
the issuing of permits, and although many of the basic processes
here are common, the organisation has discovered variations in the
lower-level detail, which means that it will not enforce
standardisation across the board. The plan is to use Tibco's
software to help automate these processes and to facilitate code
re-use elsewhere.
Ward-Dutton, meanwhile, considers the Environment Agency's
introduction of an enterprise architecture as one of the potential
keys to success.
"Enterprise architectures are high-level business model maps to
understand what the organisation does. This understanding is then
broken up into a couple of dozen chunks of activities, which are
grouped into different categories of business services to make it
easy for people to think about what they can do to support them in
an IT sense," Ward-Dutton says.
Taking this tack helps IT directors make sensible decisions on
how they could go about standardising services in a pragmatic
fashion. "You are not saying, 'right everyone, stop what you are
doing because we need to standardise'," Craggs says.
"Instead, you establish what the high-priority services are and
have the option to SOA [service oriented architecture] them. Once
you have done that, you find that you can re-use components in
other business processes, and you have just taken a step down the
standardisation route without realising it."
But to create an enterprise architecture map, IT directors do
not necessarily have to undertake multi-month modelling exercises
or understand every facet of the business.
"You can do it in a couple of days with a couple of smart
process people because it is really about taking a more holistic
view of how IT supports the business. What it requires is a common
language and a view that is shared by everyone involved, because
what it is about is driving consensus," Ward-Dutton says.
Nonetheless, Gartner warns that up to 40% of enterprise
architecture initiatives will be terminated by 2010 because of poor
execution, failure to set appropriate expectations and a lack of
commitment from stakeholders.
Richard Buchanan, a managing vice-president at Gartner, says,
"Enterprise architecture is not just about technology design. It is
about an integrated strategy involving the entire organisation's
architecture aligned with the business. When companies fail, it is
because they do not have the strong leadership necessary to bring
the programme together as an integrated portfolio or the right
skills to do strategic analysis."
One organisation that has worked hard to put all of these
elements in place is Tewkesbury Borough Council. According to
Graham Quint, IT manager at the council, after looking at the big
picture, the organisation started examining its key business
processes to explore how it could provide services in a less
piecemeal, more streamlined and modular way.
So far it has focused on reworking processes in two key customer
service areas - bulky waste collection and government gateway
payments - and has chosen to adopt an SOA-based approach to
underpin this, helped by enabling technology from Software AG.
Another important factor is ensuring that the business
development team is located in the IT department. "This creates a
very clear link into the business side of the organisation. We do
not treat these as pure technology projects, but as business
projects that are supported by technology and, by being in IT, the
analysis team can ensure that everything dovetails together
smoothly," Quint says.
Doing this successfully means taking a holistic view of the
business and of IT. "Nothing stands in isolation, you have to be
able to see all of the linkages or you are likely to end up in a
technical cul-de-sac. IT is here to provide services to the
business, which means you cannot ever afford to lose sight of what
you are ultimately trying to achieve," Quint says.
Quint advises breaking transformational projects into bite-sized
chunks in order to reduce risk and minimise upfront costs by
staging investment.
James agrees that this tack tends to make sense. "A lot of work
has been done around standardising IT infrastructure by virtue of
the fact that people meet less resistance and find it easier to get
funding. The bigger prize, however, is process standardisation. But
the barriers there are bigger too," he says.