Over the next five years, technology changes will disrupt our long-held beliefs about the
ownership and value of core enterprise application, writes Paul D. Hamerman, vice-president and
principal analyst at Forrester Research. These changes will introduce new levels of process
flexibility, improve the transparency of ownership costs, and accelerate the speed of process
execution. As outlined in recent research from Forrester, seven technologies will drive this
transformation: software-as-a-service (SaaS), mobile, business process management (BPM), usability,
platform-as-a-service (PaaS), social networks, and elastic computing.
However, these trends have far-reaching implications that extend beyond the technologies
themselves. With applications evolving towards greater levels of flexibility, business experts will
increasingly play a more active role in defining the business processes, rules, organisational
structures and performance metrics within the software. Already, we recognise that buying decisions
and ownership responsibility for applications such as customer relationship management (CRM) and
human resource management (HRM), and potentially enterprise resource planning (ERP), is shifting
more to the business side of the house. Forrester refers to this ownership shift as "IT to BT", and
it represents a unique opportunity for business process professionals to help IT and business
stakeholders leverage innovative technology to transform business processes and improve application
flexibility and value.
- Trend 1: Cloud deployment models change application economics – Traditional on-premises
applications have reached breaking point: software upgrades have become so costly and difficult
that most customers defer for four years or longer. Customisation further complicates the upgrade
challenge, and supplier support deadlines and technical obsolescence, rather than business value,
drive upgrade decisions. However, SaaS - and, more broadly, cloud computing - represents an
alternative deployment model that is much more predictable. As SaaS adoption grows, we expect that
application economics will change for customer and supplier alike.
- Trend 2: Mobile technology accelerates business processes – Mobile technology -
including devices, software, networks and product distribution channels - is evolving at breakneck
pace. The potential
of mobile applications to transform business processes hinges not only on the speed and
convenience of mobility itself, but also on the unique capabilities of the devices to sense,
respond to, deliver and capture information in real time. Enterprise application suppliers,
however, will struggle to adapt their product development cycles to the pace of the mobile
world.
- Trend 3: Business process flexibility evolves via embedded modelling tools
– Enterprise application configuration and process management has historically been
the domain of technical specialists within IT, prioritising and queuing the change requests coming
from business stakeholders. The end result has been a low level of business flexibility, where
processes often adapt to the limitations of the software or customisation layers are built onto the
applications. Package configuration tooling that is flexible, graphical and model-based - no coding
required - is evolving and will become a way to differentiate between packaged application
suppliers. Building out these capabilities may prove challenging, given the high degree of
flexibility, variability and adaptability built into BPM services, so packaged application
suppliers may need to acquire some of the remaining pure-play BPM suppliers instead.
- Trend 4: Application user experiences advance to the next level
– Packaged application software was initially designed to optimise the capture of
transactional data, using bland, character-based user interfaces (UIs) with rows of input fields
and field descriptions. The addition of colours, drop-down lists, icons and other features has done
little to advance application usability beyond the data capture orientation of the most frequent
users. Today, applications have reached a turning point. Suppliers now design newer user
experiences; their products have rich graphical features that deliver business intelligence and
interactive displays that enable decision-orientated activities and real-time customer
interactions. The focus is moving from data capture to business outcomes, extending the application
reach to a more diverse array of user roles.
- Trend 5: Extensibility improves via platform-as-a-service – While most
packaged applications offer some proprietary tools to customise or extend, the cost of doing so and
the downstream impact on upgrades have caused many companies to seek alternatives. This often leads
to decisions to buy and customise or build from scratch to meet business requirements outside of
the relatively commoditised core packaged applications. Looking ahead, expect to see PaaS, a set of
rapid application development tools for extending apps to the cloud, disrupt the notion of "build
versus buy" in applications. Instead of build versus buy, the application platform will enable "buy
plus build". Standard functionality plus PaaS extensibility means that ERP and other complex
applications can be more effectively aligned with business requirements.
- Trend 6: Elastic computing platforms scale transactions and analytics
– Forrester defines an elastic application platform (EAP) as an application platform
that automates the elasticity of transactions, services and data, delivering high availability and
performance using elastic resources. EAPs will deliver faster performance and be more
cost-effective to use. Yet the benefits from a business process perspective will likely gravitate
towards the insight and predictive analysis that come from processing massive amounts information
instantaneously. This will not only help large companies efficiently manage high volumes of
transaction and internal data, but will also help many companies draw insight from the vast data
resources that exist in public and industry domains.
- Trend 7: Collaboration comes to applications in context via social tools
– Rampant adoption of social-based communications in the consumer world has left
application suppliers scrambling to harness this technology within, or alongside, business
applications. In the near term - the next one or two years - social collaboration will sit
alongside enterprise applications, as only a few enterprise application suppliers will harness it
successfully in the context of enabling business processes. Effective use of social collaboration
in enterprise applications and business processes will take several years to mature, eventually
becoming a relatively ubiquitous and standardised feature.
Paul Hamerman is vice-president and principal analyst at Forrester Research, where he serves
business process professionals. His coverage includes the ERP market, financial management and
human resources management systems and business processes, and business performance solutions. Paul
blogs at: http://blogs.forrester.com/paul_hamerman
Previous Forrester articles in the series:
- Justifying
your cloud investment: high-performance computing
- Cloud
predictions for 2011: Gains from early experiences come alive
- Harnessing
mobile UC to transform the business
- The
six roles that drive successful business process transformation
- Own
nothing - control everything: five patterns for securing data on devices you don't own
- Make
mobility standard business practice
- Personal
device momentum will challenge traditional mobile sourcing strategies