Standardise, simplify and save

Standardising IT and business processes can lower costs and reduce complexity. And by introducing an enterprise architecture, Cath Jennings discovers that businesses can gain even bigger rewards

The notion of standardising IT infrastructure and 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.

Read more on IT risk management