November 17, 2008

Resolving centralization / decentralization tension with SOA?

Robert Swanwick pinged me about a post he wrote contemplating an organization's struggle to balance the tension of business unit independence and IT consolidation.  At the end of the post, Robert wonders aloud if SOA is an answer:

"However, the autonomous business units lived on. Because they are quite independent, they are constantly seeking to diverge in order to meet the specific needs of their customers. At the same time IT continues to work towards increased centralization. As you can imagine, this is creating some tension.

A service oriented architecture (SOA) with shared web services and appropriate SOA governance might be their salvation. If IT can control the main architecture and help facilitate the sharing of approved web services, this firm may be able to get the centralization they need while allowing for business units to meet their own customer needs.

Is SOA the way that this increasing tension might be relieved in many organizations? I doubt IT is going to give up working towards standardization and cost savings and I know that if business units feel their customers are not being served by what IT is providing, they are going to continue pushing for autonomy. If not SOA, how is this tension going to be resolved?"

Before I give my two-cents, let me issue the standard consultant disclaimer that in the absence of deep context on the particular situation, the best I can offer is educated conjecture.  In other words, "it depends".

On the IT side, a SOA approach can be used to rationalize application and information portfolios, therefore "centralizing" the software assets that instantiate common business activities and business information actions.  As well, these now common services (business and information) can be composed into interactions specific to each business unit by applying different processes, steps, rules, policies, interfaces, events etc.  So, from a purely technical point of view, yes, it is possible to balance commonalities (centralization) and variations (decentralization) with a SOA approach.

That said, the ability to achieve this outcome hinges on the given organization's maturity.  And to be clear, I'm referring to the entire organization, not just IT.  Some top-of-mind starter questions to asses organizational maturity:

Do the various business unit owners recognize they have commonalities with the other business units? Is sharing (economy of scale) part of the culture? Are the business unit owners willing to collaborate, and able to agree, on standard definitions for those shared activities and information? Will the (economy of scale) benefits achieved be reflected in the business unit owner's performance?  Is there something in it for him/her? Is the organization experienced in IT Governance, particularly around the funding and prioritization of shared services?

If you answered "yes" to the majority of the above, then yes, consider a SOA approach to balance the tension of business unit independence and IT consolidation.  If you answered "no" to the majority of the above, understand that a SOA approach while not impossible, will be much much harder.  Read: increased time, money and organizational angst.

November 14, 2008

Assorted Links - November 14, 2008

Is it just me, or is tech reading/writing become increasingly tied to current affairs?  Here are some interesting links:

techPresident – Obama's CTO: Never Mind Who; What Should S/he Do?

The US CTO discussion is interesting. Some people/organizations are advocating that the CTO should focus "internally" -- cleaning up the Government's use of technology. Others, feel that the CTO should focus on the technology required for the US to regain competitiveness and be energy independent. While there is plenty of work to do in the former, I tend to lean towards the latter. How can we harness technology and encourage technology-based innovation to move the nation forward? For more views, click thru on the link.

Telcos: Don't mess up the Internet with regulation | Politics and Law - CNET News

With Administration change, Net Neutrality to be 2009 topic "The next Congress is sure to introduce Net neutrality legislation, a Democratic congressional staffer said Thursday. "With the Obama administration being extremely supportive of Net neutrality, we're quite excited we can actually get things done," said Frannie Wellings, telecom counsel for Sen. Byron Dorgan (D-N.D)... Representatives from the telecommunications industry insisted they have a common interest in maintaining open networks since their revenues come from carrying bits--but say that they're OK with the current state of the law. New legislation, they say, is not the way to achieve open access--and could even have adverse results. The Federal Communications Commission's ruling against Comcast proved the commission's approach of reviewing possible Net neutrality violations on a case-by-case basis is effective, said James Cicconi, senior executive vice president of external and legislative affairs for AT&T."

elemental links: Net Neutrality – An Important Topic for National Conversation

My Net Neutrality piece from Feb 2006. An attempt to frame the issue – how we got here and the positions of each side. I do offer my own opinion at the end, but my goal in writing the piece was to present the issue neutrally. With the intent to engage more people in the national conversation.

SAP and Microsoft, Watch Your Back - BusinessWeek

tech consumption shifts: "As the U.S. enters what appears likely to be a painful recession, a major shift is taking place in how businesses assess technology products. They're under terrific pressure to cut costs. According to a newly revised forecast from market researcher IDC, growth in U.S. tech spending will decline to 0.9% in 2009, down from a previous forecast of 4.9% growth. But rather than just slice budgets across the board, many companies are switching to a handful of new technologies that save them money...the downturn seems likely to hasten their adoption. Chief among them are software delivered over the Internet, known as cloud computing, such as Google Apps; so-called virtualization software, which allows companies to run multiple applications on a single server computer; and open-source software, which is created collaboratively by multiple companies and is typically less expensive than the traditional kind..."

Business Leaders to IT: You're Still Not Meeting Our Expectations - CIO.com - Business Technology Leadership

This part reads like good news to me. The business should own business process and information definition. "The Forrester study also revealed that business leaders want their own staff to become more knowledge about certain technologies and become capable of playing a bigger role in facilitating technology for themselves. For instance, 59 percent viewed it as a top priority for staff to garner business process analysis skills, 53 percent said the same about project management and 47 percent indicated a similar interest in information modeling. In addition, 43 percent wanted to know more about collaboration tool configuration and customization, which Forrester attributes to business use of wikis, blogs, conferencing and instant messaging. Essentially if the technology directly impacts a business unit, leaders want to be involved."

Mindjet Player Offers Portable Visual Collaboration Maps

This looks interesting... "The crown jewel in Mindjet's new release is easily the Mindjet Player, which allows users to take the interactive mind maps they created with MindManager 8, turn them into Adobe PDFs or Flash .SWF files. These files can be shared with anyone with a computer. Or, if you don't want to share the mind maps, you can publish them in blogs or embed them in Web pages. "The idea is that I could send a PDF to somebody, they could open it up and what they would see instead of just a picture of a map, a fully functioning MindManager map with all of the content and links to external information," Rasking said."

November 13, 2008

Rosabeth Moss Kanter on the discipline behind "Instant Success"

As I've mentioned numerous times, one of the great things about my job is I get to interact with lots of smart, interesting people and organizations.  But, odds would be that's not always the case.  Once in awhile, I find myself hearing about, or witnessing, a situation and I can't help but be astonished, and not in a good way. 

Inevitably, these situations -- failed projects, bloated budgets, redundant portfolios, spiraling technical debt, sinking delivery rates, flat-lined morale, general stasis -- can be attributed to a lack of discipline (business and/or engineering) augmented by a stunning lack of leadership.  Yes, that sounds harsh, but these are difficult times, and hiding from the truth only makes matters worse. 

Having (perhaps) recently been astonished, Rosabeth Moss Kanter's recent post, Instant Success Takes Time, caught my attention this afternoon.  Not because it describes a radical new management concept, but rather because it's a good, case study backed, call to business basics -- discipline, leadership and hard-work.  [emphasis is mine] 

""Instant success takes time" is one of my favorite sayings. New products, people, or ideas that appear to burst on the scene unheralded and soar to the top quickly have often been preceded by a long period of preparation, rehearsal, and trial-and-error experimentation.

One of the more mundane differences between perpetual winners and long-term losers among businesses, sports teams, and other organizations is that the winners simply work harder. As I learned from case studies and surveys for my book Confidence, winners are more likely to take the time to keep honing skills and testing ideas in preparation for change. That's not too dramatic or glamorous, but it's among the biggest differentiators.

In contrast, teams or organizations headed for losing streaks lurch from tactic to tactic without any apparent long-term direction. They lack discipline, do not always rely on facts before chasing fads, and panic under pressure."

Check out the full post.  Pass along as needed.  I certainly will.

November 10, 2008

Assorted Links: November 10, 2008

CIO's IT Budget Survey Results: July Jitters Turn to October Fear - CIO.com - Business Technology Leadership

Interesting stats from a recent CIO survey. Yes, spending is being cut. Nice to see some discipline in the approaches, developing and executing contingency plans rather than reactive slashing. Click thru for the numbers... "The results of CIO's most recent survey on IT budgets, fielded between October 17 and 22, couldn't be more striking compared to results from our two surveys done earlier in 2008. As unfavorable economic conditions continue, more CIOs say they must shave IT budgets, according to our exclusive October survey of 243 IT executives..."

Kaskad is Dead, Long Live Kaskad | Colin Clark on Event Processing

Soon after Colin announced the port of Kaskad's surveillance system to the Coral8 CEP engine, he ported himself there. Colin is now the Executive Vice President of Financial Services at Coral8. Good luck Colin!

Forrester: How IT rides out the recession

I get the first point, but the majority of CIOs run operations well? Really? Why such a high portion of budget to maintenance then? Can't we do better? "One explanation for the relative immunity enjoyed by IT this time around, if it holds up, is that a lot more businesses "get technology" than in 2001, Cullen said. A majority of business leaders now view technology as a core component of their products and services (82%) and/or as a differentiator (72%) in addition to a vehicle for reducing the cost of business operations (66%). IT financial management has also changed. Since the 2001 recession, CIOs have learned to budget lean. The roughly 70% of IT budgets that goes to maintaining operations is managed well by CIOs, according to Cullen."

Sun offers OSGi app server

OSGi will be everywhere: "Sun today is offering its open-source Sun GlassFish Enterprise Server Version 3 Prelude, a Web application server based on a modular OSGi architecture with capabilities from the planned Java Platform Enterprise Edition 6 release...the basis for the planned GlassFish Enterprise Server v3, also based on OSGi and Java EE 6 and due next year. "Glassfish v3 Prelude is our OSGi microkernel application server," said Paul Hinz, director of product management for Java enterprise systems at Sun. "OSGi allows you to have an architecture where you have a kernel that allows pluggable modules and each module can do different things," such as one that processes Ruby code and another to process Enterprise JavaBeans, Hinz said. OSGI provides a strategy to make application servers simpler and faster, said analyst Jonathan Eunice, principal IT adviser at Illuminata. It offers a smaller memory footprint, he said. "The idea is you don't load modules you don't need,"."

IT Project Funding: Less Is More - Susan Cramm

"project success declines dramatically as project size increases..Keys to fast-cycle delivery: * Executive leadership: Don't confuse sponsorship with leadership. * Clear definition of success: Use process measurements that impact financial performance and baseline them at the start of the project * Predefined kill switch: Take the emotion out of the decision making process by defining what defines failure, so that the project can fail fast and be restarted when conditions are more favorable * Small, experienced team: Wait to start your project until you have a seasoned project manager supported by a small team (less than 12) of full time, subject matter experts * Laser sharp focus on critical requirements: Avoid defining requirements by committee by using the success measurements to manage scope * Respect for the future and the past: Factor in the implications of existing business and technology plans while accelerating progress by leveraging legacy systems and existing infrastructure"

November 04, 2008

Dave Linthicum's Real World SOA podcast with me

Last Monday, Dave Linthicum and I chatted about SOA futures for his Real World SOA podcast series.  Being a gracious host, Dave allows his guest to pick the topic.  My choice was the future of SOA, not from an infrastructure perspective, but from a solutions perspective.  You could say, I'm thinking of the future of S-O-A as services, outcomes and assemblies. 

During our conversation, we touch on variety of topics including organizational issues (leadership, communication, education), portfolio management, business analysis, project managers, enterprise architecture platforms and -- you guessed it -- service design.

Check it out.  Thanks Dave!

November 02, 2008

Nov 5, 2008, SOA Reality Check at Babson Center for Information Management Studies

On Wednesday, November 5, 2008, I'm giving a talk at the Babson College CIMS program on The real state of business-driven SOA adoption & sustainment (pdf). As you can see from the program announcement excerpt, I'll be wearing my SOA Consortium hat:

"Over the last two years, through member and public programs, the SOA Consortium has amassed a collection of case studies, anecdotes, best practices and tips related to adopting SOA for business value. In this session, Brenda M. Michelson, Program Director for the SOA Consortium, will tap into the diverse collection of real-world stories to share insights on SOA adoption, drivers, ROI, organizational implications, sustainment lessons, challenges, and related technology trends. Following her presentation, Michelson will facilitate a panel discussion including several local companies describing their SOA environments."

This is a new talk, the bulk of the material from the SOA Consortium collection, with an Elemental Links slide or two mixed in.  In developing the slide deck, I've been 'drawing' some of the discussions from our community of practice.  One of those illustrations maps business and IT activities (strategy -- architecture -- operations -- planning -- initiative execution) to SOA drivers.  The point being, the need for SOA can arise at any point, not just at the top (strategy) or from the bottom (operations). 

Below is a sneak peak at the drawing.  Please note, it might change 12 times before Wednesday, and another 16 before final publication.

michelson_soa_consortium_soadrivers_v1_nov22008

If you are a member of Babson's CIMS program, I hope to meet you on Wednesday.  If you aren't, but are in the Boston area, drop me a line, I have a couple of guest passes for practitioners.

 

[Disclosure: The SOA Consortium is a client of my company, Elemental Links.]

October 28, 2008

Is the credit crisis a boon for cloud computing?

There is an interesting article in the WSJ by Ben Worthen and Bobby White on the state of the technology financing business, which frankly  isn't good.  The article begins by citing an increase in tech financing defaults:

"Defaults on tech financings, loans that allow companies to purchase computers, software and other products, have spiked this year. The problems are surfacing after years in which such loans flowed freely..."

"...In September, 0.86% of equipment loans -- which includes a range of office equipment -- were written off as losses, up from 0.48% a year earlier, according to the Equipment Leasing and Finance Association, an industry group for 700 lenders.

While the numbers appear low, it's about the same as the percentage of real-estate loans -- around 1% -- expected to be written off in the third quarter by the top 100 U.S. commercial banks, according to research firm Aite Group. Tech-financings will reach $88 billion, about 14% of the total amount spent on computer hardware and software this year, estimates research firm IDC.

Businesses are now defaulting on loans for tech purchases "all the time," says John Dondey, national sales director for Baytree Leasing Company LLC, a Lincolnshire, Ill., unit of Baytree National Bank & Trust Co. that does tech financings.

While Baytree's default rate used to be less than 0.5%, it's now between 1% and 1.5% for commercial businesses, he says."

Naturally, this increase in defaults has led to an increase of rates:

"Lenders are responding by tightening their tech-financing terms. While some businesses were once able to get loans for software that required no money down or had 0% interest, some tech-financing operations are now offering rates to small businesses of around 8.25%, according to lenders."

And, hold on to your hats, some creative financing options by big tech companies:

"IBM, which has its own financing arm, says it has seen an "uptick" in the number of customers looking for credit. The Armonk, N.Y., company has responded by launching a new program this month that offers loans at below-market rates with no payment or interest due for 90 days.

Underwriting customer purchases "gives us a competitive advantage," Mark Loughridge, IBM's chief financial officer, said during a call with analysts on Oct. 16. IBM's financing unit had $24.5 billion in loans outstanding at the end of 2007.

Still, IBM has seen its default rate rise from 1.1% in the June quarter to 1.3% in the September quarter. A spokesman says IBM is able to sell repossessed equipment at a higher price than other lenders because it can refurbish and warranty it.

Cisco also uses its own cash reserves to drive sales. The networking giant financed more than $4 billion in customers' purchases, or about 10% of sales, in its fiscal year ending July 26. That's up from $2.7 billion the previous year. Oracle tapped its reserves to finance $1.1 billion, or about 15%, of new software sales in the year ended May 31, up from $891 million the previous year.

Collecting on these loans when the economy sours can be a problem. Cisco was forced to set aside almost $900 million for bad loans in 2001 after lending to dozens of telecommunication and Internet start-ups during the dot-com bubble.

A Cisco spokesman says the company is conservative in its lending practices."

Still though, some organizations are delaying or canceling spending because of the unfavorable credit environment:

"Nearly 20% of chief information officers say unfavorable credit terms caused them to recently delay or cancel purchases, according to 31 companies surveyed in October by the CIO Executive Council, a professional organization."

And, as the article points out, tech financing carries different risks than say housing:

"Tech-financing loans carry special kinds of risks. In the case of hardware like computers, the equipment itself -- a rapidly depreciating asset -- typically serves as collateral. In the case of software, the loans are often unsecured because it is illegal to resell used software."

Finally the cloud part...

What do people and organizations do when they can't secure a loan to buy a core (critical, foundational) asset?  They rent said asset (housing, office space, transportation, machinery, computers, etc.) from someone else.  This allows the person or organization to access the assets they need, and benefits the supplier who receives an income stream on assets that remain in their control.

So, I can't help but wonder aloud 'does the convergence of the credit crisis and the spate of cloud computing articles, offerings and announcements provide the perfect storm for cloud computing adoption?'  Will financial market conditions rocket cloud computing through the hype cycle to adoption?  Or, might organizations choose stagnation over the risk of early adoption?

As I said, I'm merely wondering aloud, but I'm sensing a correlation here.  What do you think?  Is the credit crisis a boon for cloud computing?

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