How the Next Generation Enterprise is Different
From Traditional IT to a Next Generation Enterprise Platform (part 10 of 10)
Most companies have systems that address their basic requirements to execute transactions - ERP, CRM, supply chain and other transactional systems. But nGens go beyond traditional IT to build a platform that enables collaboration and business capability on demand.
Perhaps most familiar in the automotive industry, a platform is a common set of technologies, design principles, management processes, and other capabilities with which an organization can build a variety of things (e.g., car models). It's a simple concept with profound implications for businesses, because there really are alternative ways to configure an enterprise - you can configure to do a few predetermined things extremely well, or you can configure to do a variety of things well, including accommodating unanticipated changes.
The former approach, the industrial model, is still at the heart of most business designs today, and that explains the extreme difficulty they face every time customers or competitors force a major change in strategy and operation. The common analogy is "changing the wheels while the car is in motion." Change is difficult, complex, and distracting, and the implementation project is often large, prolonged, and prone to failure or disappointment. Change is ever accomplished as fast as needed.
The latter is the platform approach. It begins with applying the principles of modularity and interconnectivity to every facet of a business -- systems, processes, assets, people, organizations - and managing them to maintain flexibility (rather than dedicating them to fixed activities). The enterprise is configured to be able to rearrange its capabilities quickly and to connect in new ways, including connecting with the platforms of other enterprises. Change is a regular occurrence.
With a great platform you can gain flexibility and responsiveness without sacrificing efficiency (the primary goal of the industrial model). At any given time, resources can be efficiently deployed, the friction of redeploying them can be minimized, and you can keep your future options open.
Traditional information systems or any other inflexible assets or procedures can paint you into a corner -- as companies can automate change. We tend to use "automation" to describe the industrial-model approach of doing a limited number of things with great efficiency and repeatability. But the platform approach is about automation as well -- the automation of change. When we can both operate efficiently at any given time and automate the accomplishment of change, then the industrial model really is obsolete.
Information Technology, in particular Web 2.0, has a central role in an enterprise platform. You cannot have a flexible business platform -- or the methods for managing a flexible business platform -- without a modular, connectable, reconfigurable infrastructure, especially of software and information. The technologies of the Internet and Web 2.0 have the necessary combination of design and performance characteristics to create business platforms. They can enable a business to operate like the Internet -- on demand, always available, always connecting with additional resources as needed.
The platform approach also changes the role of the technologist. In an nGen, technologists become architects, shaping the platform for agility and sustainability, implemented through modular components and on-demand services.
It was possible to adopt a platform approach to information systems and infrastructure with earlier generations of technology, and progressive corporations did so and benefited. But creating a platform required large investment, and the results were limited if your business partners lacked platforms of their own. Today, with Web 2.0 technologies and with the Internet as part of everyone's platform, the feasibility of creating a business platform has been raised -- and the cost lowered -- by at least an order of magnitude.
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