The world today is at the confluence of several trends, each sufficiently disruptive in its own right to affect profoundly the way business is conducted.
Taken together, they herald a transformation in business automation, which will see companies that aggressively adopt the new business practices working “smarter rather than harder” while laggards will increasingly find themselves at a competitive disadvantage.
Of these trends the most significant are the spread of cloud computing, the growth of the mobile workforce and the use of social networking tools in business applications. These powerful, potent and increasingly ubiquitous technologies are collectively termed Web 2.0: they facilitate multilateral communication in real time together with the collation and sharing of information across the internet.
This is something that has not been seen before; it is sufficiently novel for it to be described as a “revolution”. Web 2.0 is a consequence of the massive computing power and high capacity communications, both wired and wireless, which have emerged over the past few years.
For business, however, one of the most exciting aspects of these developments is the encouragement it has given software vendors to create “next generation applications”, built around common industry standards and which use the tools within Web 2.0 to provide greater flexibility and less complexity at significantly lower cost.
They have also developed new middleware to promote further this enhanced flexibility. Examples include Service Oriented Architectures and Business Process Orchestration. These next generation systems, furthermore, provide better insights into how the business is performing and improved engagement with external and internal stakeholders.
It is no coincidence that the programming skills most in demand at present include expertise in Java, mySQL, PHP, XML, HTML and networking, all crucial to Web 2.0 developments.
The prospect of lower costs should be welcome news to IT directors who, over the past several years, have increasingly been asked to do more with less. The introduction of these new wave applications should see IT restored to its role as a source of competitive advantage rather than simply an essential cost to the business.
Investment in enterprise software worldwide is set to increase this year, but the spend emphasis inevitably will be on systems which promise greater efficiency. Business intelligence, customer relationship management, and supply chain management are among the applications, which are expected to benefit from the new approach.
Human resource management has been particularly influenced by social networking; recruitment, for example, is being increasingly mediated by sites such as Linked In. Think of these applications as supercharged compared to their predecessors.
Another example is business intelligence – the extraction of corporate data and its transformation into useful information – which is going through a renaissance as a consequence of Web 2.0. These systems have the capacity to draw together data from many different sources and combine them to support decision-making – so called “mash-ups”. This information will be available in real time and managers will be able to react quickly to the unexpected reinforcing the concept of management by exception.
IT directors should understand there is some urgency in all this. We may be talking about next generation applications, but this is not futureware; this is here and now and many of the world’s most successful companies have already taken on board applications based on Web 2.0 and are using them to improve communications throughout their workforce through better information access, to share data across their organisations and to foster team work and collaboration. Companies which prevaricate over the introduction of these applications risk floundering in their wake.
Laggards also run the risk of being unable to attract the best staff, either for the business itself or the IT department. Web 2.0 is an exciting, leading edge development and employees want to work not only with state-of-the-art technology but also with technologies they are comfortable with through social networking. The web service Facebook, for example, has more than 600m users worldwide; in a business context employees can collaborate on projects through an internal, secure version of this popular technology.
Let us look at these trends in more detail. Cloud computing – software, processing and storage capacity on demand over the Internet – is catalysing a revolution in business automation. It is redressing the balance between capital and operational expenditure as companies “rent” rather than buy computing capacity. More than half the world’s largest companies could be using cloud computing to support their major revenue generating activities within the next few years.
The second trend is the growth of the mobile workforce. Employees on the road have access to their corporate data and IT services from any point at which they have access to the wireless Internet. “Smart” mobile phones and tablet computers such as Apple’s iPad are already common in the workplace. Mobility will transform the way the salesforce interacts with its customers. Presentations, for example, are a natural for tablet computers while companies that have introduced mobile email report increased customer satisfaction as staff respond immediately to queries whether in the office or not. Mobility provides another example of “closed loop” business intelligence; Executives can view their corporate dashboards from tablet computers or smart phones enabling them to make strategic decisions in real time.
Many believe that the third trend, the introduction of social networking tools to what had been somewhat rigid applications such as enterprise resource management will be just as revolutionary. While some managers may look askance at the idea, it is becoming clear that YouTube, blogs, wikis, widgets, instant messaging, tweets and other Web 2.0 phenomena can open up collaboration and promote productivity in ways denied to older technologies. Because of their easy familiarity, they can be used by employees at all levels. One company, for example, has built an internal network modelled on YouTube to connect large, geographically dispersed teams. Another encouraged a project team to replace emails with blogs and found it hugely improved information sharing.
Adopting and adapting these tools is not an option for CIOs today. It is an imperative. Cloud computing, mobility and social networking tools will coalesce through industry standards over the next several years to yield IT platforms capable of supporting the next generation of enterprise applications and beyond. Be part of it or be left behind.