A platform for next-gen business- fixing complexity

A platform for next-gen business

STR Team / Oct 01, 2012, 00:41 IST

source:Business Standard

The next generation business platform—a combined offering of cloud computing, software as a service and business process outsourcing—can simplify business processes to a great extent

For three years now, global CEOs, in survey after survey, have said that dealing with change was their top-ranking challenge. In 2012, they picked a new challenge—complexity. And it’s easy to see why.

Globalisation has ascended to a new level in which nations are connected not only by trade, but also by other concerns like climate change, food security, resource depletion and acts of terrorism. A microcosm of this connectedness — the global enterprise ecosystem — is a complex mass of networks — people, systems and organisations. While this keeps the ecosystem alive, it also brings complexity and all its attendant challenges and inefficiencies. So, the obvious conclusion is that enterprises must simplify. Right? Wrong.

The popular argument — the simplest organisation is also the smartest — is unrealistic, almost romantic. In reality, the smart organisation is one that understands that a certain amount of complexity is inevitable, even desirable, and more importantly, knows which complexities to keep. As Albert Einstein once said: “Everything should be made as simple as possible, but not simpler.”

How can an enterprise simplify itself smartly? The answer lies in leadership-led creativity that puts the organisation on the path of innovation. But that’s only half the story. The other half is about mitigating undesirable complexity — that resource-eating, efficiency-draining “bad” complexity, which has no place in a smart organisation. And this success can be scripted by the best-in-class business platform.

The next-generation business platform is a combined offering of cloud computing, software as a service and business process outsourcing. It is differentiated by the fact that it picks up the ball from where the conventional platform drops it, to deliver not just efficiency through managed solutions and outsourcing (which is platform hygiene) but also best-in-class business processes, measurable business-critical results, and yes, even plug-and-play blueprints for executable innovation. Simplifying many things, along the way.

Take information technology operations at banks, for instance. Nearly 73 per cent of their IT budgets are spent on maintenance, or simply to keep the lights on. This is money that should have gone into creating value for the business. Now, look at business operations. Thanks to heightened regulation post crisis, multinational banks find themselves filing more than a lakh reports in a year. This is time that should have gone into creating value for the business. Through its business process outsourcing and managed services offerings, the business platform can take chunks of routine IT and business operations off the organisation’s plate, and the accompanying complexity to boot. And that’s just the beginning.

The business platform not only conserves organisational energies in this manner, but also channelises it in the order of priority. That’s because before an enterprise engages the services of a next generation platform partner, the business maps out properties (processes, operations, functions and so on) that it intends to devolve upon the platform, the investments it will make in these, and the returns it expects on those investments. For example, before signing on the dotted line, a consumer packaged goods company might have already decided that it will hive off payroll processing to the platform to cut headcount by 20 per cent and also commission the delivery of fully managed services to help distributor onboarding to meet a pre-mandated sales target of “add-a-distributor-a-day”. In the process, the enterprise establishes for itself complete clarity on what is critical to the business … what is mere hygiene… what is clearly deadweight… and the metrics associated with each. Uncluttered thinking of this kind invariably leads to less complexity.

Modernisation and integration of legacy systems is another focus area for enterprise investments. It is also one of the biggest sources of pain with the migration of thousands of source code files, a million lines of code, hundreds of processes and a terabyte or more of data. The business platform has emerged as a viable antidote to this problem. As the owner of IT applications residing on the cloud, it is the business platform’s — and not the user enterprise’s — responsibility to ensure that these integrate with the user’s systems and are up to date in every way. In fact, a leading IT industry analyst predicts that by the end of this year, organisations will even move about 2.5 per cent of their legacy packaged applications to the cloud.

Simplification is not restricted to applications alone. On the business platform, flexible, unlimited hardware capacity is available at a single command, to be used and paid for only when needed. With IT assets, processes, managed services and other resources being available at a one-stop platform, the organisation deals with only a single platform partner, when earlier it grappled with cocktail of vendors. And this is no ordinary outsourcing partner, but rather one which assumes the client organisation’s challenges as well as responsibility for its results. Along with this type of simpler, yet more intensive, partnering comes higher quality of engagement built on deeper insight into the business.

A peek on the process side reveals new research that suggests organisations no longer view processes as a holy grail to be sought out, and then guarded zealously; indeed, 80 per cent of the respondents to a recent survey were quite willing to adopt standardised processes. Standardised processes — developed over years of study, experimentation and experience — are an important element of the next generation business platform. Business platform processes are more often than not, best in class, which means that they are the simplest way to achieve a defined optimal result.

Although several organisations get on board the business platform to simplify operational issues, they soon wake up to its other more exciting possibilities. One of these is analytics, which on the platform becomes online, real time, and social-media enabled. The platform’s powerful analytics engine is capable of processing vast quantities of structured and unstructured data to provide unprecedented visibility and insights to business users. All these attributes make for reliable decision making, achieved more simply. The platform also opens up interesting staffing options. By taking on the drudgery of routine activity, it frees up the organisation’s energies for real business, defined by ideation, innovation and value creation.

It is expected that cloud-related investments will grow strongly to cross $60 billion this year. Four out of five new apps will find their way to the cloud, as will a number of organisations. Providers of services in the cloud, such as business platforms, are settling into a much bigger future role by helping enterprises build their tomorrow. In an environment of high uncertainty, organisations cannot risk planning towards a single “future state”; rather they have to prepare for a number of alternative eventualities. Earlier, that would have meant getting embroiled in a complex and resource draining scenario planning exercise. Not anymore.

Topping off the next generation business platform’s capabilities is a set of blueprints for innovation — each one of them ready to deploy should the situation warrant it. Now, regardless of the cards your enterprise is dealt with, you can ace it. Simply speaking.

Samson David
Vice-President and Global Head, Business Platforms, Infosys