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This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or otherauthorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied,distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2012 Gartner, Inc. and/or its affiliates. All rights reserved.
Workshop: AcceleratingInnovation by Adopting a Pace-Layered Application Strategy
George Ambler@cioleader
Why Is a New Application StrategyNeeded?
OneSize Fits
All
BusinessLeader
Apps/ITLeader
The Conversation Between Businessand IT Leaders Is Not Working!
NewIdeas
Better Ideas
CommonIdeas
“I don’t knowexactly what Iwant. I need toexperiment”
“I know what Iwant, but it needs
to be different frommy competitors”
“I know what Iwant and it doesn’thave to be unique”
How Do Other "Systems" in Industries DealWith Varying Rates of Change? Pace Layering?
Structure:
Skin:
Space Plan:
Services:
Stuff:
30 to 300 Years
20 Years
3 to 30 Years
7 to 15 Years
1 Day to1 Month
Site: Eternal
Note: For more on pace layers and shearing layers in buildingarchitecture, see "How Buildings Learn" (1994) by Stewart Brand
Systems of Record
Systems of Differentiation
Systems of Innovation
A Pace-Layered View of Applications
BetterIdeas
GreaterEfficiency
CommonIdeas
UniqueProcesses
CompetitiveThreatsNew Ideas
What Are Your Systems of Record?
Employee
Customer(Constituent)
Order
Product(Offering)
Asset
Financial
SupplierOthers
Core BankingPolicies (Insurance)
Etc.
What Are Your Differentiating Capabilities?
Finance(Evolves to PM)
Customer(Constituent)
Market
DeliverS
ervi
ceD
eliver
Employee
Recruit/Hire
Review
Pro
mot
e Develop
Supplier
Contract
Man
age P
rocure
Offering
R&D
Version
End
ofLi
fe
Source/M
ake
Asset
Buy/Build/Lease
End
ofLi
fe MR
OUpgrade
How Should New Ideas Be Supported?
OpenInnovation
Employee
Recruit/Hire
Customer(Constituent)
Market
Service
Offering
R&D
Systems of Record
Systems of Differentiation
Systems of Innovation
SentimentAnalysis Service
Open InnovationSubmission Box
Product ReviewService
RecommendationsEngine
iPhoneApp
DroidApp
FacebookPresence
Customer ServiceProcesses & Systems ConfiguratorR&D & Product Development
Systems & Processes
Customer Product Supplier Order
Example: Externally Driven Innovationand Differentiation Meet "Layers"
Facebook, Twitter, YouTube, Communities, Portal, etc.
System ofRecord
It's All About the Governance -Differences Between the Layers
System ofDifferentiation
System ofInnovation
ProcessChange
Architecture
Funding
Agile Practices
Waterfall
DevelopmentPractices
BusinessEngagement
PlanningHorizon
Strict Change Control Experimentation
Investment Pool
Capital Process
Traditional Alternate Platforms
Doing the Work
Formal Process
7+ years 2-3 months1-2 years
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Bimodal IT Offers a Way to Get Unstuck
"The reality is thatyou do have tooperate at twospeeds, and some ofthat you do bycreating dedicatedteams for each.Focusing on the bigsystems, makingthem run smooth,while at the sametime havingdisrupters toinnovate, togetherwith marketing andthe customer,exploiting digital."— Willem Eelman, global
CIO, UnileverTraditional Mode Nonlinear Mode
Waterfalldevelopment
Known vendorsStrong governance
Minimized riskTechnology teams
Stuck in the middle"Fit for no one"
Agile dev.Small/
innovativepartners
Lightweight"Just good
enough" governanceManaged risk
Multidisciplinary teams
When speed or innovation isneeded, or there is a high
degree of uncertainty
Workshop Discussion
Hybrid ERP is Becoming the Norm
• Most organizations have a heterogeneousportfolio of business applications.
• The applications range from mainframe to iPad,data center to cloud, and critical to casual.
• The business processes they support maychange every few years or every few days.
• No single strategy or governance model can beappropriate for all applications.
• The problem will get worse as Cloud and SaaSoptions continue to gain popularity
Group DiscussionIn your groups appoint a spokesperson for your group toreport on the discussion around the following two questions:
1. What do you see as the key benefits gained fromimplementing a place layered application strategy?
2. What are the challenges you can see in implementing apace layered application strategy?
Common Challenges When ImplementingPace Layers
• Defining the Appropriate Scope for the Effort- All applications, even the Departmental ones?- Whole Organization or by BU or Functional domain
• Getting to the right level of Granularity for defining Application- ERP is too broad, but how much to we break it down- Is a web service to granular?
• Lack of business Involvement• Focus too much on eliminating spend on Systems of Record• Look at it as a one and done exercise
- Don’t establish distinct governance for each layer- Don’t tie pace Layers to their APM/investment management
process
Common Benefits cited by clients
• Communication Vehicle for improving business and ITpartnership- By far the most common positive feedback
• Simple model that everyone understands• Provides clarity on where investment priorities should be
- Shift funding towards differentiation/innovation• Creates more manageable segments for portfolio
management• Can help convince business to implement SoR with little
or no customization• Shifting more resources to differentiating/innovative work
since it needs to change more frequently
Feedback from Clients on how PaceLayers Can Enable Differentiation
• Provides a process to consider individualbusiness activities rather than applicationcategories.
• Creates a framework to support the coexistenceof integrated suites and best-of-breed apps.
• Establishes a governance process that allowsdepartments to specify, justify and even purchasetheir own applications.
• Improves the dialogue between business and ITleaders about which activities are (or should be)truly differentiating.
Feedback from Clients on How They are usingPace Layers to Encourage Innovation• Creating an “Innovation Center" with a budget
and governance process to identify and nurturenew ideas
• Establish a development environment with toolsand resources to make innovative apps. fasterand easier to develop. Many looking to cloud
• Identifying consolidation and rationalizationopportunities and shifting investment towardsinnovation
• Reinforcing that failure isn’t a bad thing, as longas you fail fast.
Recent Trends on How people are usingPace Layers• Identifying what applications can/should move to cloud• Support planning for ERP Upgrade or Consolidation
projects• Using Pace Layers as a way to incorporate “Rogue IT”• Incorporating Pace Layer concepts into RFP’s for
application outsourcing deals• Pace Layered Budgeting
- SOR – long term capital planning- SOD – classic annual budgeting process- SOI – Innovation Fund, VC model (Many re-thinking how
to do this)
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or otherauthorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied,distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.© 2012 Gartner, Inc. and/or its affiliates. All rights reserved.
Accelerating Innovation byAdopting a Pace-LayeredApplication Strategy
George AmblerExecutive Partner
Gartner [email protected]
www.twitter.com/cioleader