Current IT architecture is a stumbling block for enterprises seeking greater agility through the implementation of service oriented architecture (SOA), the Asia-Pacific president of IBM, Frank Kern said today.
Speaking at the Gartner Symposium, Kern said IT professionals need to compartmentalize the business as a series of individual specialist units by creating 'centres of excellence'.
As enterprises become more specialized internally, IT should follow, Kern said.
"Moving to centres of excellence is an evolutionary process, and one we are accelerating and doing more of at IBM. On a global basis using a global supply chain model, we were able to drag 31 percent more goods at 21 percent less cost - the power of the horizontal, fully integrated supply chain," Kern said.
"By doing that we have improved client satisfaction by two points, we have inventory at a 30-year low; we have reduced our number of suppliers by 80 percent and made 90 percent of our procurement processes hands-free.
"The Department of Veterans' Affairs did component mapping of its business, looked at what it is good at and determined that it could have certain offices in states become centres of excellence to support the whole country."
Kern added that Sony Computer Entertainment Australia is a great example of 'componentization'. With only 50 staff the company was able to identify what it is good at and capitalize on it.
"the company said it is good at business operations, sales and marketing and then found others to link to for logistics and developed a highly specialized business model based on componentization," he said.
Gartner predicts that over the next couple of years, 80 percent of technology transformation will use SOA.
Warrick Liang, head of IT service for the NZ Accident Compensation Corporation, was less enthralled about the promise of cutting costs through SOA than he was with the fact IBM seems to have 'taken its own medicine'.
"I have 2500 staff and we have problems with competing activities to cut costs when it comes to doing things cheaper and faster. You cannot be overawed by the fact this is what IBM has done, and apply the lessons to your own scale," he said.