OpenWorld 2011: IT transformations are too much work

The rise of SaaS is also undermining the IT department and its multi-year IT strategies

Once the current wave of core IT transformations have been completed it will be many years before we see their likes again as they have become simply too big, complex, and hard to do.

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That’s the view of Oracle’s APAC VP applications development, Doug Hughes, and the vendor’s Australian customers Australian Financial Group (AFG) and IT consultancy PresenceofIT.

Speaking at Oracle OpenWorld 2011 in San Francisco, Hughes said the days of large IT transformation projects were long gone.

“We see a change within customers: transformation programs can’t happen anymore,” he said. “It is too much work. It stops a business… it is three years of lockdown [the business] can’t do anything. IT needs to move to be a business partner that sits there and addresses areas of concern around the business as and when they are needed.

“So what we are seeing is customers taking their core, foundational implementation, and leaving it [alone] and instead asking how they can extend their capabilities.”

In the Asia Pacific these areas were most commonly human resources and talent management, Hughes said.

In addition to the time and expense of IT transformations, the ability of software as a service (SaaS) to allow the business to bypass IT also rendered IT transformation redundant.

“The great thing about SaaS is that it is opex not capex. The bad thing about SaaS is that it is opex not Capex,” Hughes said. “That sounds stupid, but a company may have gone through years of putting together an IT strategy and all of a sudden the business can go and buy software… have it up and running today, and even better, not talk to the IT department. That has blown the entire enterprise IT strategy.”

Concurring, AFG executive director, Malcom Watkins, said in some respects, core IT systems had gotten too big for their own good.

“Historically, IT is sky scrapper with floors and floors of different functionality and features and what that meant was regression test was getting bigger and bigger,” he said. “If you changed the configuration of any of those floors you had to regression-test this huge stack.

“I think these days everyone is saying that is too hard and it takes too long to make changes and enhancements, the market is moving too fast so you will always be behind the game.

While these big IT transformations are going on you should dissemble the sky scrapper and build suburbs of houses instead where it is easier to knock one over and start again.”

“Coming off a [major IT transformation] is not an easy task for anyone,” Presence of IT Oracle practice manager, Duane Thompson, said.

“How do you break that down into components you can then go and deploy? How can you use those components and have them interact to build flexibility into your organisation? Can you look at your people and talent [management] or finance or banking as separate areas and use middleware integration in between to tie it all together?”

No rush to Fusion

Hughes said that Oracle’s recommend approach for existing customers looking to avoid big IT overhauls was to take adding on new IT capabilities – and moving to the vendor’s new Fusion apps -- in three steps: upgrade, optimise, and extend.

“We are saying that there is no need to rush to Fusion,” he said. “We say to customers that first, upgrade to the latest version of the stack that you are on… that is your bounce point to go to Fusion.

“Optimise: Start to look at middleware as it is fundamental to deploying your applications in the future. Anyone not on middleware as their basepoint is missing the boat, because to do next generation applications you need to have things set up, such as identity management for roles-based operations, content management for enterprise sharing… and business intelligence which in next generation apps is ubiquitous and is on every screen for decision making.

“Extend: Since 2007 all of our acquisitions have been designed to co-exist… they have all been designed to add on functionality.”

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