Middleware in the Downturn - Create your Springboard
It is no secret that the world economy is facing a wide scale downturn. Companies are looking to reduce costs and IT is generally viewed exclusively as a cost center. The current economic environment offers an opportunity for IT to underscore its value by moving beyond basic foundational support for their respective businesses - to focusing on alignment with business in an effort to help accelerate or make possible critical processes that can grow the bottom line.
The McKinsey Quarterly, an excellent publication that provides thought leadership, has produced an insightful article around what possibilities exist for IT to make positive material financial difference to the businesses that it supports in the downturn. McKinsey proposes that "... turning off technology investments during a downturn is counterproductive. When business picks up, you may lack critical capabilities. Besides, many technology investments can improve profitability in the short to medium term". Taking the above statement from a 30,000ft generalization to a 15,000ft strategic, actionable view we can address where middleware can play a role in this strategy. Although mundane at first glance - especially from the standpoint of business - middleware is a tremendous enabler. Since most organizations already have some level of investment in it, a great place to start looking to turn on some new, additional value.
SOA, BPM and portal technologies each offer some very clear, low cost plays, that can help businesses to get more out of their existing IT investments. The following guidelines apply whether an organization have made existing technology investments or is thinking about making some strategic investments with existing yearly budget allocated for IT. It also takes into account that most IT organizations have significant spend from a time and resource standpoint on existing system maintenance, so it does not propose trying to swallow the ocean. Being pragmatic is critical in order to make any real gains.
Services Oriented Architecture (SOA)
Why it matters
SOA offers a platform to scale operations and provide agility for subsequent rounds of systems development. Out of the three middleware plays listed here, SOA offers the greatest foundational support to create a competitive advantage coming out of the downturn. This is not to say that organizations should rewrite of existing systems, but to use SOA principles to make IT infrastructure more flexible to reduce systems integration costs as they continue ongoing development and maintenance efforts.
Downturn Bottom Line
SOA provides an advantage out of downturn delivering an increased ability to scale and reduced time to integrate systems. If an organization has an upcoming product release or its anticipates that its sales will increase in a better economy it is worth looking at furthering SOA investment. It will provide a company with a well-oiled, highly responsive IT machine moving forward.
Business Process Management (BPM)
Why it matters
Now - perhaps more than at any time - is the value proposition for business process management strong. Quick wins can be delivered to the business by automating simple processes that reduce cycle times and provide analytics from which to tune the processes. Even something as simple as a 10% to 20% reduction in cycle time in existing paper-based or email-based processes has immediate material impact on the amount of resource needed to get a job done and the costs associated with doing it. This lets an organization leverage that resource elsewhere to help drive sales or can serve as cost reduction.
Downturn Bottom Line
IT can work directly with the business to deliver low cost wins that contribute directly to a company's bottom line by creating sales efficiencies, overhead reduction and or reduced cycle times due to automation. Out of the three tools here, BPM provides the least time to value and immediate cost savings.
Enterprise Portal
Why it matters
If portal infrastructure is already in place (internal or external) it can offer customers or prospects the opportunity to more easily do business with your organization. Whether by using out-of-box knowledge management features to help customers leverage your products, discussion forums to support the products or the ability for customers to look at certain portions of their account data without involving your staff value exists that can be tapped into without massive amounts of effort and will result in a potential reduction of the time and resource that are spent dealing with customer operations. In addition to this think of some industry specific ways in which competitive advantage can be created with your organization's online presence that will help to eclipse competition.
Downturn Bottom Line
Look to generate competitive advantages and deliver a better customer experience on top of existing infrastructure that may be underutilized. This can also result in operational cost reduction or a shift in resources to focus more on higher value customer interaction to help drive sales efforts.
By thinking carefully about existing IT resource cycles and where it may be possible to leverage them and or reprioritizing existing efforts it is possible to take one or more of the above tools and create a foundation for business to grow in the near term or scale to support strategic initiatives when it emerges from the downturn.
