SAP & ERP Consulting from the Customer Point of View

IT Convergence

The other day I was having a conversation with an IT executive from one of America’s largest companies.  I was really interested in his perspective as a hard working senior level IT insider.  We started talking about the role of IT and business as well as the future of business and technology while I relayed my passion for how IT needs to integrate with the business and how the future was going to change significantly (see e.g. What is the Proper Relationship for the CIO, CEO, and CFO?).

I gained a new appreciation for how difficult an IT executive’s job can be when the economy is in turmoil.  I’m sure my comments and perspective were challenging but here is part of what I gained from that conversation (my assumptions and my “read” may be wrong)…

The wider global technology discussion (inside and outside of the company) is putting real pressure on IT return on investment, IT Convergence, and full integration with the business (see Steps to Achieve SAP IT Convergence).  Even while all of this takes place there is still a critical need to stay on top of technology trends and be sure the organization does not stagnate.  To stay competitive what does he do with “cloud” processing, do they need different applications for some of their processes (CRM, APO,SRM, etc.), what about social media (does it even fit), virtualization, shared services, service excellence, outsourcing, in-sourcing, etc., etc., etc.

This executive’s IT organization is being challenged to do more with less.  As a result of cost-cutting pressures his organization is having to look at outsourcing while he also has to maintain a positive and upbeat appearance in the face of working through difficult cuts.  He has to continue encouraging and rallying the troops while some of them will not be there.

A Simple Response to the Nagging Problem of Business IT Convergence

With all of this background in mind one of his responses to me set me back a moment for its simplicity, candor, and most of all the underlying frustration.  It is certainly one of those very difficult struggles that many corporate technology leaders today face:

“What is the business responsibility for this?”

The business not only has responsibility but they have to help drive solutions and delivery. The various business stakeholders must see, understand, and then accept their role in developing the technology roadmap. And once it is developed they must help ensure its execution.

The Business to IT Convergence Solution That Was There All Along

The IT Convergence approach in the SAP enterprise is partially based on best practices around IT Governance.  By creating a governance structure that involves and integrates both the business and IT stakeholders you gain business buy-in and involvement.  I have written a solution brief on this approach and provide a free, no-obligation MS Access application to build technology roadmaps (see the Solution Brief, governance process, and application overview here:  Beyond Technology Alignment )

The basic takeaway here is that business involvement is critical.  They are already making technology investments, with, or without your involvement. So it is critical to gain that convergence so that technology investments are performed as a partnership and not in isolation.  As a recent Harvard Business Review post by Ray Wang notes:

“[O]verall corporate tech spending is up by 17 to 20% in our latest data, spending by IT departments is flat at best. It’s business leaders, not their IT colleagues, who are driving purchasing decisions.”

Coming to Terms with the Consumerization of IT, http://blogs.hbr.org/cs/2011/07/coming_to_terms_with_the_consu.html and a followup with more details on his site at:  http://blog.softwareinsider.org/2011/08/22/mondays-musings-balancing-the-six-ss-in-consumerization-of-it/ (both retrieved 8/23/2011)

So the key here is to integrate the business into the IT and application infrastructure.  One way to do that is through leveraging SAP steering committee skills and business connections to ensure meaningful involvement by IT.

Additional Steps to SAP IT Convergence – Creating the Center of Excellence

Last week’s post provided a few high level steps to achieve SAP IT Convergence, and this week I am adding to that list the following items.

• Pursue business executive sponsorship but don’t wait for it to get started.
• Start a communication program
• Engage at all levels of the organization
• Conduct one or more pilot programs and capture lessons learned
• Hold IT staff accountable for participation
• Don’t let available tools stifle participation or innovation

Related Posts:

• Steps to Achieve SAP IT Convergence
• SAP IT Convergence is About Business Focused Integration
• SAP Program Management Requires a Type of CMMI
• SAP IT Convergence Beyond Business to IT Alignment
• SAP Project Manager – SAP Program Manager, Lessons from the Trenches

Business to IT Convergence

This is part of an ongoing exploration of creating an SAP or Technology “Center of Excellence” within your enterprise.  For the background and key insights on this approach see the Series on SAP Competency Center or SAP Center of Excellence .

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The real future of technology is for IT to integrate with business, or in other words to “converge” business and technology.  The idea of “aligning” with business is too weak of a statement to define what IT and SAP must do within the enterprise to generate significant ROI.

Think about it, during the course of an SAP project the focus is on integrating the enterprise into a single data repository with dependent process chains.  Somehow that same level of integration is not required of the business and IT after you go live.

Product Convergence Lessons for Next Generation SAP Organizations

Convergence, convergence, convergence, what do I mean by convergence?  The idea behind convergence is the enabling of business with technology so that the two can not be distinguished from each other.  It means the lines between business and IT departments must be deliberately blurred.

Although the following examples are about product convergence they are great illustrations for how business and IT should integrate, or “converge” their functions.

• ARPAnet which was created by the U.S. Defense Department’s Advanced Project’s group eventually became the Internet.  This was originally an advanced data and communications “fabric” that could withstand a nuclear war and route both data and communications in the event whole areas of the network were unavailable.  That back-end technology was later combined with early graphical software to create the public Internet as a global information resource never seen before in human history.
• E-mail was a convergence of network technology with hardware, communication protocols, and then combined with software applications.  These combined to create a new form of communication which has transformed both business and social structures.  That convergence has extended to the Internet for various forms of “webmail.”
• The advent of the personal computer and its increasing power made the way for decentralized processing in the form of “client-server” based applications.  Central business functions and tools could run on a server but each user’s experience and application needs could be tailored at their individual workstations.
• ERP applications such as SAP’s ERP suite were made possible by the need for a centralized source of data, at the intersection of databases, network technology, and software user interfaces.  “Cloud” based applications or Software as a Service (SaaS) were an extension of that convergence to include remote hardware sourcing and access through the Internet.
• Social media was the next “extension” of collaborative technologies.  They converged the Internet’s ability to connect people with software applications that allowed people to communicate in new ways. LinkedIn, Twitter, Facebook, and others are moving forward by connecting people to share more information in real time.

Look at most of Apple’s products.  For many years the Mac PCs and laptops only had marginal market share, while it is increasing it was their other products, their “convergent” products which produced explosive market penetration.  What was the difference?  It was convergence, the convergence of the customer experience with the things people use (see Business Strategy and IT Strategy to Reproduce Apple Innovation ).

What is Really Different About Apple Anyway?

Since Apple is so successful today we will look at their example.  The iPhone, iPad, iPod, all have one thing in common–, they took the idea of usability around the convergence of several technology streams to the next level.  Apple leveraged technology, communication, and entertainment to create something MORE than just a Graphical User Interface (or GUI), they created something useful for entertainment.  Apple products are a pleasure to use–, they created a “user experience.”  In the iPhone, even with its irritating lack of integrated e-mail calendar integration, it is a powerful business and personal communications tool which would have been considered a miniature PC a few years ago.

Apple didn’t really invent anything new.  Apple found that place of “convergence” with quality technology products and user experience

Apple didn’t invent the cell phone, portable music (remember Sony’s Walkman?), Internet data delivery (think, music sharing streaming software).  What Apple did was converge these technologies with a great front-end and delivery system.  Or as Steve Jobs has said, they “put a Mac in a cell phone.”  Apple also went one step further, they sought to own the entire content delivery infrastructure and the hardware architecture for their devices.  For the iPod it was the music delivery system (think iTunes), for the iPhone and iPad it was the extension of iTunes to add an Application store, etc.

That is an example of a product convergence that has had huge market impact.

Business and IT Convergence Can Transform Your Company

If we take this product concept one step further and apply it to IT and Business there are ways to bring about “convergence” in the IT enabled enterprise.

Business-technology convergence and business-technology management are terms that spring from a simple idea: Technology is a means for achieving business objectives; therefore, managing business and technology together provides significantly better results than managing them in separate silos. By converging business and technology management, enterprises can nimbly respond to changing marketplace dynamics, technology evolutions and competitive pressures—capabilities that are especially important during an economic downturn. [FN1]

[C]onverged enterprises know when to change the rules to maintain a strategic advantage over their competitors—and to sense and respond to changes in the marketplace.

I am a strong advocate for the convergence of roles between business and IT–, how will the IT organization know and understand the business “rules” without participating directly in business?

The best convergence candidates are likely your power users or super users who participated in your SAP project.  They come from the business but have exposure to the system and the challenges around IT.  The IT folks should also work in the business areas to become “super analysts.”  They need to know and understand how business actually gets done so they can figure out the best way to apply technology for business objectives to be addressed.

Completing the SAP Convergence

On top of the business users being integrated into IT and IT integrated into the business, the steering committee must not be disbanded.  This need cannot be stressed strongly enough.  That group of senior level business individuals are a key part of the “glue” for a successful and ongoing transformation of the business.  They are one of the critical ingredients for convergence to occur.

If you continue to develop your key business users and maintain your steering committee you have a power organization structure in place to build on convergence of business technology. For more information on the importance of continuing involvement by the steering committee long after the SAP project has gone live see my previous post on Using Your SAP Steering Committee for Business Transformation .

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[FN1]  http://www.baselinemag.com/c/a/Business-Intelligence/The-Value-of-Convergence-236013/

Related Posts:

• Business Strategy and IT Strategy to Reproduce Apple Innovation
• CRM, ERP, BI, and IT Investment — Where Do You Find the Business Benefit?
• Competitive Pressures and Value Propositions, Is Lean the Answer?
• The Real Reason Executive Participation Creates IT Project Success
• Tactics, Strategy, ROI, TCO and Realizing Business Benefit from SAP

The idea of innovation in business or IT is generally an aspiration to most.  Leaders and managers occasionally mention the need to innovate but when they stop to consider what that means many of them abandon it as an impossible dream.  They wait for some strange spark, some odd occurrence to somehow spark the flame of new beginnings.

Execution of the Innovation Process

Inspiration for innovation or creativity can come from anywhere.  Frequently the innovation problem isn’t a lack of good ideas, or even innovative solutions–, too often it is a lack of execution.  Even though I’ve laid out a proposed business model for an innovation process in the post From Collaboration to Innovation to Market – Toward a Working Model too often the champions, or the owners for the process are missing from the major stages of execution.  There must be an “owner” or a “champion” at each stage, they might be the same person, or it might be a different person, but each stage needs someone to champion the new innovation to maturity and then to completion or it will die in the process.

The three stages I have defined are concieve, develop, and market.  For example, the conceive stage might have a marketing or sales person “own” that process to its development handoff.  That does not mean that engineering or some other key person from the development area should not be active in the early conception stages, only that the stakeholder(s) with the most influence at that stage should own that portion of the process.  At the develop stage it might be key product or service leaders who then move the idea from infancy and from concept to tangible product or service offering.  And then finally the market stage must have a champion from sales or marketing (or both) to ensure that it is properly positioned and prepared for market trials and finally the sales launch.

Without that critical leader at each stage of the process there is little chance of many successful innovations in products or services.  Your innovation engine will quickly run out of gas and go nowhere.  If you pursue any kind of innovation initiative without these key champions any “innovation” that survives will likely be more like minor tweaks or changes, more like continuous improvement than real innovation.  Those small incremental changes are the only things that might survive the process without strong leaders moving them forward.

Business Product, Service, and IT Innovation Series

A structured approach to innovation, to creating new products or services is possible, but it takes a deliberate, concerted and focused effort.  I’ve laid out the various posts on this site that explore how to create a business-centered innovation process:

From Collaboration to Innovation to Market – Toward a Working Model
http://www.r3now.com/from-collaboration-to-innovation-to-market-toward-a-working-model

A process oriented approach toward a process model for moving from collaboration to innovation to market. A first pass at integrating collaboration with a structured creative process and moving from idea (conceive) to design (develop) to market (sell).

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Business Strategy and IT Strategy to Reproduce Apple Innovation
http://www.r3now.com/business-strategy-and-it-strategy-to-reproduce-apple-innovation

Overview of Apple Innovation and the focus on Jobs as the head of Apple. The apple innovation secret (if it can be called that at all) is about relentlessly pursuing the customer experience at the point of customer frustration. Where there is customer frustration or customer dissatisfaction there is opportunity for gaining market share for the company who is able to address that point of frustration.

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Striving for a Customer Focused Approach to Innovation 1 of 3
http://www.r3now.com/striving-for-a-customer-focused-approach-to-innovation-1-of-3

Categorizing and Defining the 3 primary types of corporate innovation. I’ve dubbed these as “Stoic” (minimalist or continuous improvient); the “Stretch” (striving for a known future state); and the “Maelstrom” (directionless chaotic storm of ideas). The names you use really don’t matter, but these are the 3 types of what companies call “innovation” that I have seen.

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Striving for a Customer Focused Approach to Innovation 2 of 3
http://www.r3now.com/striving-for-a-customer-focused-approach-to-innovation-2-of-3

Explaining the use of an “innovation narrative” in the “Stretch” type of innovation. This method produces a future state narrative which may not be achievable but provides a customer and market focused direction to aspire to for new products or services. That narrative acts as a future state blueprint for product or service development to move toward.

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Striving for a Customer Focused Approach to Innovation 3 of 3
http://www.r3now.com/striving-for-a-customer-focused-approach-to-innovation-3-of-3

Practical ideas and practical application of some methods of moving toward an innovation culture. Some specific examples around how SAP (the big ERP vendor) has been very successful at integrating their customers, vendors, and their internal organization into an extended development dialog are explored. Includes an overview of how this all ties into the collaboration model I started in a post entitled “From Collaboration to Innovation to Market – Toward a Working Model”.

Good luck on your innovation journey!

Related Posts:

• Competitive Pressures and Value Propositions, Is Lean the Answer?
• Striving for a Customer Focused Approach to Innovation 3 of 3
• The Real Reason Executive Participation Creates IT Project Success
• Tactics, Strategy, ROI, TCO and Realizing Business Benefit from SAP
• Business Strategy and IT Strategy to Reproduce Apple Innovation