Differentiation vs Integration (Addenda)

22 Jun

After completing my post on different kinds of differentiation the other day I still had a number of points left over that didn’t really fit neatly into the flow of the arguments I presented.  I still think some of them are interesting, though, and so thought I’d add them as addendums to my previous post!

Addendum 1

The first point was a general feeling that ‘standardisation’ is a good thing from an IT perspective.  This stemmed from one of Richard’s explicit statements that:

“Many people in the IT world take for granted that standardization (reduction in variety) is a good thing”

Interestingly it is true to say that from an IT perspective standardisation is generally a good thing (since IT is an infrastructural capability).  Such standardisation, however, must allow for key variances that allow people to configure and consume the standardised applications and systems in a way that enables them to reach their goals (so they must support configuration for each ‘tenant’).  Echoing my other post on evolution – in order to consider this at both an organisational and a market level – we can see that a shift to cloud computing (and ultimately consumption of specialised business capabilities across organisational boundaries) opens up a wider vista than is traditionally available within a single company.

In the traditional way of thinking about IT people within a single organisation are looking to increase standardisation as a valid way of reducing costs and increasing reliability within the bounds of a single organisation’s IT estate.  The issue with this is that such IT standardisation often forces inappropriate standardisation – both in terms of technology support and change processes – on capabilities within the business (something I talked about a while ago).  Essentially the need to standardise for operational IT efficiency tries to override the often genuine cost and capability differences required by each business area.  In addition on-premise solutions have rarely been created with simple mass-configuration in mind, requiring expensive IT customisation and integration to create a single ‘standard’ solution that cannot be varied by tenant (tenant in this case being a business capability with different needs).  Such tensions result in a constant war between IT and the single ‘standard’ solution they can afford to support and individual business capabilities and the different cost and capability requirements they have (which often results in departmental or ‘shadow’ IT implemented by end users outside the control of the IT department).

The interesting point about this, however, is that cloud computing allows organisations to make use of many platforms and applications without a) the upfront expenditure usually required for hardware, training and operational setup and b) the ongoing operational management costs.  In this instance the valid reasons that IT departments try to drive towards standardisation – i.e. reducing the number of heterogeneous technologies they must deploy, manage and upgrade – largely disappear.  If we also accept that IT is essentially infrastructural in nature – and hence provides no differentiation – then we can easily rely on external technology platforms to provide standardisation and economies of scale on our behalf without having to mandate a single platform or application to gain these efficiencies.  At this point we can turn the traditional model on its head – we can choose different platforms and applications for each capability dependent on its needs without sacrificing any of the benefits of standardisation (subject to the applications and platforms supporting interoperability standards to facilitate integration).  Significant and transformational improvements enabled by capability-specific optimisation of the business is therefore (almost tragically) dependent on freeing ourselves from the drag of internal IT.

Addendum 2

Richard also highlighted the fact that there is still a strong belief in many quarters that ‘business architecture’ should be an IT discipline (largely I guess from people who can’t read?).  I believe that ‘business’ architecture is fundamentally about propositions, structure and culture before anything else and that IT is simply one element of a lower level set of implementation decisions.  Whilst IT people may have a leg up on the required ‘structured thinking’ aspects necessary to think about a businesses architecture I feel that any suggestion that business owners are too stupid to design their own organisations – especially using abstraction methods like capabilities – seems outrageous to me.  IT people have an increasingly strong role to play in ‘fusing’ with business colleagues to more rapidly implement differentiating capabilities but they don’t own the business.  Additionally, continued IT ownership of business architecture and EA causes two additional issues: 1) IT architecture techniques are still a long way in advance of business architecture techniques and this means it is faster, easier and more natural for IT people to concentrate on this; and 2) The lack of business people working in the field – since they don’t know IT – limits the rate at which the harder questions about propositions and organisational fitness are being asked and tackled.  As a result – at least from my perspective – ‘business architecture’ owned by IT delivers a potential double whammy against progress; on the one hand it leads to a profusion of IT-centric EA efforts targeted at low interest areas like IT efficiency or cost reduction whilst on the other it allows people to avoid studying, codifying and tackling the real business architecture issues that could be major strategic levers.

Addendum 3

As a final quick aside the model that I discussed for viewing an organisation as a set of business capabilities gives rise to the need for different ‘kinds’ of business architects with many levels of responsibility.  Essentially you can be a business architect helping the overall enterprise to understand what capabilities are needed to realise value streams (so having an enterprise and market view of ‘what’ is required) through to a business architect responsible for how a given capability is actually implemented in terms of process, people and technology (so having an implementation view of ‘how’ to realise a specific ‘what’).  In this latter case – for capabilities that are infrastructural in nature and thus require high standardisation – it may still be appropriate to use detailed, scientific management approaches.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: