Business Applications Trends: 2016
The world of business applications is changing.
Today most business applications still run as autonomous walled gardens. A CRM system bought and deployed by one department seldom talks to a supply chain management (SCM) system bought by another.
But business applications already account for about $300 billion in global IT spend. So it comes as little surprise that in a world where businesses, suppliers, and customers are undergoing profound change, so too is the world of business applications.
And the transformation is more than a revamp – it’s a major reconstruction that includes:
- Crowdworking. This constitutes replacing traditional small, localized teams with a larger pool of diverse workers. Such crowds take on major work activities by subdividing large tasks into micro-tasks.
- Micro business services. Legacy business applications designed around best practices are morphing into micro services that can be assembled on the fly to meet changing requirements.
- Dynamic supply chain. The concept of front- and back-end applications is beginning to erode, as the idea of end-to-end dynamic supply chain applications comes to the fore.
- Dark data. A long overdue ‘dark data’ (otherwise known as ‘junk’) cleanup is rising up the agenda within many organizations, and the problem of long-term silos of redundant content is starting to be addressed and removed.
Crowdworking – The New Team Model
The world of bring-your-own-device (BYOD), outsourcing, and crowdsourcing has spawned an increasingly disconnected and fragmented environment.
Within it, workforce structures are changing at a faster pace than companies’ ability to effectively manage that change. At one end of the spectrum, we see long-tenured positions falling away; at the other end, we see novel yet highly disruptive crowdsourcing gaining traction.
New approaches and technologies are evolving. While traditional team-collaboration tools focus on well-defined groups of workers, newer crowd technologies are focusing on larger groups of unconnected workers.
Such crowds are taking on major work activities by subdividing large tasks into micro-tasks – then crowd technologies are helping them reassemble the micro-deliverables into a whole.
Work that would have taken weeks or months with a small team of specialists can be done by a large crowd of workers in hours or days.
For example, some organizations are already using such technologies to rapidly speed up the legal review of complex documents and surveillance footage. The work is partitioned into small anonymous elements and outsourced via a crowdworking platform to hundreds or thousands of people, who then rapidly turn it around.
Even firms that don’t leverage crowd workers do want to regain the control they’ve lost as workers become more transient, remote, and organizationally disjointed.
Recommendation. Figure out strategies to communicate with workers in their time and on their devices.
Take a page from the crowd work model – such as using analytics, and broader task and micro-task management – and apply those techniques more generally in the workplace.
In sum, highly granular task management in the world of crowdworking has a role in worker management and should be explored at a strategic level. In this regard, early movers are targeting specific industries and worker groups. In particular, IBM has pioneered the concept of ‘smarter working,’ and many of its investments in areas like predictive analytics are starting to pay off.
On the other hand, traditional collaboration vendors touting stand-alone systems and refusing to integrate with existing business applications are finding themselves left behind.
The Rise of Micro Services and the Digital Supply Chain
Business applications have historically been viewed with a silo mentality.
A CRM system handles the capture and management of customer data records, but often a different, disconnected logistics application manages the shipment and delivery process.
The result is limited interoperability – if any – between applications. Moreover, integration projects are expensive and time-consuming.
In the past, such an arrangement was good news for technology suppliers, which benefitted from large software licensing fees and by supplying the skills, at a premium, for integration projects. But change is afoot:
- SaaS is causing this model to erode, with large up front licensing fees giving way to a more pragmatic subscription-based model. At the same time, the problem of integration has shifted over from the enterprise customer to the SaaS supplier.
- Application Programming Interfaces (APIs) are now the rage. This has enabled traditional business application vendors to open up access to their applications and shift to a ‘platform’ focus.
- Success to date has been limited to back-end applications like production, finance and fulfillment. Front-end demand-side applications such as customer support have yet to find traction.
In sum, traditional notions of front-end and back-end business applications are being replaced by the more holistic notion of an integrated supply chain.
As part of the transformation, there is increased demand for a greater degree of automation and consistency across entire buying cycles.
More and more the focus is on developing linkages to support a dynamic supply chain that joins front- and back-end applications.
This represents a fundamental shift for business application vendors. The supply chain is starting to be linked together at each point – from customer prospecting to manufacturing to fulfillment and the associated financial transactions.
Although progress is already underway, realistically it will be a decade or more before the supply chain is fully dynamic and integrated.
Recommendation. In the short term, enterprises should find ways to surface, display and maintain data from a number of adjacent business applications and tie them into a unified process.
Examples of this can be seen in operations like sales enablement, where the various systems used by sales professionals are wrapped up in a single easy-to-use productivity application.
The winners here would appear to be fresh-faced vendors and cloud startups. But don’t rule out the legacy vendors. As Oracle has most recently shown, legacy vendors have huge resources at their disposal, as well as an incumbent customer base to build integrated, full featured applications.
When done right, legacy vendors can also offer their customers an incentivized and well-orchestrated migration path.
Dark Data Dilemma
The vast majority of files stored on enterprise networks represent ‘dark data’ – all the data an enterprise accumulates that is not actually used. Thus, enterprises have no insight into whether or not the data is valuable.
Dark data has accumulated because nobody wants to take responsibility for destroying corporate information, no matter how useless or redundant it may be.
There are two opposing views on dark data:
- On one side are those who feel storage is cheap, and that accumulated data may become very valuable at some point – when there’s finally time to analyze it.
- The flip side argues that it’s junk, and costly junk at that. This accumulated data impedes the efficiency and effectiveness of the enterprise.
Regardless, this junk should be dealt with – albeit carefully – and that work is now starting to happen within some enterprises.
An Obstacle to Migration. When business applications require a major upgrade or a move to the cloud, dark data can become quite costly, making the migration to a new environment even more cumbersome and complex.
SaaS vendors that are replacing on-premises legacy applications have found dark data to be an obstacle to migration. But some vendors have come up with a new game plan – building their own migration tools or partnering with specialists such as Kofax, Metalogix, and Tervela.
Their tools automate a rules-based migration process that can safely and compliantly deal with redundant data. Such migration automation tools are helping application vendors encourage enterprises to address their situation.
Recommendation. Clean out redundant data. Start with aging file servers and other locations like Microsoft Exchange and the repositories in regular business applications.
When shopping for SaaS solutions, look for application vendors that provide cleanup of legacy data as part of the migration process. Such cleanup exercises are able to deliver an immediate ROI.
Finally, be aware there is rarely a pile of gold here. Junk data is an expensive ball and chain that normally inhibits migration to cloud. Ideally a fresh start on a new platform should be unencumbered and free from mountains of dark data.
Summary
The dynamics of the workforce are changing and new models such as crowdworking and micro-business services are transforming how workers engage with each other as well as their business.
In addition, over time we are seeing a gradual convergence of traditional front- and back-end applications that previously ran autonomously. Today they are starting to become integrated into overall supply chains and SaaS delivery.
While the overall vision is there, a lot still needs to be done to consolidate the many moving parts and transform autonomous business applications into integrated, reliable and affordable end-to-end supply chains.
You can access the complete 451 Research report here.
