Today’s enterprise is no longer confined to the four walls of its corporate campus. Growing emphasis on collaboration, efficiency and innovation is changing the behavior of today’s enterprise; this change is impacting the IT landscape as well. As the enterprise grows to integrate business partners, customers and other parties into its fold, business leaders expect the IT needs to follow suit. The diagram below depicts the extended enterprise and its influence on IT systems.
Increasing adoption of social media is providing organizations with a channel to improve their customer interaction. Focus on collaboration with business partners and suppliers is resulting in cross-enterprise applications.
Another key element of the extended enterprise is the evolution of cloud and SaaS (Software as a Service)- based applications. CIOs are increasingly viewing cloud and SaaS as alternatives to save IT costs and improve the value of the IT dollars they spend. The success of organizations like Salesforce.com is a clear testimony to the growing clout of cloud/SaaS-based applications.
Adoption is happening now. Over 32 percent of the respondents of a Microsoft-commissioned survey were ready to move all their applications to the cloud. The survey queried 3,000 retail business decision-makers in the U.S.
Managing information in the cloud
Every organization that adopts a cloud or SaaS model needs to analyze the impact of this adoption on its information assets, governance and security. Every enterprise today acknowledges information is a key asset and wants to use it to differentiate itself to its customers and extended business partners. Despite this acknowledgement, barely 75 percent of organizations see information integrity hampering their business objectives and only 41 percent have a formal plan to address it, according to Gartner.
While organizations continue to struggle with management of their in-house information assets, the challenge magnifies when IT systems reside outside the enterprise firewall. The unique value proposition of any cloud or SaaS provider is speed of deployment at a reduced cost. This is possible because the organization has to adopt the service provider’s business processes and information architecture. The biggest risk is the creation of information silos outside the organizations fire wall with little or no governance. Many cloud/SaaS providers do not have a well-defined strategy to manage the spread of information within and outside an organization’s fire wall; enterprises must consider this cost in their business case. Most cloud/SaaS initiatives require additional investments for seamless integration of the provider’s external systems into their in-house systems.
Case In Point: A manufacturing case study
A leading manufacturer decided to adopt Salesforece.com as its CRM platform, which moved front office processes to a cloud-based application. While this move helped the organization simplify and accelerate the deployment of its front office applications, it posed a significant challenge around integration and management of information between the front and back office applications.
To address this challenge, the organization embarked on a strategic information transformation initiative to develop flexible information architecture, establish governance processes and create a robust integration framework that enabled management and exchange of core information objects without compromising on the information architecture of the front and back office applications. This required the creation of a seamless integration layer powered by a master data management application that housed the common information architecture to support both the applications.
This scenario clearly articulates the importance of well-defined information management processes to manage a diverse landscape of applications including SaaS and cloud. Organizations that have not assessed the impact of the cloud/SaaS migration to their information landscape impair their ability to integrate the information across the in-house and hosted applications; the result: information silos and an inability to tap into this information so valuable for decision making.
Pitfalls to avoid
A myopic view around the adoption of cloud/SaaS models can clearly have an adverse impact on an organization’s decision-making capability in the long run. For instance, a leading retailer that outsourced its application hosting to cloud/SaaS providers was forced to bring its e-commerce application back in-house when it faced integration challenges between its enterprise applications and the e-commerce application; this resulted in inconsistent product pricing, undelivered orders and so on. Why? The incompatibility of the core information objects across the landscape created the inefficient processes. The retailer has now embarked on an enterprise information management initiative to drive consistency of information across its landscape; this is an important learning.
Organizations moving their applications from an in-house to a hosted model must pay adequate attention to the information management practices of the hosting provider. Some of the key points organizations need to address include:
- The compatibility of the cloud/SaaS information model and the organization’s information model
- The application provider’s strategy for data governance across the enterprise as well as the cloud and SaaS applications
- The application provider’s security strategy
- The application provider’s integration strategies and its adherence to in-house integration standards
As the adoption of cloud/SaaS-based applications increases, every buyer needs to understand the impact of these applications on the enterprise information landscape. The emergence of SaaS applications to address specific business processes/functions clearly shows the target market for such applications is moving away from the CIO’s office to the lines of business.
While SaaS and cloud-based applications provide the flexibility and agility to meet business needs, the buyer needs to ask his/her solution provider the tough questions around both its information management processes and its ability to integrate its applications with an enterprise information architecture within the enterprise firewall. Every buyer must clearly articulate the impact of the cloud/SaaS application on the organization’s information management processes and account for investments to align the new application with the enterprise information standards.