Recessionary crises

Perhaps now is the time for a little subversive transformation, says Dr. Richard Sykes of Steria.

The instinctive response to the current recessionary crises is to freeze into stasis. The CFO is hoarding cash (so definitely no capex) and the CEO is aggressively scrutinising headcount. It is not the time to take risks and launch new projects. And yet the crisis looks set to be both severe and long lasting, so is now really the time to reinforce the status quo? Especially if it includes inflexible and expensive to maintain legacy?

Time, rather, for a little subversive transformation. Indeed, two transformational exercises will speedily deliver the immediate benefits of sharply reduced operational costs and increased operational flexibilities.

But subversively? SOA technical architectures now enable the means to cut the Gordian legacy knot of older, tightly integrated architectures without the need for mega projects that take years to deliver with all their investments of human resource and capex. New generation business process management capabilities, built holistically with open systems/SOA architectures at their core, can be used to deconstruct legacy structures in virtual terms.
This enables the implementation of systems change through simpler and shorter term projects that, by steadily breaking the restraints of tightly coupled legacy, will deliver returns measured in months rather than years. These are projects that can be managed as opex exercises.
In aggregate their impact is transformational – but compared to classic transformational initiatives, subversive. Ian Thompson, former Managing Director, Group Operational Services at Lloyds TSB, comments: “Balancing the long-term business requirements for modernisation with the shorter term P&L needs as well as the current capital constraints is one of the biggest challenges CIOs face today. Setting out a strategic road map including SaaS and virtualisation and then implementing fast, short-term projects can provide the win-win that the CIO is striving for."

So what are these two transformational exercises? The first is the determined commoditisation through virtualisation of data processing, data storage and data networking requirements. Through conversion of the business’s own facilities or through migration onto externally-sourced ‘on-demand’ infrastructural services ‘from the Cloud’ (or a mix of both), the outcome is the same: business operations underwritten by a specifically crafted platform of highly scalable on-demand capacity, delivering much reduced and commoditised transactional costs, a flexibility for further change, and the end of the need to raid the corporate capital programme.

The second is the developing SaaS transformation of the software supply chain. Generic back office and front office systems requirements can increasingly be sourced as standardised and competitively priced SaaS capabilities – and the same SOA architectures enable them to be easily managed and integrated with in-house delivered systems on the operational platforms described above.

Steria’s Financial Services Sector managing director Yvonne Spalding is keen on this type of subversion. She comments: “The combined exploitation of these two developments represents a significantly transformational journey. This requires careful scoping and design, as all change brings new risks in ensuring the maintenance of security and continuity with the assurance of unbroken legal and regulatory compliance. Steria is a trusted partner of choice in crafting and making this journey, able to draw on extensive experience at every step. And the design of the journey as a series of distinct and short-term projects, with rapid pay backs, to be delivered within the restraints of the business’s opex cash flows, plays to the core of our solutions creativity: a leader in delivering the subversive transformation business model.”

So the CIO is now on side – no capex requirements and a sharp reduction in operational costs. And the CEO? In tough times, the focus has to be on ensuring the business has the right people focused on the right roles in delivering front line competitive core competencies. The transformational journey scoped here modernises and commoditises underlying infrastructural and back office operations, so that the people agenda can be correctly re-focused where it really counts – on exploiting those front line competitive core competencies. Making the CEO delighted.

Dr Richard Sykes is Director of Services for Bloor Research. He is an advisor in the strategic transformation of technology & business process sourcing, outsourcing and offshoring business models. Group VP IT of chemical major ICI in the 1990’s, he is an elected member of the Board of Intellect, the UK business association of the IT, Telecoms and Electronics industries.