Monday, March 28, 2016
Are custom solutions really a viable option in the current state of IT applications ?
Being a market leader has its advantages; you can get away with a lot of things, customers tolerate a lot more than they would with startups or mid players. The market looks up to you for direction and whatever you do gets imitated quickly. Even if you are not innovating or creating new products, your copy outsells others by virtue of base effect. After all reaching the pinnacle of success and building a reputation takes a lot of effort and you have to do the business better than everyone else in the same business.
That is how it appears from outside to the external world and to a large extent from within to partners, employees and customers; because most of them don’t get to see the machinery that runs the business. In the background the robust technology solutions keep the business running with every transaction for every customer across products, geographies and hype waves that keep appearing with regular frequency. Inefficiencies if any surface as customer incidents and get addressed efficiently.
When news emerged that a top 5 leading global company wanted to engage domain and technology experts for their planned technology refresh, it was big news in the consulting industry. Everyone who had any experience in the industry wanted to pitch for the business, at least part of it if possible. It was well known that the company had a collection of all kinds of technologies somehow intertwined and operating together; being early adopters during the mainframe days, they had custom developed everything they used, well almost !
With the evolving software solution market, many younger and smaller competitors had embraced the COTS world (Commercial Off-The-Shelf) and successfully keep moving ahead of the technology curve. Thus they enjoyed the benefits of automation with faster and cheaper processes which did give them the advantage of being able to react fast to market. On the other hand, the company continued to stay with their legacy bespoke solutions serviced by a large contingent of people who had spent decades in the company.
Innovative products by the leader were quickly copied by the nimble with a technology edge; the reverse too happened fairly quickly which belied imagination of the market considering the size of the company. It was fairly evident that custom tech solutions did not slow down the leader. People poached by competitors talked about tight alignment of objectives between business and IT as the secret sauce; legendary leadership and culture had sustained the business through difficult and good times.
A century of existence ensured they were miles ahead of their nearest competitor, but the gap was slowly and surely being bridged. Retirement of first and second generation of IT leadership brought some doubts about sustaining continued success. The next generation technology leaders had grown with COTS and found it challenging to continue the existing paradigm. Since the company had gained leadership position and sustained it well, and status quo was not an option, they approached the predicament with kid’s gloves.
And that is how the market went abuzz with an opportunity that sought qualified expert opinions on the future path. Should they move to a COTS model ? Sustain their existing seemingly crumbling monolithic yet fragmented solution ? Rebuild a replacement solution ground up with the experience and domain expertise within, or take a hybrid approach with parts of the legacy being chipped off and replaced with COTS ? And there was the Cloud and what not to consider in their new reference architecture.
Debates grew with every consulting company worth a name throwing their hat into the ring; some approaching the situation directly with the new IT leadership, few used Board level contacts and many pitched to different parts of the business; each had an opinion and pushed a viewpoint based on their frame of reference and comfort. Consensus eluded them with the landscape confusing them even more than where they began from; finally they decided to engage a few individual experts and go at it themselves.
My view: re-architect with best of breed COTS, prioritize investments and set a stretch timeline. Involve people across layers, make sure that quantum of change and potential disruption is known upfront. Execute with chip and consolidate actions while leveraging core domain expertise that runs the business. That part of legacy would be the last piece to change. COTS offers one key advantage that the solution becomes people agnostic, which custom solutions don’t. So the journey moves from legacy to hybrid to COTS.
If you were the CIO or Advisor, which approach would you choose ? How would you strategize ?