The unrestrained spending by the worlds big companies on technology in the 1990s has now slowed (and in some segments, even reversed). The one driver for all IT spending now is ROTI Return on Technology Investment. Companies want to see quantifiable returns in a defined time-frame. They no longer have a desire for the next new thing. Questions like Do I really need it? What is the benefit? How quickly will I see the payback? Do we really have to spend so much? are being asked of enterprise technology spending.
This has come about because of three factors: a worldwide slowdown in sales due to a global recession and vanishing growth, a realization that companies spent too much on technology in the previous decade, and perhaps, surprisingly, an increase in productivity due to IT as has been evident in the US productivity statistics which came out recently. Companies are now getting more for less (and from fewer people).
At the same time, there are changes afoot. Seen in isolation, these may seem incremental. Taken together, they promise the next wave in enterprise computing. Many of these changes are built upon the automation of the back-office and partial automation of the front-office. But the biggest impact is happening due to the Internet. The ubiquitous connectivity which is now happening, the reduction in communications and interactions costs, the seamless sharing of information across enterprises are all laying the foundation for a new set of innovations.
We will discuss the trends in enterprise software by looking at four aspects: the target markets, standards, information flows and the emerging technology infrastructure.
The market segment which is only now beginning to feel the impact the technology is the small and medium enterprise (SME) segment, especially in emerging markets. Typically, SMEs lag the larger companies in technology adoption by 3-5 years. Their time has now come. They do not want piecemeal solutions for aggregation, their need is for whole solutions.
Standardisation is driving the world of not just software but also business processes. Web services promise to make computing the next-generation utility. Standardisation of business processes will ease the flow of information across enterprises. Taken together, they offer the Holy Grail of software: re-usable software components. In fact, this idea can be taken further in the creation of open source business components libraries of business process which companies can inherit and perhaps customise.
Companies are realising that, increasingly, the game is about managing information flow within the enterprise and across the value chain. The Real-Time, Extended Enterprise is here. Information is getting out of the silos and getting integrated being routed to decision-makers via enterprise information portals either on the desktop or on their wireless devices. Weblogs promise a new way of extracting hidden knowledge among employees. Two driving themes are collaboration and analytics.
At the same time, the technology infrastructure among enterprises is also undergoing some change. Open-source software is much more acceptable. Storage is no longer a constraining factor as desktops are coming with more disk space than what most of us may need in a lifetime. The platform for distributed computing is being laid. Wireless networks and devices make us reachable everywhere. Search engines like Google make it possible to get access to almost anything if is out there.
We will examine each of these areas in the coming columns, and then see how the new generation of enterprise software solutions can be constructed.
Tomorrow: New Markets