Business World has an interview with SAP’s Shai Agassi on the growing importance of process innovation. Excerpts:
Ten years ago the challenge was to reduce the time a market opportunity was spotted to the time a company was able to develop an appropriate product, get parts from suppliers and ship it to the customers. By and large we have brought that down. Companies can do that in two weeks to a month. The next phase will be about change management.
The time between a CEO deciding on a strategy and the IT systems reflecting that strategy is what is a challenge today. Today there is a difference of at least a year or 18 months between a strategic decision and the IT systems reflecting that change. This is because a lot of time we are dealing with software code that is not in accordance with the business model. The main change you will see over the next three years is that software firms will move from shipping code to shipping executable business models.
[The technological things that will make this possible are] the emergence of web services standards and what we call the enterprise services architecture. The enterprise service architecture will take existing engines like, say, finance or production, and repackage them by combining them to form new applications. (Thus, combine finance with production to get the optimum capacity utilisation.)
This is a very big change – the creation of enterprise-wide platforms to get integration from one end to another complete with user integration, process integration, including data and knowledge integration, in one environment.
This seems quite similar to the points made by Howard Smith and Peter Fingar in their book “Business Process Management.”
