IBM and Partners Vow to Break IT Cement - InformationWeek

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IBM and Partners Vow to Break IT Cement

Forget code generators. It's time to reach for the jackhammers. "Historically, information technology has poured cement over business processes," said Steve Mills, IBM Software Group senior vice president, at a gathering of the group's top 200 customers in San Francisco.

Forget code generators. It's time to reach for the jackhammers. "Historically, information technology has poured cement over business processes," said Steve Mills, IBM Software Group senior vice president, at a gathering of the group's top 200 customers in San Francisco. "If I want to run my business around rules and processes, I need an underlying infrastructure that is responsive." And when it comes to how IT builds and manages systems--and the role of vendors such as IBM in supporting traditional IT behavior — Mills senses customers' urgency for a little creative destruction.

The primary news at the event was the announcement of a significant partnership with Lawson Software. The ERP vendor will use IBM WebSphere as the service-oriented architecture (SOA) execution environment for future versions of its ERP applications. "We've been pouring cement in the ERP world, too," said Lawson chief product officer Dean Hager, "but our cement dries faster." Many of Lawson's customers have had to use object-oriented middleware to wrap business processes around the ERP systems, which Hager feels exposes them to "the risk of building even more complex systems." IBM and Lawson will go to market with pre-integrated solutions that will include vertical applications tuned to the ERP vendor's midmarket customer base in service-oriented industries, according to Hager.

Outside the press conference, the San Francisco meeting was closed to the press. Only a fly on the wall could report what was really said as IBM "broke cement" with its biggest customers. However, Mills's address at the Gartner Symposium ITxpo a couple of weeks later may have revealed the tenor of the meetings. He advised organizations that it was time to "starve developers" who, if given time and resources, will try to "reinvent everything that's come before." In sum, IBM intends to be a business — not an IT — partner with its customers. Technology must bow before the almighty ROI. If it ever did, technology for technology's sake won't cut it now.

The labor-intensive nature of IT is also under scrutiny as businesses look to stay ahead of the productivity curve. This message was reinforced by Fireman's Fund CIO Fred Matteson, an IBM customer who spoke at the press conference. Matteson, who held a similar position at Charles Schwab about 18 months ago, has engaged in a great deal of outsourcing, working with not only IBM Global Solutions but also Accenture and Bearing Point. "I can't retool my IT fast enough," he said. "If I tried, my successor might have a nice job here, but I wouldn't last." He noted that the insurance business is highly "opportunistic," which puts pressure on IT to build new information products rapidly.

Outsourcing made sense after significantly restructuring Fireman's Fund. A scaled-down IT group still had to support the same 500 operations. To clear away paper-based processes and other legacy systems that "made us really hard to do business with," Matteson realized he'd have to double IT output while lowering unit costs. Matteson sees that IT must move from being a fixed cost to a variable cost. "I want to rent programmers rather than buy them so that as markets expand I can increase the amount of work."

Companies today want business growth — not IT growth. They don't want IT "cement" to block the success of mergers and acquisitions or their ability to seize immediate market opportunities. And in Mills's view, it'll be celery, breadsticks and water for developers until they get with the program.

[ KEY PERFORMANCE INDICATORS ]
Data Security

Sensitive corporate data is being attacked from all sides. In recent weeks, we've heard about companies using computer viruses to spy on competitors and misusing software vendors' bug tracking databases to discover competitors' system vulnerabilities, as well as collection agencies buying customer data from bank employees.
Lawson Software

Lawson says it acquired Swedish company Intentia International to become the biggest ERP vendor focused on the midmarket, but some doubt its wisdom. Intentia has been operating at a loss for six years. Also, Lawson's estimate that Intentia's and its $1 billion market each equals a combined opportunity of $5.8 billion may be overly optimistic.
On-Demand Software

Worldwide spending for on-demand software was $4.2 billion in 2004 and will reach $10.7 billion by 2009 if IDC's projections are correct. But it's not just small and midsized companies that are driving the use of application services in lieu of installed software. Global enterprises such as Procter & Gamble and Dow are also buying in to the idea.

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