Digital Transformation and the Creative Destruction of Enterprise IT in 2015

21 January 2015
 

Over the last three years Storm has worked on a number of digital transformation programmes for clients in healthcare, financial services, publishing, logistics, business services and public services. This work has been characterised by the design, build, deployment and maintenance of transactional digital services that integrate with back office systems.

Delivered using agile methodologies with a strong focus on user experience design these programmes have given us clear insight into the challenges, benefits and trends currently affecting what is known as Enterprise IT.

The rationale for undertaking digital transformation is typically to create competitive advantage by:

  • Increasing service delivery efficiencies through channel shift or
  • Generating superior customer acquisition rates through use of digital channels

From our experience it is clear that digital transformation in 2015 is set to go far deeper into the enterprise with the winners not simply automating existing business processes but fully digitising their business models.

Successful businesses will put digitalisation at the core and the implications for traditional Enterprise IT architecture are profound.

The world of personal computers, laptops and on premise server infrastructure offering line of business client applications has become extremely complex, expensive to maintain and hard to change. The associated range of security protocols required to support this architecture such as VPNs, firewalls, multiple passwords etc are often contributing to reduced efficiency and increased frustrations for end users. The irony being that these measures often provide questionable value in terms of the increased security they purport to provide.

The changing nature of productivity within major enterprises in 2015 and beyond will see business users increasingly demand information and technology that supports better collaboration and mobility to enable people and processes to be more productive.

Equally business leaders increasingly want shorter software deployment cycles to support continual improvement of digital services as it is clear that faster, iterative releases in response to user needs are far more effective than complex specifications and up front planning.

Successful companies who make the transition will adapt to make use of public cloud services, improved information provision and solution interfaces enabling interoperability of data and services with diverse array of mobile devices.

Cloud

The rapid shift to cloud is happening more quickly than many realise.  Traditionally the benefits of cloud hosting have been arguments for server virtualisation – decoupling from hardware dependencies, more efficient use of resources, increased flexibility and lower costs.

This Infrastructure as a Service (IaaS) model has delivered tremendous business benefit(s).  However it is increasingly recognised that the rapid shift to public cloud is ever more driven by the opportunity offered from cloud services that are layered on top of the IaaS layer.

Often referred to as Platform as a Service (PaaS) services such as API management, desktop virtualisation, queuing, notifications, multi-factor authentication, mobile app integration services and even machine learning capability are enabling IT configurations with increased security, speed to market, flexibility and lowered costs.

The benefits of the PaaS model are significant. From significantly reducing development and deployment timescales to taking advantage of continual improvements and being insulated from the responsibility of maintenance and updates.

Given the economies of scale and level of investment required the continual pace of innovation from the likes of Microsoft’s Azure and Amazon’s Web Services (AWS) is virtually impossible for even large traditional hosting companies to match.  “Hybrid Cloud” solutions which are simply rebranded virtualised legacy hosting solutions are a poor compromise.  The illusion that these provide increased control and the red herring of any security benefits will fade during 2015 as businesses realise significant competitive advantage from leveraging cloud services while in fact gaining greater control and tighter security.

If Socrates was right and “The secret of change is to focus all of your energy, not on fighting the old, but on building the new” then the answer lies inleaving the legacy applications on the on premise infrastructure.  Instead focus on leveraging the public cloud for new applications and over time replace legacy systems with new applications that fully exploit the opportunities presented by this revised landscape.

APIs

The shift to cloud driven architectures will result in a renewed focus on how data, events and reports flow in and out of systems using APIs.

APIs have been around for some time.  However their influence has been growing over the last few years particularly with the shift to cloud, rise of mobile devices and the adoption of externally hosted service orientated architectures.

By thinking first about the API rather than the end point, such as a web application, you decouple the user interface from the data and business logic.  The end point may well be a web browser or a mobile app but with everything from televisions, cars, thermostats and white goods becoming digitally connected the abstraction of the data and business logic from the end device will offer the flexibility required to create new routes to market for services either directly by the company itself or a via partners that leverage the company APIs.

Equally there is a strong case that API driven architectures offer more not less security.  The likes of Azure now offer API management as a service which provides documentation, delivery of multiple formats, scalability, reporting and throttling out of the box. Also included are authentication and security protocols including oAUth2 and certificates.

In 2015 all major enterprises need to consider how best to create, manage and exploit APIs to deliver services to the diverse range of digitally connected end user devices.

Mobile

The rapid shift to mobile access among consumers is one of the largest and most significant technological shifts in history. Benedict Evans presentation on mobile eating the world in November 2014 demonstrates that mobile is a global trend with sales now dwarfing those of PCs.

Global mobile growth to 2020

Every adult in the world will have a smartphone by 2020

Smart phone sales vs pc sales

Smart phone sales Vs PCs

In all this hype from the consumer side, it is clear that the corporate enterprise is beginning to catch up.  Many predict an enormous increase in enterprise-managed mobile devices in 2015, largely driven by tablets, (specifically iPads with keyboard attachments), deployed to complement and ultimately replace PCs.

The growth of mobile in the enterprise presents a number of challenges for CIOs including:

  • How do I manage mobile device diversity?
  • How do I securely and effectively integrate mobile with other systems?
  • How do I approach the build of mobile apps?

Mobile Device Management

The transition from managing PCs to managing mobile devices is a major challenge for modern CIOs. Indeed recent major information security breaches at the likes of Sony have led some to state that it is becoming too difficult to maintain security over PCs and meet the demands for increased mobility and collaboration.  On the other hand the introduction of mobile devices into the enterprise also presents a security risk.  What is clear from the wider trend on mobile and wearables is that the ecosystem of digitally connected devices will only diversify over time.

As such mobile device management (MDM) services that effectively mimic the PC approach to device security (e.g. log-on scripts, arbitrary code inserted etc) should be challenged.  On PC’s this approach has often led to compromises on performance, compatibility and usability – the continual use of legacy browsers in large corporates is a good example.  There is strong evidence to suggest that the same will end up being true of MDM services used on mobile devices.

Thus key recommendations here include:

  • Security measures which affect usability, such as slowing down the device or reducing battery performance, should be reconsidered.
  • Get comfortable with the idea of trusted and untrusted apps co-existing on the same device.
  • Consider placing authentication mechanisms within the mobile apps themselves.

Integrating Mobile apps with other systems

Earlier in this post we talked about the increasing importance of APIs as they connect cloud services and mobile devices.  This has been recognised for a while by public cloud providers who have responded by developing services to support the secured data exchange between mobile devices and cloud.

Azure Mobile Services for example supports the option to add corporate sign on protocols such as Active Directory easily.  It offers web services that enable end users to work on an app offline and then sync changes later when a connection is available and caching services to leverage local device data storage.  While all this was possible before using custom development the availability of these services to developers helps reduce development times and provides surrounding security, scale and reporting that is often required.

Mobile Application Development Approaches

There will be significant demand for enterprise mobile apps in 2015 as the nature of productivity changes.  There are a number of ways to approach the technical development of a mobile app.  We have tried all of them to greater or lesser degree.  All approaches should be considered within the context of the current duopoly between iOS and Android.

A brief description of the primary app development methods are offered below supported with some pros and cons. A future Mobile blog post will cover this in more detail.

Native

Developing apps within the native programming languages for iOS (Objective C / Swift) and Android (Java) will typically provide the best user experience, full access to the hardware and good security. The downside of going native is the requirement to create two largely separate code bases in order to create native apps.  The result of a higher quality experience is often at the expense of higher development and ongoing maintenance costs.

Cross platform

A cross compiled development approach offers reach across iOS, Android and Windows if you want for both mobile and tablet.  The technology in this area has been improving with the likes of Xamrin, Cordova, PhoneGap and RhoMobile all upgrading their technologies over the last 12 months.  Indeed the new version of Microsoft.NET is purported to come with integration with Cordova and Xamarin licensing.  This approach offers major efficiencies in development and ongoing support by the function of developing and maintaining a single code base.  The trade off though is often a poorer user experience than a well-developed native app.  Where functions of the phone, offline access or just speed is important then the abstraction from the native toolset.

Hybrid

Hybrid apps sit between the two options above. Typically it involves combining HTML 5 views with a native shell and navigation.  By retaining a web-view core architecture, efficiencies can be derived across the different platforms while investing time creating navigation and features that is native to iOS or Android can deliver on the user experience.  A great post back in May from David Hansson of Basecamp captures this approach better: https://signalvnoise.com/posts/3743-hybrid-sweet-spot-native-navigation-web-content.

The right development approach really does depend on the requirements and context but in general we have favoured going native in the past, however we are increasingly adopting hybrid approaches to get the best of both worlds.

Mobile is a major topic in its own right and we will cover separately its role in areas such as payments, authentication, messaging and wearables in a forthcoming post.

Conclusion

The aim of this post was to highlight our views on how Enterprise IT architectures are changing to meet the challenges and opportunities presented by digital. It’s important to note that cloud, APIs and mobile are not the only areas to consider. Developing user experiences that meet well defined user needs, creating multi-disciplinary teams, and use of analytics and big data to drive data driven decisions are a number of other areas that will play a major role.

Nevertheless we believe 2015 will be a time that CIOs and other leaders within enterprises must grasp digital transformation. To make this happen they should reassess the suitability of their current IT architectures and initiate development of new cloud driven architectures targeting users on mobile devices.

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