Gartner Says Need for Business Process Fusion Will Drive a Return to Strategic Investment in IT in 2004
Companies must use the return of confidence in IT spending and advances in software to transform their businesses
Gartner Symposium ITxpo, Cannes, France, 4 Nov 2003 — 2004 must see a return to strategy for IT investments Gartner today advised the audience of 3000 CIOs and senior executives at its annual Symposium ITxpo in Cannes, France. Having used IT primarily to make operational cost savings over the last two years, Gartner said that businesses must now embrace emerging opportunities, and make strategic decisions about technology that will transform their business processes and give them competitive advantage.
Gartner warned a focus on short-term local automation initiatives is leaving IT with diminishing returns to the business. The challenge for IT is to provide the means to extend business capabilities. Gartner said a return in focus on business processes, enabled by the emergence of new software platforms and architectures, can achieve this. Gartner termed this Business Process Fusion. It said the transformation of business processes is a major step towards building the Real-Time Enterprise
CIO confidence in budgets return
Gartner also revealed early findings from Gartner EXP's worldwide CIO survey, showing a return of confidence in IT budgets. CIOs are expecting modest growth of 3.4 percent in 2004. The survey showed that only 12 percent of CIOs believe their most important role in 2004 will be cost cutting and restructuring, but 43 percent believe the biggest change in the role of their department will be to enable better business processes. Gartner said the growing focus on business processes and the maturing of key technologies will make Business Process Fusion a key driver for IT investments in a majority of the Global 2000 by 2007.
"The future will not be about automating existing processes using IT, or trying to achieve more with less, it's about transforming the processes of your business," said Simon Hayward, Research Fellow at Gartner. "Investments to further automate operational processes are beneficial, but produce diminishing returns. There is little point in doing more of the same. By using technology to link previously autonomous management and operational processes, companies can speed up their decision-making, respond faster to changes and make more effective use of their assets. IT now offers the means to extend your business capabilities, but this is not being exploited."
Business Process Fusion - Why Now?
Business Process Fusion builds on the maturing capabilities of systems integration and systems access technology to support the creation of new processes that increase the speed and flow of corporate information. It enables planning, optimisation, simulation, and other performance management activities to take place on a broader scale than previously.
Gartner said it is achievable now because companies have already invested in operational systems that are pervasively connected and able to capture core transactional data. Secondly, the capability of enterprise software has improved dramatically in the last two years. Software platforms and architectures that span the traditional application silos and processing styles have emerged.
"The single most important way that technology can transform a business is by linking business operations more directly into management and leadership activities in order to speed up decision-making," said Hayward. He added, "Business Process Fusion will profoundly change the way application software supports business activities. It is the next logical step in the maturing of systems integration and portal technology. It exploits Web Services, service-oriented architectures and process management. It enables new compound processes that provide coherent control of activities that have previously been loosely linked."
Improvements in software bring new possibilities
The technology drivers and enablers for Business Process Fusion now ready to use are:
Explicit process representation in integration brokers and portal frameworks
Service-oriented architecture and composite application technology that are delivered by integrated service environments and integration brokers for "wrapping" legacy systems
Metadata management and application-independent XML data definitions that are incorporated in integrated service environments and data synchronization tools
The development of common definitions for the main data items that are used in various industry sectors
Advanced portal-based integration that supports roles and personalization
Unified information stores and access methods
Achieving Business Process Fusion Requires New Skills
Implementing Business Process Fusion will require specialists within the IT organisation to work more closely with their business managers. Gartner said this is a "power opportunity" for the IS organisation, however, most are not well equipped to manage process change today.
It said companies must invest in their internal IS team to recruit and train managers who are able to work with management to fuse the various disciplines within the business into a flexible management structure.
The CIO and information technology executives have to make or participate in decisions about their firm's core competencies and about commitments that are already in place. These commitments vary from IT spending decisions, to Human Resources questions, to how the enterprise will respond to faults, rifts, and movements in the larger global economy.
"We need CIOs to talk the language of business, and business managers to talk the language of IT. And they both need to listen!" added Hayward.
Achieving Business Process Fusion will not be easy. Businesses must overcome the following obstacles:
Departments work independently in most companies
Architectures are not flexible and planners are not mandated to build in flexibility
Modifying applications can be complex and expensive
Technologies for use of web services and application composition are immature
Seldom enough buy in from c-level executives to make Business Process Fusion a strategic imperative
To overcome these obstacles, Gartner recommended that businesses must:
Organise for top-down driven, process change to extract the business value of IT
Invest to acquire process change competencies in IS team
Identify key end-to-end process change business opportunities
Set enterprise architecture policy to add only Service-Oriented Architecture-based application software packages and components from 2004 onward
Enforce use of self-describing data standards and methods in all new systems and major enhancements
Require extensible metadata models for new applications
Treat hardware, network and systems software as a black box - focus management time and attention on the value creating business process change opportunity of IT
Gartner believes the rewards for businesses that successfully fuse their business processes are real and substantial. Costs will decline and profitability will increase because of greater efficiencies, visibility and control. What makes Business Process Fusion necessary is the risk, and in some cases, the pressing reality of a competitor successfully transforming its core processes first.
"Fusion will combine activities that formerly required independent systems. It will provide visibility and control of these combined functions at the operational level and for management purposes. And it will allow for modification of business processes without disruption of the supporting IT systems," concluded Hayward.
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