Reinventing corporate IT requires recognition of deep differences between what we have today and what we need in the future. These differences go to the foundation of the modern corporate IT depart- ment—the infrastructure—which includes the software, hardware, communications, facilities, data centers, operations, and other technical resources a corporation operates. This infrastructure sits on top of a publicly available substructure of assets and resources— telecommunications and the Internet, for example. Infrastructure and substructure support the information, processes, applications, rules, and channels that are the face of corporate IT.
Infrastructure largely determines the IT organization’s structure, its budgeting, how the corporation goes to market, its legacy, and its capacity to change. It embodies the long tail realities of major busi- ness and technology decisions, resulting in an IT department strug- gling to manage multiple costly and incompatible infrastructures. The days of seeking a single, one-size-fits-all, one-price-feeds-all IT department are numbered. Infrastructures are under assault technically, functionally, and financially. New digital technologies like mobile, big data, analytics, the cloud, social media, and sen- sors represent fundamentally different types of solutions than do proprietary transaction technologies such as enterprise resource planning. Consider:
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■Standards-based (rather than proprietary) technologies in mobil- ity, Internet protocols, and open APIs demand shorter applica- tion and infrastructure development cycle times. Standards reduce not only the amount of technology but also the risk asso- ciated with bringing new and legacy technologies together. ■
■Functionally, digital technologies are front office, customer-
facing, and demand-generating. They’re the business’s brand. Digital demands move at the pace of the market, competition, and customer expectations rather than the upgrade cycles of IT vendors.
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■Financially, infrastructure is simply too expensive and consumes too much in its present form. CIOs need to provide infrastructure at a lower cost and with more agile capability. Even current cloud and virtualization technologies, which often lower unit costs, don’t change the drivers and structures of those costs. It is only a matter of time before growing digital transaction volumes over- whelm these technologies in their current forms.
Increasing needs for speed, creativity, low cost, and flexibility demand that we move beyond infrastructure to platforms. A plat- form is the collection and integration of common resources that support multiple business operations. Financial services compa- nies have platforms that allow them to release new products with- out having to replace their infrastructures. Facebook, Google, and other digital companies invest in similar capabilities, which give them a seemingly endless stream of innovations and experiments from a single platform.
“Plures ex uno”—or many out of one—is the goal of a digital plat- form. Note that this is the opposite of the motto of the United States—“e pluribus unum” or one out of many. The comparison is apt, as corporate infrastructure is federated in nature with limited viability in the digital future.
A platform is more than a service-oriented architecture on ste- roids. Platforms look at technology with a business view organiz- ing around specific business actions like one-click sales, search, description presentation, and pricing. These common actions treat information rather than business logic or code as the source of spe- cialization. This enables platform companies to add new features and functions once that are available to all or just a part of their customers, giving them the flexibility and adaptability required in modern business.
Platforms reflect the heterogeneity of digital technology, allowing each part to change without disturbing the peace across all compo- nents. Platforms are critical for a world of consumer-driven tech- nology, multivendor competition, and standards wars fought in the marketplace rather than the lab.
Platforms fit the economics of digital business. They provide a means to gain scale efficiencies from across the enterprise rather than trying to drive them across individual infrastructures. This is essential in a world where IT transaction volumes grow faster than business purchases. Consider online banking where many transac- tions are free of charge but have a real cost to the bank. Platforms provide a way to drive down transaction costs and preserve com- pany margins.
Platforms require more than stitching together existing infrastruc- tures. More interfaces, more integration, and more condition-spe- cific logic may be interim steps, but they only add cost, complexity, and core rigidity in the corporation.
| 30 Achieving the functional and financial benefits of a platform
involves going back to the basics of business—not transactions. Yes, the devil is in the details. And yes, we have tried a service-oriented architecture and virtualization before with mixed results. Rein- venting corporate IT requires more than changing the role of CIOs and IT in a digital age. Reinvention at scale must extend down into the fundamental drivers of IT cost, quality of service, and future flexibility. That starts with reinventing the foundation of IT and abandoning the infrastructure model.