Andrew WhiteJeff Woods, one of my colleagues, just published a note describing his interview of Andrew McAfee – see Gartner Interviews Andrew McAfee on Why Investment in Enterprise Applications and ERP Matters. The July/August 2008 issue of the Harvard Business Review (HBR) included an article by Andrew McAfee and Erik Brynjolfsson, entitled “Investing in the IT That Makes a Competitive Difference“. The article looks at how competition in the U.S. market has increased dramatically since the mid-1990s, especially in industries that have invested heavily in IT. The authors believe this acceleration in competition is a result of companies’ standardization and digitization of business processes, which makes those processes easier to replicate widely through the use of enterprise IT.
The ‘trick’ is not that standardized processes lead to innovation – that is not the point of the research. The point is that business leaders have figured out how to use IT as a platform in order to simplify and speed up the deployment of innovative/unique business processes across the entire enterprise. So the real message behind the research is, “how to leverage one’s innovation more quickly”.
Of course, the idea that a ‘platform’ can be used to distribute high value, even innovative business processes quickly, is not that shocking. It makes very good sense. But, the more important questio, in this context, becomes: ”What is a platform?” Is it ERP? Is it SOA-based? The answer is “no”, and “yes”, to both. The platform in this case is as much a way the enterprise manages its people, its processes, and its technology. One enterprise’s platform might be ERP based, one might SOA-oriented. What is common is that the IP and assets are governed centrally, with a much grater focus on standardization of the piece parts that make up the various components of the platform. So this means more of a horizontal stack of technologies (think BPM, MDM, Composite Development, Portal, Sensory Network etc.) rather than the veridical stack that is more common (think ERP, CRM, SCM, Procurement, PLM etc). In Gartner speak then, this equates nicely to a Business Process Platform.
That is not to say that a BPP is the answer or a platform for innovation. A BPP strategy results in a platform mentality that seeks to rationalize and standardize technology for all type of processes – commoditized and unique. That is what is different to what IT does (mostly) today.
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Category: Innovation Standardization Tags: Innovation, Standardization
