Newton's New Laws: Application Integration and Organizational Performance

Sir Isaac Newton may have been the first organizational expert. Although his Three Laws of Motion were created to explain Nature’s dynamics, they are equally relevant to the organizational dynamics in business today.

Forget those “7 Successful Steps to Anything” come-ons. Disregard the “Read My 12 Steps and You’ll Really Be A CEO” snake oil. Say goodbye to the “Mimic Everything Company X Does and Your Company Will Be Excellent, Too” handbooks.

When it comes to really knowing what it takes to achieve organizational excellence, Sir Ike was the first and still the best. Let’s start at the start – with his 1st Law of Motion:

Newton’s 1st Law: “Every object in a state of uniform motion tends to remain in that state of motion unless an external force is applied to it.”

Business Translation: Organizations constantly need a good, swift kick in the behind

Newton was simply saying that things will remain status quo -- unless somebody acts. For businesses, this means that if they cling to the status quo long enough, complacency and inefficiency will creep in. Processes become stale. "shortcuts" become confused with "productivity." Policy trumps results. Work becomes routine. Employees lose interest. And leading-edge technology soon devolves into tomorrow's "legacy system."

Organizations are like the Greek myth of Sisyphus. He’s the guy who angered the gods, so his punishment was to keep rolling a rock up the mountain only to have it roll back down again just before it reached the peak. For Sisyphus, the rock was his fate.

For business organizations, complacency can become their fate. How else to explain the constant downsizing, turnarounds, de-layering and revolving door of executives that seem so prevalent in business today? After all, a business that is operating at peak performance wouldn’t need this kind of upheaval. So these changes become the business equivalent of Newton's “external forces.” Only in this case, the external forces are from investors, shareholders and customers who have grown angry at complacent organizations that are not operating at peak performance levels.

But there are companies who don’t allow themselves to cling to the status quo. These companies won't stand for getting rocked by the competition. Complacency is not their fate. They control their own destiny. They "get it.”

And those who really get it, get IT. These companies don’t view information technology as a necessary evil or mundane back office processing. They implement, innovate and integrate IT to drive productivity and operational efficiency in the workplace with a commercial advantage in the marketplace.

Want examples? Check out JP Morgan and its renowned CEO, Jamie Dimon. (A good synopsis of his view of the role IT plays in his organization is found toward the end of this article: http://money.cnn.com/magazines/fortune/fortune_archive/2006/04/03/8373068/index.htm)

GE Healthcare's Centricity (c) system is another example of a company who gets IT by using application integration to win in the outpatient healthcare marketplace. Frost & Sullivan has concluded that this integrated information solution has given GE "an edge over other market participants, making it a pioneer in clinical IT solutions ... creating significant brand value ... providing [continuous] competitive advantage ... and a sizeable mind share."
http://money.cnn.com/news/newsfeeds/articles/prnewswire/DATU01224042007-1.htm

But for companies who get it and get IT, “it” is not just a matter of chasing the next big thing in lemming-like fashion. It doesn't mean merely buying a major new system every few years. You can’t buy excellence.

The business organizations that truly get it leverage the systems they have, make smart upgrades and add new applications on a systematic and judicious basis.

One of the biggest ways these firms win with IT is through more efficient and effective integration of existing systems and applications. If productivity means doing more with the same or less, then this is the ultimate in productivity. In systems integration terms, this can be done by simply being more resourceful with the system resources already in place. In fact, in many companies, low productivity isn’t the result of a lack of data or applications. It is the inability of end users to easily and efficiently access existing data from existing applications in order to perform their work.

In support of this claim, one company analyzed its backlog of end user-driven IT projects. The surprising finding: 62% of the IT projects were related to better data integration from current systems. This was a huge productivity opportunity. And it didn’t beg for building new applications; it simply required better integration among existing ones. Doing this, of course, requires the right integration platform and tools.

Think about it. Let’s assume a company is on a major productivity initiative. One of the strategies they decide upon is to boost productivity by analyzing opportunities from IT. Would it be a better business decision to replace or rewrite applications in which millions of dollars may have been already invested? Or would the smart play be to take what you have and use cost-effective tools to integrate them more efficiently so that end users become more productive?

The good news is that as budget-friendly integration tools, such as Ratchet-X, come on the scene, this low-hanging fruit will become even easier to pick. And as it does, it won’t take an apple hitting us on the head to discover how information integration can be a powerful internal force for driving productivity and destroying inefficiency – before external forces demand drastic action.

Contextual Advertising and Enterprise Applications

In a recent blog entry entitled; "My favorite Web 2.0 themes: SOA and business applications as advertising platforms", Dana Garner comments; “I’m listening for the rumblings of how innovative advertising will augment the subscription model for SaaS and mashed-up web services in business use.” I believe the days of enterprises sanctioning the use of sponsored software is well on its way. I say this because we’ve seen it first hand at RatchetSoft. Although our Ratchet-X software is not currently sponsored, we have been asked by a number of service providers to release an advertiser supported version of our desktop integration platform. Why is this? The logic becomes apparent when you ask yourself the following question. How much would I as an advertiser pay to have my services advertised at the exact moment a prospect is performing an act where my services are most applicable? It’s all about context and relevancy to the prospect.

For example, let’s say a credit bureau wants to increase the distribution of its credit reports. While conducting an online campaign based on keywords and advertising networks has value, it requires the user to proactively find the advertisers ad by either conducting a search on purchased keywords or visiting a site in the network that is deemed relevant. Alternatively, the credit bureau could advertise through Ratchet-X and present its offer at that point the prospect is adding a vendor to her/his accounting system. Which scenario is more likely to result in a sale?

Since Ratchet-X understands the context of a transaction in terms of: a) which applications are in use, b) what functions are being performed and c) what data is required to perform those functions, Ratchet-X is in a much better position to sell the service. In other words, the ad is being served at the point of need precisely at the time the prospect needs the service being advertised.

So what’s in it for the prospect? First, if the user is getting the Ratchet-X functionality for free in return for the advertisement, that offers significant value. Second, since we contextually understand what the user needs, the advertiser can offer a broader array of relevant free and/or premium services.

Assuming the economics work for both the advertisers and the underlying delivery channel, the value provided to the prospect is worth the “intrusion”, and a guarantee is made that prospect specific information is used to merely target ads and is not shared with the advertiser, the value proposition for sponsored software in the enterprise becomes more attractive.

Make Mine A Mashup Please

Peter Rip of Crosslink Capital recently posted an entry on his EarlyStageVC blog entitled "Web 2.0 - Over and Out". While his comments have kicked up quite a bit of dust in Web 2.0 circles (mostly with aspiring vendors in the space), many of his points are reasonable. More specifically, his points with regard to the next wave of innovation and websites being islands of isolation are spot on. But Peter's post deals mainly with the consumer side of the Web 2.0 story. While the challenges to innovate and monetize efforts serving consumers is significant, I believe the most difficult challenges await those helping Web 2.0 succeed within the enterprise.

While the Web 2.0 moniker is manifesting itself in a numnber of different ways within the enterprise, the chatter I hear most from customers has to do with user empowerment via enterprise mashups. It seems every day a new vendor emerges with a mashup or composite application framework that promises to allow users to reuse their organization's programmed assets and mash them together to create new applications. It's a good story and believe me, noboby would like to this vision realized more than me.

Unfortunately, despite all these vendors' best efforts, the use of enterprise mashup tools is still heavily bifurcated with nary an end user in sight. On one hand, the tool is being used by power users to create glorified reports or basic mashups that contain very little function specific logic - simlar to that of portals. On the other hand, you've got IT support personnel and some programmers who've been lured in by the mirage of point and click graphical programming. While it may impress some, most developers are left shaking their heads asking; "why learn a new tool to do the same things I can do in the programming language I already know?"

The bottom line is users have a difficult time understanding complex data types, conditional logic, order of operations, arrays, enums, etc. Vendors can up with all kinds of disarming terms to mask these programming constructs but in the end, they're just that...programming constructs. And unfortunately, in order for the end user community to build a mashup or composite application of any significance, they will need to master these concepts.

So how do we empower the user via Web 2.0 services? We believe a valuable interim step is to provide tooling that allows users to integrate programmed assets into the applications they already use, not create new ones. By integrating into existing applications using a technology such as Ratchet-X, the task at hand becomes very tangbile. They don't have to think in terms of data grids or sets, rather, they think in terms they already know such as invoices, customers, etc. At this stage of the game, most users are looking to link their systems together to get more comprehensive views of the business challenges they face. They don't need new applications and they sure as heck don't want to build them. Rather, they want to link their existing applications to the other applications, sites, services, databases and forms that make up the full story. In other words, they want to make the application they already use, their system of record if you will, the mashup.