I came to IBM Software Group’s latest analyst SOA shinding, held in New York city at the W on Lexington, with an agenda- trying to persuade IBM to decouple some of its SOA messaging. The problem basically is that IBM has it in its DNA to try and have one conversation with the market, rather than many. IBM loves umbrellas.
But SAP seemed to be quietly building a lead in shared services discussions with business executives… shared services is the business instantiation of similar thoughts to SOA in technology terms. SAP has some people that talk very effectively to shared services at the C level- people like Thomas Otter. At SAP SOA can almost be viewed a symptom of shared services, rather than a cause. SAP has always been about business process change, and shared services… When a Nestle buys SAP HR Software its in context of a shared service process change.
I was therefore impressed, or depressed, or whatever it is when you see the first person on stage putting your insight forward first session of the day… Ginni Rometty, senior vice president, Global Business Services – good job and nice analysis. Oh well I will have to think of something else to nail.
Basically IBM has just analysed the results of its CEO research stufy for 2006.
It turns out that Shared Services is squarely on IBM’s radar.
RedMonk identified this tendency early on in our work on compliance. It was clear that organisations needed to set up Compliance Services organisations, in order to be able to move from silos to continuous compliance.
The poster organisation in our COA model was Geisinger Healthcare, which set up a content imaging and archiving organisation to store and manage medical information across the organisation. This was a significant process change, and underpinned a service oriented business approach to compliance.
Perhaps its finally becoming clear where Software as a Service is going meet SOA. Shared services and business process outsourcing are converging. Its not about cheaper services provided in another geography but the best most effective services provided by specialists, firms like Fedex, say, or ADP, or Amazon.
A governance board is required, and centers of excellence within clients are emerging according to Ginni Rometti. I suppose its no surprise given Ginni’s role she’d be looking at shared services, but its a powerful insight nonetheless.
This is all goodness. IIBM has evidently identified this crucial element in the SOA mix. All it needs to do now is realise it has just identifed two distinct ways to talk to two distinct communities. Shared services is something business execs understand, and it ties into IBM’s Collaborative Innovation message. Meanwhile the geeks can talk to SOA and metadata and web services and all that gorpy stuff.
On a completely different note- Steve Mills, SWG general manager, has referred to mashups twice today… how about that.
I just discovered tonight’s dinner has a wine-tasting element. IBM must be reading my blog…
Thomas Otter says:
June 2, 2006 at 8:59 am
Very interesting James,
IBM didnt just buy PWC consulting for the billable hours, it brings a great brains trust and a group of people who can communicate with the business outside of IT. If IBM can align the technical message and the business message, then they will be “cooking with gas.”
Shared services has a lot of similarities to SOA. It is primarily about reuse, standardisation, transparency and clearly defined and described services that are consumed on demand.
At most SAP customers today, moving to, or optimising shared services is the biggest trend. HR BPO is the logic continuation of this.
Technologies such as Employee Self Service (the latest iteration of this being Duet) sell well because they help power shared services, not because they look nice.
I spend quite a bit of time talking about the industrialisation of services. Shared services is a big part of this. Perhaps it is time to do a post on it.
Dan Creswell says:
June 2, 2006 at 12:08 pm
“Meanwhile the geeks can talk to SOA and metadata and web services and all that gorpy stuff”
Maybe – think I’d prefer the Geeks to talk about and understand shared services and then talk about the gorpy stuff in that context – might yield better results for all concerned.
Sandy Kemsley says:
June 2, 2006 at 2:48 pm
In the customer environments that I work within (mostly financial/insurance), IBM has always been a proponent of shared services because of all the big iron installed. One large bank that I work with uses mainframe-based IBM content management as a shared service (as opposed to just a corporate standard) across the enterprise, and it’s served up by the horizontal shared IT group, not by the divisional IT. However, that’s not always a good thing: I’ve seen it used for completely inappropriate things just because the shared IT group said that it had to be used, even when the costs were higher than purchasing a new, more relevant product. In many cases, the shared services IT group had not considered the needs of all areas within the enterprise, just the loudest or biggest ones, so niche departments had the choice of being burdened with something that didn’t work for them, or continuing to do their work manually. Many chose the latter, which was not only bad for them, but reinforced the notion that the shared service was best for all since nothing else could muscle its way into the organization.
The problem with equating shared services within an organization and a true outsourced SaaS is that an enterprise is usually captive to its shared services, whereas they have a choice with an external SaaS.
vinnie mirchandani says:
June 3, 2006 at 6:00 am
Hackett Group wrote about Shared services in 1993. I wrote at Gartner about them in 1995.
Sam P recently said he has embarked on globalization of IBM. Huh? India threw IBM out in 1977 – and allowed it back in 90s. They were one of the first US MNCs
Is IBM recycling old stuff even as it spends millions in a campaign around its innovation?
james governor says:
June 5, 2006 at 10:01 am
dan – great point. well said.
vinnie: we’re all recycling. how much business model innovation is really going on in non-IT firms? I see a lot of firms that have no idea in sectors like media, pharma and so on. its no great insight to realise we’re seeing some return to bureau-based computing, and to sandy’s point, that’s something that does tend to favour IBM.
thomas who posted above works at SAP – they are still talking about shared services, ten years after vinnie’s first research note on the subject…
vinnie mirchandani says:
June 5, 2006 at 1:20 pm
James, 2 comments. a) The linkage to shared svcs sounds like (another attempt) to find justification for SOA. Companies have been doing shared services for over a decade without spending a dime on SOA. SOA needs its own payback justifiers.
b) of course, pendulums swing from centalization/decentralization. But that in itself is is not innovation or should command a premium. SOA is, telemtery is, predictive analytics is. We need as an industry to show payback around them – and there are plenty of examples of that in the market, but usually in small bite, small team settings…
james governor says:
June 6, 2006 at 11:54 am
good points vinnie. but to be fair, IBM really didn’t play the shared services to SOA card that strongly. their research with CEOs came up with the shared services theme. it happened to be expressed ay a SOA event- i may have overstated the linkage. but… i do believe that SOA means process change…
Thomas Otter says:
June 26, 2006 at 3:57 pm
James and all.
Where I think the SOA gets interesting is when you move things around a bit, say from host to host (as in the redmonk blog saga) or from inhouse shared service to a BPO provider, and then to yet another provider if they don’t deliver or you get a better price elsewhere. I think it will give you move flexibly to outsource parts of a bigger process, yet keep the integration going. (say a part of payroll or recruiting, or Acc Payable.)
What I want to see is a clearer delimitation of the technology of SOA and the geography of SaaS. These terms are too intertwined at the moment and they shouldnt be.
Shared services has been going since the 1970’s as a business process (Shell BP etc) long before Gartner did a “James Cook, Doctor Livingstone or Christopher Columbus” on it. The first software back in the early days of mainframes was SaaS….