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1.5 -Rapidly Shifting Business and Technological Requirements

Most corporate and government entities are being pressured to concurrently respond to escalating requirements in four key areas. Shown in Figure 1.1, these four areas encompass industry demands, related internal business requirements, emerging IT technologies, and various IT disciplines that enable organizations to respond more quickly to priority business requirements.

Figure 1.1Figure 1.1 Organizations experience pressure to concurrently respond to rapid shifts in business, industry, technology, and IT architectural climate.

Greatly complicating matters is the fact that each of these four diverse yet interrelated requirements is in a state of flux. Industries are being transformed into other industries, such as the case with insurance companies becoming full-fledged financial institutions. To meet these demands and concurrently address efforts to leverage the Web in these activities, businesses are retooling processes in response to new internal and external requirements.

Industry pressures can also be overwhelming. These pressures include overhauling relationships with suppliers, distributors, and customers to improve efficiency, service, and competitiveness. These changes are rippling through supply and distribution models as well as everything that has to do with customer service.

At the same time, IT has finally begun to settle on a set of languages, standards, architectures, and approaches to systems development and deployment. The problem is that haphazard or poorly planned attempts to deploy these new technologies while trying to respond to shifting business and industry demands have the capacity to throw an organization into chaos.

Industry and business challenges remain key drivers for IT initiatives. Industry drivers include an almost unprecedented attempt to shift from traditional buy-sell models to doing business electronically. The emergence of electronic business (e-business) drove corporations and governments into a mad dash to Web-enable their enterprises. This spawned a series of e-related terms and trends. Many of these common terms, some of which have been short-lived, are described below.

  • E-commerce (electronic commerce) is the activity of businesses selling goods or services over the Web.

  • B2B (business-to-business) focuses on businesses exchanging goods and services with other businesses.

  • B2C (business-to-consumer) is another term for businesses selling goods and services through the Web.

  • C-commerce (collaborative commerce) involves business partners working jointly to leverage the Internet to more effectively deliver goods and services.

  • W-commerce (wireless commerce) utilizes wireless technology to buy and sell goods and services.

  • I-commerce (information commerce) describes a scenario where companies provide information to consumers over the Web.

  • E-government (electronic government) is a general term for governments doing business over the Web.

  • E-marketplace (electronic marketplace) is the concept of a supply or distribution chain (or both) exchanging goods and services through a Web-based exchange.

Other terms are sure to come and go, but the genie was definitely let out of the bottle when the "e" term and its derivatives began to displace common sense and solid business planning. In spite of the failures of the dotcom companies, the Web is here to stay.

In the meantime, traditional demands on businesses have continued to escalate. Deregulation in the energy industry, for example, is forcing energy producers and distributors to rethink business strategies—and the Web will be a key component of any solution they finally deliver.

Delivering products and services from a global perspective is also forcing many companies to rethink regional business plans. Once a major player in a given industry begins operating globally, others will follow. The ripple effect on corporate infrastructures is significant and requires major integration and retooling of internal and external business processes.

Technological advancements contribute to industry-wide changes as well. The Web can be viewed as disruptive technology because it allows certain industries to bypass distribution or supply chain intermediaries. This is particularly true in distribution models where the auto industry, for example, is beginning to market cars over the Internet. The Web has also changed the way suppliers relate to each other—at least for transactions that do not require extensive human-to-human contact. Electronic marketplaces, such as Covisint within the automotive sector, have allowed entire industries to streamline supply chain management processes.

Over the short term, eliminating intermediaries and streamlining supply and distribution chains will negatively impact certain subsections of a given industry. Distributors, for example, may need to adjust their business models. Economic weakness could force many industries to cut costs. These industries will need to enact and sustain certain initiatives to ensure their survival.

Internally, businesses must respond to industry pressures by bringing new products and services to market in less time and at lower costs. Long-distance providers, for example, are bringing new plans to market every month. Similarly, financial service providers are offering new financial packages on a regular basis. Time-to-market is a critical requirement today, and companies must find ways to respond or fall behind.

Mergers and acquisitions continue to be a factor for many companies. Certain regional bell operating companies (RBOCs), for example, have reacquired some of the original baby bell companies spun out from AT&T in the early 1980s. These types of mergers place tremendous integration and retooling pressures on IT. Many companies are also entering or pioneering new markets, such as wireless communications, broadband, smart cards, energy brokering, infomoney, biotechnology, and a host of other areas that are enabled through the evolution of new technologies.

Globalization also places major pressure on IT and a business. Turning a company that is a series of standalone entities into a cohesive, global enterprise is a major challenge for the executive team and requires revamping business processes and systems that once served highly autonomous entities.

Customer relationship management (CRM) focuses on providing more effective and highly automated ways to service customers, which will hopefully differentiate companies from the competition. Organizations must also chart out new business intelligence about the competition in response to increasingly competitive demands from a variety of sources. New software has created new and better ways of achieving these goals.

In the future, disruptive technology will continue to keep many industries and businesses in a state of flux. Consider, for example, the impact that nano technology will have on biotechnology when tiny robots can be sent into humans to fight off plaque in arteries. Or consider how nano technology might impact the energy industry when tiny solar conductors, painted into road surfaces, will provide continuous renewable energy to power cars or generate electric power.

All of these factors are driving organizations to seek new solutions to a wide variety of information challenges. Most of these business-driven factors require retooling business processes—and the computer systems supporting those processes. Yet there is another set of challenges facing IT that stem from emerging IT disciplines and technologies.

While the change in business demands that organizations are facing on a global level are staggering, there is also a revolution going on within the world of IT. Figure 1.1 depicts a few of the technologies and related disciplines that IT will need to leverage in an attempt to deliver more value to the enterprises they service.

IT is pursuing a series of emerging technologies and improved information architectures. These new technologies include better development environments, new languages (including Java and XML), Web-enabled platforms, enterprise application integration technology, and the open systems movement. In addition, IT is beginning to adopt new approaches to development, which include agile methodologies with the intent of shortening project delivery cycles and improving time-to-market.

New application architectures are also emerging. For example, J2EE and .Net are competing for the future of the IT application architecture where reuse is the ideal, and time-consuming, handcrafted applications will eventually become the exception—not the rule. As reusable building blocks (i.e., components) come into common use, developers will build applications that can seek out predefined solutions across the Internet. This is called Web Services, which is the next level of evolution for information architectures.

IT is changing how it builds, deploys, and manages systems, and this is as important as the emerging technologies that IT now has at its disposal. One major requirement is the need to integrate and purify data as customers and suppliers begin to gain direct access to that data. Most legacy data is typically segregated and lacks a certain degree of consistency and integrity as viewed and used across multiple business units.

Coupled with all of these advancements is the need to distribute applications, integrate existing data and architectures, and accomplish this through collaborative development using agile methodologies such as Extreme Programming (XP). If all of this seems farfetched, it is because the IT industry is still mired in the overwhelming challenges stemming from legacy computing architectures, which stymie new technology deployment.

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