The Next IT Strategy: The Information Utility

Computerworld - In this month's issue of the Harvard Business Review, John Hagel III and John Seely Brown posit that your next IT strategy will be about buying IT as services over the Internet rather than owning and maintaining your own hardware and software.

"It's not just a vision," Hagel says. "Large corporations are implementing this."

Hagel and Brown are chief strategy officer and chief innovation officer, respectively, at 12 Entrepreneuring Inc., an operating company that nurtures IT innovation.

Hagel, formerly leader of the e-commerce practice at New York-based McKinsey & Co., recently spoke with Computerworld's Kathleen Melymuka from his San Francisco office.

This is the fourth in a series of monthly discussions with authors of articles in the HARVARD BUSINESS REVIEW on topics of interest to IT managers.

Q: You compare a traditional corporate application with a Swiss Army Knife. What do you mean? A: Historically, connections across applications were so expensive and so difficult to create that people ended up with applications that were massive in scope because they didn't want to have to connect them.

[Application developers] tried to imagine every task that might need to be accomplished and design them all in. So you end up with something like a Swiss Army Knife that can do most things but can do nothing extremely well.

Q: Why is a Web-enabled process better?

A: It allows much more easy and cost-effective connections across applications or technology resources so you can get access to the best-in-class applications, wherever they reside, in a much more flexible way.

Q: You point out that the Web services infrastructure is still maturing, but are there ways companies can benefit today?

A: Yes. One of the most attractive features of Web services architecture is that it provides a set of tools to take existing legacy applications and node-enable them, creating a front end on the application that will allow other applications to access the resources for specific needs.

General Motors has taken this approach to solve the very difficult challenge of connecting its own applications to those of more than 8,000 North American auto dealers - a task that would have been virtually impossible using traditional architecture.

[GM and its partners] keep their existing systems in place, establish much more flexible connections across applications and now have a much more efficient way of serving customers.

Q: You also advise companies to start "at the edge."

A: That's the notion of focusing attention on activity where there is frequently interaction with multiple business partners.