The Next IT Strategy: The Information Utility

Kathleen Melymuka   Today’s Top Stories    or  Other Software Development Stories  

Sold on SOA Sign up to receive Security Resource Alerts

October 08, 2001 (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.

At one end, there's procurement and, alternatively, the sales and customer support function. Those are the areas [of] most immediate value because they involve the need to interact with independent entities with very different technical platforms.

Q: Most of the cases you discuss in the article are about reducing costs. Do you see other uses?

A: Definitely. Given the current economic environment, the most powerful motivation will be cost reduction, but in the longer term, Web services architecture creates enormous potential for business growth.

For example, in mergers and acquisitions, the difficulty in integrating IT systems has been one of most significant challenges to achieving intended value. Web services architecture can play a role in making that an easier, quicker and lower-cost process.

It also provides the opportunity to take resources within the company and make them available as revenue-generating services to other companies. Citibank took a major payment-processing engine they had developed for their own business and offered it as a Web service to a series of electronic markets.

Q: How will this Web evolution affect the staffing and management of IT departments?

A: It will have a dramatic effect. A whole set of skills around network technology and architectural approaches needs to be developed or recruited into IT departments.

And those skills need to be more effectively integrated with traditional enterprise skills [because] you're connecting a new architecture with previous generations of technology. It will be much easier over time to outsource key aspects of [internal] IT operations, so you also will need to deepen those management skills.

On the flip side, there are opportunities to offer services developed internally to generate revenues, so you'll need those skills.

Q: You say Web services will ultimately turn companies inside out. What do you mean by that?

A: Today, boundaries are very clearly defined, and the company usually ends at its firewall.

Web services architecture will create an environment where companies will be able to access resources wherever they reside - in whatever enterprise. Resources that previously existed outside the firewall and were difficult to access will become easy, and those that were tightly locked in will be more accessible to other enterprises as well.

The question will be, What is an enterprise in this new world?

Print this Story

Send Us Feedback

E-mail this Story

Digg this Story

Slashdot this Story

"For good or ill, video for mobile handset users is getting closer and closer for more of us...." Read more... "We interrupt the regularly-scheduled Microhoo update to bring you the..." Read more... Read more Development posts or See all Blogs

Powerset unveils test version of Google-killer IPhone out of stock 'companywide,' say Apple sales reps Microsoft to limit capabilities of cheap laptops More top stories...

FBI worried as DOD sold counterfeit networking gear Update: Microsoft to appeal $1.3B EU fine XP SP3 cripples some PCs with endless reboots

5 easy ways to commit career suicide Mistakes such as putting down co-workers or burning bridges when you resign are surefire ways to darken your career prospects. Here's how to avoid them Opinion: Get ready for these 6 game-changing technologies Hype and promises abound in the IT world, but these six breakthroughs really will change your life, says author and former IT manager John Brandon. What brain drain? Baby boomers are retiring and taking their knowledge with them. Why do so few in IT seem to care? Tales from the crypt: Our first computers Computerworld editors share stories of their first PCs, including some classics and some real clunkers -- then we ask readers to share their early-PC tales. Windows Vista A to Z Reviews, analyses, how-tos, visual tours, hot issues and predictions about Microsoft's new OS. More Continuing Coverage After 9/11: Homeland SecurityAsk a Premier 100 IT LeaderBlackBerry Legal BattleData Security BreachesElectronic VotingFirefoxH-1B VisasHP's Boardroom ScandalHandheld DevicesHurricane Katrina AftermathMicrosoft Legal IssuesMicrosoft's VistaOpen SourceRFID TechnologySCO's Linux FightSarbanes-Oxley ActSpamVoice Over IPWi-FiWindows Meta File VulnerabilityWindows XP Service Pack 2 IT Careers 2010 Four years from now, the IT field will be a vastly different place. Will you be ready? More Special Reports Premier 100 IT Leaders 2007 Best in Class2006 Computerworld Horizon Awards2006 Premier 100 IT Leaders2006 Salary Survey2007 Best Places to Work in IT2007 IT Forecast2007 Premier 100 IT Leaders40 Years of ComputerworldASPs, Take TwoBest Places to Work in IT 2003Best Places to Work in IT 2004Best Places to Work in IT 2005Best Places to Work in IT 2006Business Intelligence Home RunsBusiness Intelligence: Smarter BIBusiness Intelligence: The Future of BICRM Goes VerticalCRM: Sober CRMCareer Planning Guide 2005Careers: IT Profession 2010Computerworld Horizon Awards 2005Data Management: Mining for GemsData Management: Taming Data ChaosDevelopment: Hard-Workin' Web SitesDevelopment: New Tools New ChoicesDevelopment: The New World of Application DevelopmentDevelopment: The Web Services TsunamiDevelopment: Web Services HurdlesDisaster Recovery: Preparing for the WorstE-commerce Grows UpE-mail/Groupware: Big DecisionsFaces of Mobile ITForecast 2006Global MobileHardware: Multiple Cores, Multiple ChallengesHardware: On-Demand Un-HypedHardware: The Shape of Things to ComeHorizon Awards: 10 Cool Cutting Edge TechnologiesIT Management: Guide to Managing VendorsIT Management: Navigating Global ITIT Management: Recovery AheadIT Management: The Future of ITIT Management: The Resourceful Project ManagerInnovative Technology Awards 2004Management: Reinventing ITMicrosoft in TransitionMobile/Wireless Leaders and LaggardsMobile/Wireless: The Untethered WorkerMobile/Wireless: Tiny Gadgets, Huge CostsNetwork Management: Taking ControlNetworking: Turbulence Ahead!Networking: VoIP Goes MainstreamOperating Systems: In the Slow LaneOperating Systems: Linux Goes GlobalOperating Systems: Should You Nix Unix?Outsourcing: Offshore Buyer's GuideOutsourcing: Outsourcing DangersPremier 100 IT Leaders 2004 Best in ClassPremier 100 IT Leaders 2005 Best in ClassROI: Do the Math!Salary Survey 2003Salary Survey 2004Salary Survey 2005Security Action PlanSecurity: Compliance HeadachesSecurity: Proactive SecuritySecurity: Risk and RewardSecurity: Tips From Security ProsSouped-up SecurityStorage: Battling ComplexityStorage: Cheap & Secure Data StoresStorage: Stretching Your Storage DollarsStorage: The Lean Storage MachineStorage: The New Rules of StorageStorage: The Ultimate Backup GuideSupply Chain: Missing LinksSupply Chain: RFID Reality CheckThe Business of SecurityWeb 2.0 SecurityWireless: Wireless At Work All Zones Application Performance Zone Enterprise-Class Security Zone Enterprise Solutions Zone The File Data Management Zone Grid Computing on Windows Zone Security Management Zone ITIL Best Practices Zone The SAS Zone Storage Virtualization Zone The Data Center Management Zone See your link here

Computerworld Report : Smart Storage Download this Computerworld report, free for a limited time, compliments of HP. (Source: Computerworld) Faced with growing demands, immature tools and a confusing array of technologies, IT decision-makers have to make some strategic choices. Learn how to avoid the pitfalls in this Computerworld report, a $49.95 value, available free for a limited time, compliments of HP. Download this executive briefing  Virtualization Everywhere Download this white paper, free, compliments of Citrix. (Source: Citrix) Adoption of virtualization is concentrated among large enterprises, while adoption by mid-sized companies has been much slower. For these companies, the cost and complexity of server virtualization solutions has been a barrier. In this paper, we'll discuss how Citrix XenServer" provides simple, economical server virtualization for any size company. Download now! Download this white paper  Long Tail Supplier Collaboration - What's In It For You? Long Tail Supplier Collaboration - What's In It For You? Download this webcast, free, compliments of Sterling Commerce Go to the webcast  White Papers Read up on the latest ideas and technologies from companies that sell hardware, software and services. New Fujitsu High-End Itanium Windows- and Linux-Based PRIMEQUEST Servers Offer the Utmost in High Availability New Fujitsu High-End Itanium-Based PRIMEQUEST Servers Offer Industry-Leading System Management for Linux and Windows Symantec State of the Data Center Report 2007 View more whitepapers

• Powerset unveils test version of Google-killer
• IPhone out of stock 'companywide,' say Apple sales reps
• Microsoft to limit capabilities of cheap laptops
• More top stories 

XenServer FREE trial Citrix XenServer is the simplest and most effective way to virtualize and provision servers. XenServer combines comprehensive server virtualization capabilities with unparalleled scalability, performance, economics, and ease-of-use. Based on the open source Xen hypervisor, XenServer delivers fast performance, easy management, and advanced features such as live migration. Request free trial now



Detect, identify, and locate RF interference in 802.11 WLANs. AnalyzeAir software provides IT network professionals with the vision they need into the hidden world of RF, providing them with the ability to see the spectrum in a visible and intelligible format. AnalyzeAir software lets you see, monitor, analyze, and manage all the RF sources and wireless devices that influence your Wi-Fi network's performance and security, even if those devices are unauthorized or transient. AnalyzeAir Trial Software v3.1 highlights the features found in AnalyzeAir Software using a set of saved spectrum files. Replay the data and experience the visibility that AnalyzeAir Wi-Fi Spectrum Analyzer provides. Note: The trial software is limited to a player version only. It does not communicate with an AnalyzeAir PC card so it does not collect actual spectrum data. Register for this trial now.