Thursday, February 27, 2014

New Age Architects of "As a Service"

My two prior posts dealt with the reasons that yesterday’s models of outsourcing aren’t particularly well-suited for the rapidly-accelerating trend towards “As a Service” ecosystems.  To recap, I summarized my views around:
  1. Capabilities Aren’t Services
  2. Platforms of Platforms Emerging
Before I continue with the theme of how traditional outsourcing is challenged to be relevant in the markets ahead, I thought it prudent to share a conversation that occurred this week.

I was privileged to be invited to speak to a group of G-200 Shared Services leaders. I remain convinced that the role of Enterprise/Global Shared Services executive is one of the more influential and instrumental to the transformation of businesses.  The quality of executives in this group certainly reinforced my opinion.
The topic of the discussion was “what’s next for shared services?” and, specifically, the effects of technological innovations in driving the next wave of value.

I made the case for Shared Services organizations being pivotal for driving innovation in “As a Service” business operations – from the front-office through to the back-office.  Historically, Shared Services has been thought of as a back-office organizational model.
We spoke at length about “platforms of platforms” and the intractability of traditional ERP.  I offered my opinion that the three essential assets that every company should own and control going forward are:

  • Platform Strategy, including APIs
  • Data Strategy and Stewardship
  • Security Strategy and Controls
I made the case that these are the essential “core components” around which modern “As a Service” operations will be engineered.

One of the executives asked a particularly poignant question.  She asked me, “What are the critical leadership roles to achieve transformation of business operations towards the “As a Service” vision?”  Thankfully, I’ve been asked this before.

From what I am seeing in successful and progressive programs of business transformation, there are three roles that must engage and align on the shift of the business model.  This is true whether the company is addressing internal operations or new go-to-market opportunities.
First, the functional leadership must be an advocate for the new vision.  Companies that organize with Shared Services are in a better position for functional vision.  They already possess line-of-sight to process adequacy, standards, and interfaces.  For new market-facing offerings, the functional leadership is a business executive.

Secondly, the CIO must be a leader in opening consideration for new tools and utilities.  S/He must help with the ROI business case for retiring legacy assets in favor of new accelerators.
Finally (and this elicited the most conversation), Supply Chain leadership must be in the game.  In my experience, the executives responsible for managing the spend must appreciate that what they are buying, from whom, and under what terms … are all changing in the “As a Service” world.

We discussed this last point at length.  In fact, I was asked how Supply Chain can/should be educated around the implications of the new, agile, modular, operating structures that will be brought to these companies.  I promised to give that more thought, and to structure some ideas on ways to best enlighten the executives leading this critical function around the massive changes that “As a Service” brings to their world.
From what I am seeing, the companies making the most traction in adopting the essential principles of “As a Service” business models – internally and for their markets – are those with the greatest alignment among these three leadership roles.


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