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Q&A with Marshall Van Alstyne, Professor, Boston University School of Management and Research Scientist MIT Center for Digital Business

By The Open Group

The word “platform” has become a nearly ubiquitous term in the tech and business worlds these days. From “Platform as a Service” (PaaS) to IDC’s Third Platform to The Open Group Open Platform 3.0™ Forum, the concept of platforms and building technology frames and applications on top of them has become the next “big thing.”

Although the technology industry tends to conceive of “platforms” as the vehicle that is driving trends such as mobile, social networking, the Cloud and Big Data, Marshall Van Alstyne, Professor at Boston University’s School of Management and a Research Scientist at the MIT Center for Digital Business, believes that the radical shifts that platforms bring are not just technological.

We spoke with Van Alstyne prior to The Open Group Boston 2014, where he presented a keynote, about platforms, how they have shifted traditional business models and how they are impacting industries everywhere.

The title of your session at the Boston conference was “Platform Shift – How New Open Business Models are Changing the Shape of Industry.” How would you define both “platform” and “open business model”?

I think of “platform” as a combination of two things. One, a set of standards or components that folks can take up and use for production of goods and services. The second thing is the rules of play, or the governance model – who has the ability to participate, how do you resolve conflict, and how do you divide up the royalty streams, or who gets what? You can think of it as the two components of the platform—the open standard together with the governance model. The technologists usually get the technology portion of it, and the economists usually get the governance and legal portions of it, but you really need both of them to understand what a ‘platform’ is.

What is the platform allowing then and how is that different from a regular business model?

The platform allows third parties to conduct business using system resources so they can actually meet and exchange goods across the platform. Wonderful examples of that include AirBnB where you can rent rooms or you can post rooms, or eBay, where you can sell goods or exchange goods, or iTunes where you can go find music, videos, apps and games provided by others, or Amazon where third parties are even allowed to set up shop on top of Amazon. They have moved to a business model where they can take control of the books in addition to allowing third parties to sell their own books and music and products and services through the Amazon platform. So by opening it up to allow third parties to participate, you facilitate exchange and grow a market by helping that exchange.

How does this relate to the concept of the technology industry is defining the “third platform”?

I think of it slightly differently. The tech industry uses mobile and social and cloud and data to characterize it. In some sense this view offers those as the attributes that characterize platforms or the knowledge base that enable platforms. But we would add to that the economic forces that actually shape platforms. What we want to do is give you some of the strategic tools, the incentives, the rules that will actually help you control their trajectory by helping you improve who participates and then measure and improve the value they contribute to the platform. So a full ecosystem view is not just the technology and the data, it also measures the value and how you divide that value. The rules of play really become important.

I think the “third platform” offers marvelous concepts and attributes but you also need to add the economics to it: Why do you participate, who gets what portions of the value, and who ultimately owns control.

Who does control the platform then?

A platform has multiple parts. Determining who controls what part is the art and design of the governance model. You have to set up control in the right way to motivate people to participate. But before we get to that, let’s go back and complete the idea of what’s an ‘open platform.’

To define an open platform, consider both the right of access and the right to manipulate platform resources, then consider granting those rights to four different parties. One is the user—can they access one another, can they access data, can they access system resources? Another group is developers—can they manipulate system resources, can they add new features to it, can they sell through the platform? The third group is the platform providers. You often think of them as those folks that facilitate access across the platform. To give you an example, iTunes is a single monolithic store, so the provider is simply Apple, but Android, in contrast, allows multiple providers, so there’s a Samsung Android store, an LTC Android store, a Google Android store, there’s even an Amazon version that uses a different version of Android. So that platform has multiple providers each with rights to access users. The fourth group is the party that controls the underlying property rights, who owns the IP. The ability modify the underlying standard and also the rights of access for other parties is the bottom-most layer.

So to answer the question of what is ‘open,’ you have to consider the rights of access of all four groups—the users, developers, the providers and IP rights holders, or sponsors, underneath.

Popping back up a level, we’re trying to motivate different parties to participate in the ecosystem. So what do you give the users? Usually it’s some kind of value. What do you give developers? Usually it’s some set of SDKs and APIs, but also some level of royalties. It’s fascinating. If you look back historically, Amazon initially tried a publishing royalty where they took 70% and gave a minority 30% back to developers. They found that didn’t fly very well and they had to fall back to the app store or software-style royalty, where they’re taking a lower percentage. I think Apple, for example, takes 30 percent, and Amazon is now close to that. You see ranges of royalties going anywhere from a few percent—an example is credit cards—all the way up to iStock photo where they take roughly 70 percent. That’s an extremely high rate, and one that I don’t recommend. We were just contracting for designs at 99Designs and they take a 20 percent cut. That’s probably more realistic, but lower might perhaps even be better—you can create stronger network effect if that’s the case.

Again, the real question of control is how you motivate third parties to participate and add value? If you are allowing them to use resources to create value and keep a lot of that value, then they’re more motivated to participate, to invest, to bring their resources to your platform. If you take most of the value they create, they won’t participate. They won’t add value. One of the biggest challenges for open platforms—what you might call the ‘Field of Dreams’ approach—is that most folks open their platform and assume ‘if you build it, they will come,’ but you really need to reward them to do so. Why would they want to come build with you? There are numerous instances of platforms that opened but no developer chooses to add value—the ecosystem is too small. You have to solve the chicken and egg problem where if you don’t have users, developers don’t want to build for you, but if you don’t have developer apps, then why do users participate? So you’ve got a huge feedback problem. And those are where the economics become critical, you must solve the chicken and egg problem to build and roll out platforms.

It’s not just a technology question; it’s also an economics and rewards question.

Then who is controlling the platform?

The answer depends on the type of platform. Giving different groups a different set of rights creates different types of platform. Consider the four different parties: users, developers, providers, and sponsors. At one extreme, the Apple Mac platform of the 1980s reserved most rights for development, for producing hardware (the provider layer), and for modifying the IP (the sponsor layer) all to Apple. Apple controlled the platform and it remained closed. In contrast, Microsoft relaxed platform control in specific ways. It licensed to multiple providers, enabling Dell, HP, Compaq and others to sell the platform. It gave developers rights of access to SDKs and APIs, enabling them to extend the platform. These control choices gave Microsoft more than six times the number of developers and more than twenty times the market share of Apple at the high point of Microsoft’s dominance of desktop operating systems. Microsoft gave up some control in order to create a more inclusive platform and a much bigger market.

Control is not a single concept. There are many different control rights you can grant to different parties. For example, you often want to give users an ability to control their own data. You often want to give developers intellectual property rights for the apps that they create and often over the data that their users create. You may want to give them some protections against platform misappropriation. Developers resent it if you take their ideas. So if the platform sees a really clever app that’s been built on top of its platform, what’s the guarantee that the platform simply doesn’t take it or build a competing app? You need to protect your developers in that case. Same thing’s true of the platform provider—what guarantees do they provide users for the quality of content provided on their ecosystem? For example, the Android ecosystem is much more open than the iPhone ecosystem, which means you have more folks offering stores. Simultaneously, that means that there are more viruses and more malware in Android, so what rights and guarantees do you require of the platform providers to protect the users in order that they want to participate? And then at the bottom, what rights do other participants have to control the direction of the platform growth? In the Visa model, for example, there are multiple member banks that help to influence the general direction of that credit card standard. Usually the most successful platforms have a single IP rights holder, but there are several examples of that have multiple IP rights holders.

So, in the end control defines the platform as much as the platform defines control.

What is the “secret” of the Internet-driven marketplace? Is that indeed the platform?

The secret is that, in effect, the goal of the platform is to increase transaction volume and value. If you can do that—and we can give you techniques for doing it—then you can create massive scale. Increasing the transaction value and transactions volume across your platform means that the owner of the platform doesn’t have to be the sole source of content and new ideas provided on the platform. If the platform owner is the only source of value then the owner is also the bottleneck. The goal is to consummate matches between producers and consumers of value. You want to help users find the content, find the resources, find the other people that they want to meet across your platform. In Apple’s case, you’re helping them find the music, the video, the games, and the apps that they want. In AirBnB’s case, you’re helping them find the rooms that they want, or Uber, you’re helping them find a driver. On Amazon, the book recommendations help you find the content that you want. In all the truly successful platforms, the owner of the platform is not providing all of that value. They’re enabling third parties to add that value, and that’s one reasy why The Open Group’s ideas are so important—you need open systems for this to happen.

What’s wrong with current linear business models? Why is a network-driven approach superior?

The fundamental reason why the linear business model no longer works is that it does not manage network effects. Network effects allow you to build platforms where users attract other users and you get feedback that grows your system. As more users join your platform, more developers join your platform, which attracts more users, which attracts more developers. You can see it on any of the major platforms. This is also true of Google. As advertisers use Google Search, the algorithms get better, people find the content that they want, so more advertisers use it. As more drivers join Uber, more people are happier passengers, which attracts more drivers. The more merchants accept Visa, the more consumers are willing to carry it, which attracts more merchants, which attracts more consumers. You get positive feedback.

The consequence of that is that you tend to get market concentration—you get winner take all markets. That’s where platforms dominate. So you have a few large firms within a given category, whether this is rides or books or hotels or auctions. Further, once you get network effects changing your business model, the linear insights into pricing, into inventory management, into innovation, into strategy breakdown.

When you have these multi-sided markets, pricing breaks down because you often price differently to one side than another because one side attracts the other. Inventory management practices breakdown because you’re selling inventory that you don’t even own. Your R&D strategies breakdown because now you’re motivating innovation and research outside the boundaries of the firm, as opposed to inside the internal R&D group. And your strategies breakdown because you’re not just looking for cost leadership or product differentiation, now you’re looking to shape the network effects as you create barriers to entry.

One of the things that I really want to argue strenuously is that in markets where platforms will emerge, platforms beat product every time. So the platform business model will inevitably beat the linear, product-based business model. Because you’re harnessing new forces in order to develop a different kind of business model.

Think of it the following way–imagine that value is growing as users consume your product. Think of any of the major platforms, as more folks use Google, search gets better, the more recommendations improve on Amazon, and the easier it is to find a ride on Uber, so more folks want to be on there. It is easier to scale network effects outside your business than inside your business. There’s simply more people outside than inside. The moment that happens, the locus control, the locus of innovation, moves from inside the firm to outside the firm. So the rules change. Pricing changes, your innovation strategies change, your inventory policies change, your R&D changes. You’re now managing resources outside the firm, rather than inside, in order to capture scale. This is different than the traditional industrial supply economies of scale.

Old systems are giving away to new systems. It’s not that the whole system breaks down, it’s simply that you’re looking to manage network effects and manage new business models. Another way to see this is that previously you were managing capital. In the industrial era, you were managing steel, you were managing large amounts of finance in banking, you were managing auto parts—huge supply economies of scale. In telecommunications, you were managing infrastructure. Now, you’re managing communities and these are managed outside the firm. The value that’s been created at Facebook or WhatsApp or Instagram or any of the new acquisitions, it’s not the capital that’s critical, it’s the communities that are critical, and these are built outside the firm.

There is a lot of talk in the industry about the Nexus of Forces as Gartner calls it, or Third Platform (IDC). The Open Group calls it Open Platform 3.0. Your concept goes well beyond technology—how does Open Platform 3.0 enable new business models?

Those are the enablers—they’re shall we say necessary, but they’re not sufficient. You really must harness the economic forces in addition to those enablers—mobile, social, Cloud, data. You must manage communities outside the firm, that’s the mobile and the social element of it. But this also involves designing governance and setting incentives. How are you capturing users outside the organization, how are they contributing, how are they being motivated to participate, why are they spreading your products to their peers? The Cloud allows it to scale—so Instagram and What’s App and others scale. Data allows you to “consummate the match.” You use that data to help people find what they need, to add value, so all of those things are the enablers. Then you have to harness the economics of the enablers to encourage people to do the right thing. You can see the correct intuition if you simply ask what happens if all you offer is a Cloud service and nothing more. Why will anyone use it? What’s the value to that system? If you open APIs to it, again, if you don’t have a user base, why are developers going to contribute? Developers want to reach users. Users want valuable functionality.

You must manage the motives and the value-add on the platform. New business models come from orchestrating not just the technology but also the third party sources of value. One of the biggest challenges is to grow these businesses from scratch—you’ve got the cold start chicken and egg problem. You don’t have network effects if you don’t have a user base, if you don’t have users, you don’t have network effects.

Do companies need to transform themselves into a “business platform” to succeed in this new marketplace? Are there industries immune to this shift?

There is a continuum of companies that are going to be affected. It starts at one end with companies that are highly information intense—anything that’s an information intensive business will be dramatically affected, anything that’s community or fashion-based business will be dramatically affected. Those include companies involved in media and news, songs, music, video; all of those are going to be the canaries in the coalmine that see this first. Moving farther along will be those industries that require some sort of certification—those include law and medicine and education—those, too, will also be platformized, so the services industries will become platforms. Farther down that are the ones that are heavily, heavily capital intensive where control of physical capital is paramount, those include trains and oil rigs and telecommunications infrastructure—eventually those will be affected by platform business models to the extent that data helps them gain efficiencies or add value, but they will in some sense be the last to be affected by platform business models. Look for the businesses where the cost side is shrinking in proportion to the delivery of value and where the network effects are rising as a proportional increase in value. Those forces will help you predict which industries will be transformed.

How can Enterprise Architecture be a part of this and how do open standards play a role?

The second part of that question is actually much easier. How do open standards play a role? The open standards make it much easier for third parties to attach and incorporate technology and features such that they can in turn add value. Open standards are essential to that happening. You do need to ask the question as to who controls those standards—is it completely open or is it a proprietary standard, a published standard but it’s not manipulable by a third party.

There will be at least two or three different things that Enterprise Architects need to do. One of these is to design modular components that are swappable, so as better systems become available, the better systems can be swapped in. The second element will be to watch for components of value that should be absorbed into the platform itself. As an example, in operating systems, web browsing has effectively been absorbed into the platform, streaming has been absorbed into the platform so that they become aware of how that actually works. A third thing they need to do is talk to the legal team to see where it is that the third parties property rights can be protected so that they invest. One of the biggest mistakes that firms make is to simply assume that because they own the platform, because they have the rights of control, that they can do what they please. If they do that, they risk alienating their ecosystems. So they should talk to their potential developers to incorporate developer concerns. One of my favorite examples is the Intel Architecture Lab which has done a beautiful job of articulating the voices of developers in their own architectural plans. A fourth thing that can be done is an idea borrowed from SAP, that builds Enterprise Architecture—they articulate an 18-24 month roadmap where they say these are the features that are coming, so you can anticipate and build on those. Also it gives you an idea of what features will be safe to build on so you won’t lose the value you’ve created.

What can companies do to begin opening their business models and more easily architect that?

What they should do is to consider four groups articulated earlier— those are the users, the providers, the developers and the sponsors—each serve a different role. Firms need to understand what their own role will be in order that they can open and architect the other roles within their ecosystem. They’ll also need to choose what levels of exclusivity they need to give their ecosystem partners in a different slice of the business. They should also figure out which of those components they prefer to offer themselves as unique competencies and where they need to seek third party assistance, either in new ideas or new resources or even new marketplaces. Those factors will help guide businesses toward different kinds of partnerships, and they’ll have to be open to those kinds of partners. In particular, they should think about where are they most likely to be missing ideas or missing opportunities. Those technical and business areas should open in order that third parties can take advantage of those opportunities and add value.

 

vanalstynemarshallProfessor Van Alstyne is one of the leading experts in network business models. He conducts research on information economics, covering such topics as communications markets, the economics of networks, intellectual property, social effects of technology, and productivity effects of information. As co-developer of the concept of “two sided networks” he has been a major contributor to the theory of network effects, a set of ideas now taught in more than 50 business schools worldwide.

Awards include two patents, National Science Foundation IOC, SGER, SBIR, iCorp and Career Awards, and six best paper awards. Articles or commentary have appeared in Science, Nature, Management Science, Harvard Business Review, Strategic Management Journal, The New York Times, and The Wall Street Journal.

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The Open Group Boston 2014 Preview: Talking People Architecture with David Foote

By The Open Group

Among all the issues that CIOs, CTOs and IT departments are facing today, staffing is likely near the top of the list of what’s keeping them up at night. Sure, there’s dealing with constant (and disruptive) technological changes and keeping up with the latest tech and business trends, such as having a Big Data, Internet of Things (IoT) or a mobile strategy, but without the right people with the right skills at the right time it’s impossible to execute on these initiatives.

Technology jobs are notoriously difficult to fill–far more difficult than positions in other industries where roles and skillsets may be much more static. And because technology is rapidly evolving, the roles for tech workers are also always in flux. Last year you may have needed an Agile developer, but today you may need a mobile developer with secure coding ability and in six months you might need an IoT developer with strong operations or logistics domain experience—with each position requiring different combinations of tech, functional area, solution and “soft” skillsets.

According to David Foote, IT Industry Analyst and co-founder of IT workforce research and advisory firm Foote Partners, the mash-up of HR systems and ad hoc people management practices most companies have been using for years to manage IT workers have become frighteningly ineffective. He says that to cope in today’s environment, companies need to architect their people infrastructure similar to how they have been architecting their technical infrastructure.

“People Architecture” is the term Foote has coined to describe the application of traditional architectural principles and practices that may already be in place elsewhere within an organization and applying them to managing the IT workforce. This includes applying such things as strategy and capability roadmaps, phase gate blueprints, benchmarks, performance metrics, governance practices and stakeholder management to human capital management (HCM).

HCM components for People Architecture typically include job definition and design, compensation, incentives and recognition, skills demand and acquisition, job and career paths, professional development and work/life balance.

Part of the dilemma for employers right now, Foote says, is that there is very little job title standardization in the marketplace and too many job titles floating around IT departments today. “There are too many dimensions and variability in jobs now that companies have gotten lost from an HR perspective. They’re unable to cope with the complexity of defining, determining pay and laying out career paths for all these jobs, for example. For many, serious retention and hiring problems are showing up for the first time. Work-around solutions used for years to cope with systemic weaknesses in their people management systems have stopped working,” says Foote. “Recruiters start picking off their best people and candidates are suddenly rejecting offers and a panic sets in. Tensions are palpable in their IT workforce. These IT realities are pervasive.”

Twenty-five years ago, Foote says, defining roles in IT departments was easier. But then the Internet exploded and technology became far more customer-facing, shifting basic IT responsibilities from highly technical people deep within companies to roles requiring more visibility and transparency within and outside the enterprise. Large chunks of IT budgets moved into the business lines while traditional IT became more of a business itself.

According to Foote, IT roles became siloed not just by technology but by functional areas such as finance and accounting, operations and logistics, sales, marketing and HR systems, and by industry knowledge and customer familiarity. Then the IT professional services industry rapidly expanded to compete with their customers for talent in the marketplace. Even the architect role changed: an Enterprise Architect today can specialize in applications, security or data architecture among others, or focus on a specific industry such as energy, retail or healthcare.

Foote likens the fragmentation of IT jobs and skillsets that’s happening now to the emergence of IT architecture 25 years ago. Just as technical architecture practices emerged to help make sense of the disparate systems rapidly growing within companies and how best to determine the right future tech investments, a people architecture approach today helps organizations better manage an IT workforce spread through the enterprise with roles ranging from architects and analysts to a wide variety of engineers, developers and project and program managers.

“Technical architecture practices were successful because—when you did them well—companies achieved an understanding of what they have systems-wise and then connected it to where they were going and how they were going to get there, all within a process inclusive of all the various stakeholders who shared the risk in the outcome. It helped clearly define enterprise technology capabilities and gave companies more options and flexibility going forward,” according to Foote.

“Right now employers desperately need to incorporate in human capital management systems and practice the same straightforward, inclusive architecture approaches companies are already using in other areas of their businesses. This can go a long way toward not just lessening staffing shortages but also executing more predictably and being more agile in face of constant uncertainties and the accelerating pace of change. Ultimately this translates into a more effective workforce whether they are full-timers or the contingent workforce of part-timers, consultants and contractors.

“It always comes down to your people. That’s not a platitude but a fact,” insists Foote. “If you’re not competitive in today’s labor marketplace and you’re not an employer where people want to work, you’re dead.”

One industry that he says has gotten it right is the consulting industry. “After all, their assets walk out the door every night. Consulting groups within firms such as IBM and Accenture have been good at architecting their staffing because it’s their job to get out in front of what’s coming technologically. Because these firms must anticipate customer needs before they get the call to implement services, they have to be ahead of the curve in already identifying and hiring the bench strength needed to fulfill demand. They do many things right to hire, develop and keep the staff they need in place.”

Unfortunately, many companies take too much of a just-in-time approach to their workforce so they are always managing staffing from a position of scarcity rather than looking ahead, Foote says. But, this is changing, in part due to companies being tired of never having the people they need and being able to execute predictably.

The key is to put a structure in place that addresses a strategy around what a company needs and when. This applies not just to the hiring process, but also to compensation, training and advancement.

“Architecting anything allows you to be able to, in a more organized way, be more agile in dealing with anything that comes at you. That’s the beauty of architecture. You plan for the fact that you’re going to continue to scale and continue to change systems, the world’s going to continue to change, but you have an orderly way to manage the governance, planning and execution of that, the strategy of that and the implementation of decisions knowing that the architecture provides a more agile and flexible modular approach,” he said.

Foote says organizations such as The Open Group can lend themselves to facilitating People Architecture in a couple different ways. First, through extending the principles of architecture to human capital management, and second through vendor-independent, expertise and experience driven certifications, such as TOGAF® or OpenCA and OpenCITS, that help companies define core competencies for people and that provide opportunities for training and career advancement.

“I’m pretty bullish on many vendor-independent certifications in general, particularly where a defined book of knowledge exists that’s achieved wide acceptance in the industry. And that’s what you’ve got with The Open Group. Nobody’s challenging the architectural framework supremacy of TOGAF that that I’m aware of. In fact, large vendors with their own certifications participated actively in developing the framework and applying it very successfully to their business models,” he said.

Although the process of implementing People Architecture can be difficult and may take several years to master (much like Enterprise Architecture), Foote says it is making a huge difference for companies that implement it.

To learn more about People Architecture and models for implementing it, plan to attend Foote’s session at The Open Group Boston 2014 on Tuesday July 22. Foote’s session will address how architectural principles are being applied to human capital so that organizations can better manage their workforces from hiring and training through compensation, incentives and advancement. He will also discuss how career paths for EAs can be architected. Following the conference, the session proceedings will be available to Open Group members and conference attendees at www.opengroup.org.

Join the conversation – #ogchat #ogBOS

footeDavid Foote is an IT industry research pioneer, innovator, and one of the most quoted industry analysts on global IT workforce trends and multiple facets of the human side of technology value creation. His two decades of groundbreaking deep research and analysis of IT-business cross-skilling and technology/business management integration and leading the industry in innovative IT skills demand and compensation benchmarking has earned him a place on a short list of thought leaders in IT human capital management.

A former Gartner and META Group analyst, David leads the research and analytical practice groups at Foote Partners that reach 2,300 customers on six continents.

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The Enterprise Architecture Kaleidoscope

By Stuart Boardman, Senior Business Consultant, Business & IT Advisory, KPN Consulting

Last week I attended a Club of Rome (Netherlands) debate about a draft report on sustainability and social responsibility. The author of the report described his approach as being like a kaleidoscope, because the same set of elements can form quite different pictures.

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Some people had some difficulty with this. They wanted a single picture they could focus on. To me it felt quite natural, because that’s very much what we try to do in Enterprise Architecture (EA) – produce different views of the same whole for the benefit of different stakeholders. And suddenly I realized how to express the relationship between EA and a broader topic like sustainability. That matters to me, because sustainability is something I’m passionate about and I’d like my work to be some small contribution to achieving that.

Before that, I’d been thinking that EA obviously has a role to play in a sustainable enterprise but I hadn’t convinced myself that the relationship was so fundamental – it felt a bit too much like wishful thinking on my part.

When we talk about sustainability today, we need to be clear that we’re not just talking about environmental issues and we’re certainly not talking about “greenwashing”. There’s an increasing awareness that a change needs to occur (and is to some extent occurring) in how we work, how we do business, how we relate to and value each other and how we relate to and value our natural environment.

This is relevant too for The Open Group Open Platform 3.0™. Plenty is written these days about the role that the Internet of Things and Big Data Analytics can play in sustainability. A lot is actually happening. Too much of this fails to take any account of the kaleidoscope and offers a purely technological and resource centric view of a shining future. People are reduced to being the happy consumers of this particular soma. By bringing other factors and in particular social media and locating the discussion in The Open Group’s traditions of Enterprise Architecture (and see also The Open Group’s work on Identity), these rather dangerous limitations can be overcome.

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 Source: Wikipedia

Success in any one of these areas is dependent on success in the others. That was really the message of the Club of Rome discussion.

And that’s where EA comes in – the architecture of a global enterprise. There are multiple stakeholders with multiple concerns. They range from a CEO with a company to keep afloat to a farming community, whose livelihood is threatened by a giant coal mine. They also include those whose livelihood is threatened by closing that mine and governments saddled with crippling national debt. They include the people working to achieve change. These people also have their own areas of focus within the overall picture. There are people designing the new solutions – technological or otherwise. There are the people who will have to operate the changed situation. There are the stewards for the natural environment and the non-human inhabitants of platform Earth.

Now Enterprise Architects are in a sense always concerned with sustainability, at least at the micro level of one organization or enterprise. We try to develop an architecture in which the whole enterprise (and all its parts) can achieve its goals – with a minimum of instability and with the ability to respond effectively to change. That in and of itself requires us to be aware of what’s going on in the world outside our organization’s direct sphere of influence, so it’s a small step to looking at a broader picture and wondering what the future of the enterprise might be in a non-sustainable world.

The next step is an obvious one for any Enterprise Architect – well actually any architect at all in any kind of enterprise. This isn’t a political or moral question (although architects have as much right as anyone to else to such considerations) but really just one of drawing conclusions, which are logical and obvious – unless one is merely driven by short-term considerations. What you do with those conclusions is up to you and constrained by your own situation. You do what you can. You can take the campaigning viewpoint or look for collateral lack of damage or just facilitate sustainability when it’s on the agenda – look for opportunities for re-use or repair. And if your situation is one where nothing is possible, you might want to be thinking about moving on.

Sustainability is not conservatism. Some things reach the end of their useful life or can’t survive unexpected and/or dramatic changes. Some things actually improve as a result of taking a serious knock – what Nicholas Nassim Taleb calls anti-fragility. That’s true in nature at both micro and macro levels and it’s particularly true in nature. It’s not surprising that the ideas of biomimicry are rapidly gaining traction in sustainability circles.

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In this sense, agile is really about sustainability. When we work with agile methods, we’re not trying to create something changeless. We’re trying to create a way of working in which our enterprise or some small part of it, can change and adapt so as to continue to fulfill its mission for so long as that remains relevant in the world.

So yes, there’s a lot an (enterprise) architect can do towards achieving a sustainable world and there are more than enough reasons that’s consistent with our role in the organizations and enterprises we serve.

Agreed? Not? Please comment one way or the other and let’s continue the discussion.

SONY DSCStuart Boardman is a Senior Business Consultant with KPN Consulting where he leads the Enterprise Architecture practice and consults to clients on Cloud Computing, Enterprise Mobility and The Internet of Everything. He is Co-Chair of The Open Group Open Platform 3.0™ Forum and was Co-Chair of the Cloud Computing Work Group’s Security for the Cloud and SOA project and a founding member of both The Open Group Cloud Computing Work Group and The Open Group SOA Work Group. Stuart is the author of publications by KPN, the Information Security Platform (PvIB) in The Netherlands and of his previous employer, CGI as well as several Open Group white papers, guides and standards. He is a frequent speaker at conferences on the topics of Open Platform 3.0 and Identity.

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Business Capabilities – Taking Your Organization into the Next Dimension

By Stuart Macgregor, Chief Executive, Real IRM Solutions

Decision-makers in large enterprises today face a number of paradoxes when it comes to implementing a business operating model and deploying Enterprise Architecture:

- How to stabilize and embed concrete systems that ensure control and predictability, but at the same time remain flexible and open to new innovations?

- How to employ new technology to improve the productivity of the enterprise and its staff in the face of continual pressures on the IT budget?

- How to ensure that Enterprise Architecture delivers tangible results today, but remains relevant in an uncertain future environment.

Answering these tough questions requires an enterprise to elevate its thinking beyond ‘business processes’ and develop a thorough understanding of its ‘business capabilities’. It demands that the enterprise optimizes and leverages these capabilities to improve every aspect of the business – from coal-face operations to blue-sky strategy.

Business capabilities articulate an organization’s inner-workings: the people, process, technology, tools, and content (information). Capabilities map the ways in which each component interfaces with each other, developing an intricate line-drawing of the entire organizational ecosystem at a technical and social level.  By understanding one’s current business capabilities, an organization is armed with a strategic planning tool. We refer to what is known as the BIDAT framework – which addresses the business, information, data, applications and technology architecture domains.

From this analysis, the journey to addressing the organization’s Enterprise Architecture estate begins. This culminates in the organization being able to dynamically optimize, add and improve on its capabilities as the external environment shifts and evolves. A BIDAT approach provides a permanent bridge between the two islands of business architecture and technology architecture.

Put another way, business capability management utilizes the right architectural solutions to deliver the business strategy. In this way, Enterprise Architecture is inextricably linked to capability management. It is the integrated architecture (combined with effective organizational change leadership) that develops the business capabilities and unleashes their power.

This can at times feel very conceptual and hard to apply to real-world environments. Perhaps the best recent example of tangible widespread implementations of a capability-based Enterprise Architecture approach is in South Africa’s minerals and mining sector.

Known as the Exploration and Mining Business Capability Reference Map, and published as part of a set of standards, this framework was developed by The Open Group Exploration, Mining, Metals and Minerals (EMMM™) Forum.  Focusing on all levels of mining operations, from strategic planning, portfolio planning, program enablement and project enablement – and based on the principles of open standards – this framework provides miners with a capability-based approach to information, processes, technology, and people.

The Reference Map isolates specific capabilities within mining organizations, analyzes them from multiple dimensions, and shows their various relationships to other parts of the organization. In the context of increased automation in the mining sector, this becomes an invaluable tool in determining those functions that are ripe for automation.

In this new dimension, this new era of business, there is no reason why achievements from the EMMM’s Business Capability Reference Map cannot be repeated in every industry, and in every mid- to large-scale enterprise throughout the globe.

For more information on joining The Open Group, please visit:  http://www.opengroup.org/getinvolved/becomeamember

For more information on joining The Open Group EMMM™ Forum, please visit:  http://opengroup.co.za/emmm

Photo - Stuart #2Stuart Macgregor is the Chief Executive of the South African company, Real IRM Solutions. Through his personal achievements, he has gained the reputation of an Enterprise Architecture and IT Governance specialist, both in South Africa and internationally.

Macgregor participated in the development of the Microsoft Enterprise Computing Roadmap in Seattle. He was then invited by John Zachman to Scottsdale Arizona to present a paper on using the Zachman framework to implement ERP systems. In addition, Macgregor was selected as a member of both the SAP AG Global Customer Council for Knowledge Management, and of the panel that developed COBIT 3rd Edition Management Guidelines. He has also assisted a global Life Sciences manufacturer to define their IT Governance framework, a major financial institution to define their global, regional and local IT organizational designs and strategy. He was also selected as a core member of the team that developed the South African Breweries (SABMiller) plc global IT strategy.

Stuart, as the lead researcher, assisted the IT Governance Institute map CobiT 4.0 to TOGAF® This mapping document was published by ISACA and The Open Group. More recently, he participated in the COBIT 5 development workshop held in London during May 2010.

 

 

 

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Improving Patient Care and Reducing Costs in Healthcare – Join The Open Group Tweet Jam on Wednesday, April 23

By Jason Lee, Director of Healthcare and Security Forums, The Open Group

On Wednesday, April 23 at 9:00 am PT/12:00 pm ET/5:00 pm GMT, The Open Group Healthcare Forum will host a tweet jam to discuss the issues around healthcare and improving patient care while reducing costs. Many healthcare payer and provider organizations today are facing numerous “must do” priorities, including EHR implementation, transitioning to ICD-10, and meeting enhanced HIPAA security requirements.

This tweet jam will focus on opportunities that healthcare organizations have available to improve patient care and reduce costs associated with capturing, maintaining, and sharing patient information. It will also explore how using Enterprise Architectural approaches that have proven effective in other industries will apply to the healthcare sector and dramatically improve both costs and patient care.

In addition to the need for implementing integrated digital health records that can be shared across health organizations to maximize care for both patients who don’t want to repeat themselves and the doctors providing their care, we’ll explore what other solutions exist to enhance information flow. For example, did you know that a new social network for M.D.s has even emerged to connect and communicate across teams, hospitals and entire health systems? The new network, called Doximity, boasts that 40 percent of U.S. doctors have signed on. Not only are doctors using social media, they’re using software specifically designed for the iPad that roughly 68 percent of doctors are carrying around. One hospital even calculated its return on investment of utilizing a an iPad in just nine days!

We’ll be talking about how many healthcare thought leaders are looking at technology and its influence on online collaboration, patient telemonitoring and information flow.

We welcome The Open Group members and interested participants from all backgrounds to join the discussion and interact with our panel of thought-leaders including Jim Hietala, Vice President of Security; David Lounsbury, CTO; and Dr. Chris Harding, Forum Director of Open Platform 3.0™ Forum. To access the discussion, please follow the hashtag #ogchat during the allotted discussion time.

Interested in joining The Open Group Healthcare Forum? Register your interest, here.

What Is a Tweet Jam?

The Open Group tweet jam, approximately 45 minutes in length, is a “discussion” hosted on Twitter. The purpose of the tweet jam is to share knowledge and answer questions on relevant and thought-provoking issues. Each tweet jam is led by a moderator and a dedicated group of experts to keep the discussion flowing. The public (or anyone using Twitter interested in the topic) is encouraged to join the discussion.

Participation Guidance

Whether you’re a newbie or veteran Twitter user, here are a few tips to keep in mind:

Have your first #ogchat tweet be a self-introduction: name, affiliation, occupation.

Start all other tweets with the question number you’re responding to and add the #ogchat hashtag.

Sample: Q1 What barriers exist for collaboration among providers in healthcare, and what can be done to improve things? #ogchat

Please refrain from product or service promotions. The goal of a tweet jam is to encourage an exchange of knowledge and stimulate discussion.

While this is a professional get-together, we don’t have to be stiff! Informality will not be an issue.

A tweet jam is akin to a public forum, panel discussion or Town Hall meeting – let’s be focused and thoughtful.

If you have any questions prior to the event or would like to join as a participant, please contact Rob Checkal (@robcheckal or rob.checkal@hotwirepr.com). We anticipate a lively chat and hope you will be able to join!

Jason Lee headshotJason Lee, Director of Healthcare and Security Forums at The Open Group, has conducted healthcare research, policy analysis and consulting for over 20 years. He is a nationally recognized expert in healthcare organization, finance and delivery and applies his expertise to a wide range of issues, including healthcare quality, value-based healthcare, and patient-centered outcomes research. Jason worked for the legislative branch of the U.S. Congress from 1990-2000 — first at GAO, then at CRS, then as Health Policy Counsel for the Chairman of the House Energy and Commerce Committee (in which role the National Journal named him a “Top Congressional Aide” and he was profiled in the Almanac of the Unelected). Subsequently, Jason held roles of increasing responsibility with non-profit organizations — including AcademyHealth, NORC, NIHCM, and NEHI. Jason has published quantitative and qualitative findings in Health Affairs and other journals and his work has been quoted in Newsweek, the Wall Street Journal and a host of trade publications. He is a Fellow of the Employee Benefit Research Institute, was an adjunct faculty member at the George Washington University, and has served on several boards. Jason earned a Ph.D. in social psychology from the University of Michigan and completed two postdoctoral programs (supported by the National Science Foundation and the National Institutes of Health). He is the proud father of twins and lives outside of Boston.

 

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Filed under Boundaryless Information Flow™, Enterprise Architecture, Healthcare, Tweet Jam

What the C-Suite Needs to Prepare for in the Era of BYO Technology

By Allen Brown, President and CEO, The Open Group

IT today is increasingly being driven by end-users. This phenomenon, known as the “consumerization of IT,” is a result of how pervasive technology has become in daily life. Years ago, IT was the primarily the realm of technologists and engineers. Most people, whether in business settings or at home, did not have the technical know-how to source their own applications, write code for a web page or even set up their own workstation.

Today’s technologies are more user-friendly than ever and they’ve become ubiquitous. The introduction of smartphones and tablets has ushered in the era of “BYO” with consumers now bringing the technologies they like and are most comfortable working with into the workplace, all with the expectation that IT will support them. The days where IT decided what technologies would be used within an organization are no more.

At the same time, IT has lost another level of influence due to Cloud computing and Big Data. Again, the “consumers” of IT within the enterprise—line of business managers, developers, marketers, etc.—are driving these changes. Just as users want the agility offered by the devices they know and love, they also want to be able to buy and use the technologies they need to do their job and do it on the fly rather than wait for an IT department to go through a months’ (or years’) long process of requisitions and approvals. And it’s not just developers or IT staff that are sourcing their own applications—marketers are buying applications with their credit cards, and desktop users are sharing documents and spreadsheets via web-based office solutions.

When you can easily buy the processing capacity you need when you need it with your credit card or use applications online for free, why wait for approval?

The convergence of this next era of computing – we call it Open Platform 3.0™ – is creating a Balkanization of the traditional IT department. IT is no longer the control center for technology resources. As we’ve been witnessing over the past few years and as industry pundits have been prognosticating, IT is changing to become more of a service-based command central than a control center from which IT decisions are made.

These changes are happening within enterprises everywhere. The tides of change being brought about by Open Platform 3.0 cannot be held back. As I mentioned in my recent blog on Future Shock and the need for agile organizations, adaptation will be key for companies’ survival as constant change and immediacy become the “new normal” for how they operate.

These changes will, in fact, be positive for most organizations. As technologies converge and users drive the breakdown of traditional departmental silos and stovepipes, organizations will become more interoperable. More than ever, new computing models are driving the industry toward The Open Group’s vision of Boundaryless Information Flow™ within organizations. But the changes resulting from consumer-led IT are not just the problem of the IT department. They are on track to usher in a whole host of organizational changes that all executives must not only be aware of, but must also prepare and plan for.

One of the core of issues around consumerized IT that must be considered is the control of resources. Resource planning in terms of enabling business processes through technology must now be the concern of every person within the C-Suite from the CEO to the CIO and even the CMO.

Take, for example, the financial controls that must be considered in a BYO world. This issue, in particular, hits two very distinct centers of operations most closely—the offices of both the CIO and the CFO.

In the traditional IT paradigm, technology has been a cost center for most businesses with CFOs usually having the final say in what technologies can be bought and used based on budget. There have been very specific controls placed on purchases, each leaving an audit trail that the finance department could easily track and handle. With the Open Platform 3.0 paradigm, those controls go straight out the window. When someone in marketing buys and uses an application on their own without the CIO approving its use or the CFO having an paper trail for the purchase, accounting and financial or technology auditing can become a potential corporate nightmare.

Alternatively, when users share information over the Web using online documents, the CIO, CTO or CSO may have no idea what information is going in and out of the organization or how secure it is. But sharing information through web-based documents—or a CRM system—might be the best way for the CMO to work with vendors or customers or keep track of them. The CMO may also need to begin tracking IT purchases within their own department.

The audit trail that must be considered in this new computing era can extend in many directions. IT may need an accounting of technical and personal assets. Legal may need information for e-Discovery purposes—how does one account for information stored on tablets or smartphones brought from home or work-related emails from sent from personal accounts? The CSO may require risk assessments to be performed on all devices or may need to determine how far an organization’s “perimeter” extends for security purposes. The trail is potentially as large as the organization itself and its entire extended network of employees, vendors, customers, etc.

What can organizations do to help mitigate the potential chaos of a consumer-led IT revolution?

Adapt. Be flexible and nimble. Plan ahead. Strategize. Start talking about what these changes will mean for your organization—and do it sooner rather than later. Work together. Help create standards that can help organizations maintain flexible but open parameters (and perimeters) for sourcing and sharing resources.

Executive teams, in particular, will need to know more about the functions of other departments than ever before. IT departments—including CTOs and EAs—will need to know more about other business functions—such as finance—if they are to become IT service centers. CFOs will need to know more about technology, security, marketing and strategic planning. CMOs and CIOs will need to understand regulatory guidelines not only around securing information but around risk and data privacy.

Putting enterprise and business architectures and industry standards in place can go a long way toward helping to create structures that maintain a healthy balance between providing the flexibility needed for Open Platform 3.0 and BYO while allowing enough organizational control to prevent chaos. With open architectures and standards, organizations will better be able to decide where controls are needed and when and how information should be shared among departments. Interoperability and Boundaryless Information Flow—where and when they’re needed—will be key components of these architectures.

The convergence being brought about Open Platform 3.0 is not just about technology. It’s about the convergence of many things—IT, people, operations, processes, information. It will require significant cultural changes for most organizations and within different departments and organizational functions that are not used to sharing, processing and analyzing information beyond the silos that have been built up around them.

In this new computing model, Enterprise Architectures, interoperability and standards can and must play a central role in guiding the C-Suite through this time of rapid change so that users have the tools they need to be able to innovate, executives have the information they need to steer the proverbial ship and organizations don’t get left behind.

brown-smallAllen Brown is the President and CEO of The Open GroupFor more than ten years, he has been responsible for driving the organization’s strategic plan and day-to-day operations; he was also instrumental in the creation of the Association of Enterprise Architects (AEA). Allen is based in the U.K.

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Filed under Business Architecture, Cloud/SOA, Enterprise Architecture, Enterprise Transformation, Standards, Uncategorized

Secure Integration of Convergent Technologies – a Challenge for Open Platform™

By Dr. Chris Harding, The Open Group

The results of The Open Group Convergent Technologies survey point to secure integration of the technologies as a major challenge for Open Platform 3.0.  This and other input is the basis for the definition of the platform, where the discussion took place at The Open Group conference in London.

Survey Highlights

Here are some of the highlights from The Open Group Convergent Technologies survey.

  • 95% of respondents felt that the convergence of technologies such as social media, mobility, cloud, big data, and the Internet of things represents an opportunity for business
  • Mobility currently has greatest take-up of these technologies, and the Internet of things has least.
  • 84% of those from companies creating solutions want to deal with two or more of the technologies in combination.
  • Developing the understanding of the technologies by potential customers is the first problem that solution creators must overcome. This is followed by integrating with products, services and solutions from other suppliers, and using more than one technology in combination.
  • Respondents saw security, vendor lock-in, integration and regulatory compliance as the main problems for users of software that enables use of these convergent technologies for business purposes.
  • When users are considered separately from other respondents, security and vendor lock-in show particularly strongly as issues.

The full survey report is available at: https://www2.opengroup.org/ogsys/catalog/R130

Open Platform 3.0

Analysts forecast that convergence of technical phenomena including mobility, cloud, social media, and big data will drive the growth in use of information technology through 2020. Open Platform 3.0 is an initiative that will advance The Open Group vision of Boundaryless Information Flow™ by helping enterprises to use them.

The survey confirms the value of an open platform to protect users of these technologies from vendor lock-in. It also shows that security is a key concern that must be addressed, that the platform must make the technologies easy to use, and that it must enable them to be used in combination.

Understanding the Requirements

The Open Group is conducting other work to develop an understanding of the requirements of Open Platform 3.0. This includes:

  • The Open Platform 3.0 Business Scenario, that was recently published, and is available from https://www2.opengroup.org/ogsys/catalog/R130
  • A set of business use cases, currently in development
  • A high-level round-table meeting to gain the perspective of CIOs, who will be key stakeholders.

The requirements input have been part of the discussion at The Open Group Conference, which took place in London this week. Monday’s keynote presentation by Andy Mulholland, Former Global CTO at Capgemini on “Just Exactly What Is Going on in Business and Technology?” included the conclusions from the round-table meeting. This week’s presentation and panel discussion on the requirements for Open Platform 3.0 covered all the inputs.

Delivering the Platform

Review of the inputs in the conference was followed by a members meeting of the Open Platform 3.0 Forum, to start developing the architecture of Open Platform 3.0, and to plan the delivery of the platform definition. The aim is to have a snapshot of the definition early in 2014, and to deliver the first version of the standard a year later.

Meeting the Challenge

Open Platform 3.0 will be crucial to establishing openness and interoperability in the new generation of information technologies. This is of first importance for everyone in the IT industry.

Following the conference, there will be an opportunity for everyone to input material and ideas for the definition of the platform. If you want to be part of the community that shapes the definition, to work on it with like-minded people in other companies, and to gain early insight of what it will be, then your company must join the Open Platform 3.0 Forum. (For more information on this, contact Chris Parnell – c.parnell@opengroup.org)

Providing for secure integration of the convergent technologies, and meeting the other requirements for Open Platform 3.0, will be a difficult but exciting challenge. I’m looking forward to continue to tackle the challenge with the Forum members.

Dr. Chris Harding

Dr. Chris Harding is Director for Interoperability and SOA at The Open Group. He has been with The Open Group for more than ten years, and is currently responsible for managing and supporting its work on interoperability, including SOA and interoperability aspects of Cloud Computing, and the Open Platform 3.0 Forum. He is a member of the BCS, the IEEE and the AEA, and is a certified TOGAF® practitioner.

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Filed under Cloud/SOA, Standards, Service Oriented Architecture, Semantic Interoperability, Data management, Conference, Open Platform 3.0, Future Technologies