This is the story of the Banker and the Pig. It is not based on any specific single reality but on the collection of many factors. It’s based on the presentation I prepared called Unbundling the bank.
”Oh no!”, says the (fictional) Banker (not related to any actual banker I have met!) on seeing the initial slides from the Unbundling the Bank presentation.
“We live in a multi-sourced, software+service (Hybrid Cloud) world!” ”We just didn’t know it!” ”But hold on” ”Isn’t SOA dead?” ”Didn’t SOA fail to deliver a return on investment (ROI)?”
“And anyway, we’re too silo’d and project and opportunity driven to consider adding cloud to the mix too!” the Banker concludes, almost looking a little relieved.
“Ah yes, but the problem isn’t with SOA it’s with the SOA Junkies!” says the Pig.
“The SOA Junkies?” shrieks the Banker!
“Yes” says the Pig calmly.
“They think too much like Adam Smith with his division of labour and Henry Ford with his assembly line! They’re too Task oriented!”
“They think in terms of the Separation of Concerns, abstractions, and ah … yes Re-Use, the magical holy grail of Re-use!” continues the Pig.
“How many times have we tried to deliver the ‘Single view of the Customer?’” asks the Pig rhetorically!
“These approaches just breed more complexity and like the forth bridge, never end, adding little if any business value as a consequence. All they do is pile on the technical debt from which IT slowly suffocates” remarks the Pig.
“The problem is that the approach is based on technology principles instead of the principles of business!”
“We need to look above the ‘HOW’; above the layers of people, process and especially the technology.”
“We need to focus on instead, on the ‘WHAT’ instead! We need to map the enterprise that describe its Business Capabilities. These encapsulate the people, process and technology, and unlike these things, capabilities are stable, unchanging, self-contained, measurable and above all value-oriented in relation to the business.”
“Oh!”, says the Banker!
“So let’s step back for a moment” says the Pig “and ask ourselves, what is the Enterprise?”
“Obviously, there are customers, one hopes! And then there are the Business partners, but what is actually inside that box we call the enterprise?”
The Banker is puzzled.
“Well I’ll tell you”, says the Pig, “It’s interesting, but from a capability perspective enterprises look remarkably similar to each other!”
“Ugh?” snorts the Banker.
“Looking at an enterprise’s capabilities at the top most level and we can see a regular pattern of capabilities that occur in all enterprises.”
“Firstly, there is a capability to plan new products and services.”
“Next, there is the capability to develop these new products or services”
“Third, there is create demand for these new products and services”
“And finally there is the need to Fulfil the delivery of these products and services. Simple, but amazing in the same way.” says the Pig with an air of triumph.
“All there is to an enterprise is simply Plan, Develop, Demand and Fulfil! Oh and add to this Collaborate too and that’s it; the 5 core capabilities that every enterprise or business has!”
“But hold on this can’t be all there is to it, surely!” questions a rather bemused looking Banker.
“Well of course not!” chuckles the Pig, “Each of these capabilities contains 1 to many sub-capabilities and these then contain more capabilities within them! So far we’ve taken capabilities down 5 levels and it still amazes me that this model holds true across the vast majority of enterprises we’ve seen!”
“Of course, there is variance, but there is about a 70% recurrence of these capabilities, even down to level 5, across enterprises, and across verticals!”
“Ah how I love patterns” sighs the Pig looking upward as if to look for some hidden force.
“Ok, ok, so this is all very good” says the Banker, a little impatiently. “I can see that this is all very nice and pretty, but there’s devil in the details of those little capabilities!”
“There’s still the problem with the HOW!”
“Ah yes”, says the pig, nodding his head knowingly.
“Because these capabilities are stable, well defined and measurable, you can ask questions of them, value-oriented questions like, ‘what’s your value to the business?’ and ‘How healthy are you?’”.
“From the answers you get back you can produce a heat map of the enterprise that will give you a view of the health of your enterprise and more over where to focus your efforts in drilling down into the capabilities below, to find out what really is at fault and where to prioritise your efforts!”
“You can do this as a light-touch mapping across the enterprise and only drill down on the areas that flag up through the heat maps. Making it and efficient process”
“Ahhh” says the Banker, relaxing his facial expression slightly for the first time.
“But here’s the thing …” whispers the pig, leaning forward as if to ensure that this is for the Bankers ears only.
“Capabilities allow you to decompose the enterprise into discrete self contained units of specialisation, in so doing you can differentiate between the ones you care about; that creat value, and the ones you don’t.”
“You can then think about unbundling yourself from the cost of managing and maintaining these yourself.”
You can plan to move these away from a ‘bespoke’ internalised model to that of a more ‘standardised’ model.”
“Think of these capabilities as being like mini-enterprises all neat and self-governing and that the HOW might not need to be your problem at all” the Pig Winked.
“Oooh” says the Banker, his eyes widening, but this time less in shock and more in anticipation.
“Exactly”, says the Pig. “Now you’re looking at your enterprise differently aren’t you.”
“A suite of mini-enterprises doing stuff themselves, but collaborating to deliver a bigger result than they can do themselves. Some may even deliver their capability to another enterprise in time. This happens already if you consider the SaaS applications you are using today!”
“Furthermore, you can create new dynamic specialised capabilities and build them in the model of being a mini enterprise, able to persist on their own, without the layers of management that the models of the industrial era would and do enforce.”
“One day, like others before them, these once innovations, now commodity capabilities could be set free to find other consumers or markets and maintain their own innovation edge.”
“Now you have unlocked a new kind of strategy strategy; that of the New Model Enterprise (NME) based on Business Service Centric Principles!”
“And you can start to take advantage of the multi-sourced Software + Service (Hybrid Cloud) that you know we already live in.”
“Oh my!” gasps the Banker!
“Don’t believe me?” asks the Pig?
“Hmmm?” questions the Banker.
“Just go and ask the other banks …” said the Pig.
And with a nonchalant flick his tail, the Pig hoped off the Bankers head and returned to his glorious mud bath.
After all it really was the most splendid weather for the time of year!
It’s interesting to note from Joe Mckendrick’s, SOA’s Dead, long Live Services blog that Gartner suggest SaaS doesn’t equal as much as 1% of enterprise IT Budget spend. But as Joe comments, the market seems healthy enough and it’s worth looking at some of Ray Wang’s numbers who reports that “SaaS vendors kept steady growth in the double digits”.