An analysis on the next major paradigm shift.
The goal of most business is to grow revenue, whilst reducing costs and increasing profits - sounds simple enough.
The problem is, we often have to invest a substantial amount of capital in the business only to get a return on that investment over a number of years. It is this investment that is usually an inhibiter to a business adopting a best of breed approach resulting in sub-par solutions full of technical debt which is then difficult to maintain. The business gets bound to key staff, infrastructure that becomes obsolete, software that requires constant upgrades and excessive ongoing ’business-as-usual’ costs.
As modern businesses attempt to become more efficient through the use of technology, they sometimes hedge due to the risk/ROI ratio that includes a large ticket price and a moderate time to market.
They essentially see the benefits like opening up their ‘digital channel’, or making their core systems more cohesive and the business more efficient. However, they can’t justify the unguaranteed ROI over a multi-year return period.
It’s a problem faced by Tier-n companies as they are constantly under pressure to reduce IT costs and until now their options have been limited to some form of outsourcing. Anyone who has worked in the industry knows that it does not work and quality is the victim. It’s a strategy mostly enforced by short term thinkers who need to hit short term KPI’s and who create a problem for the next person to fix. It’s time for a paradigm shift in thinking how we can reduce cost and maintain quality and even improve it.
Let’s look at this considering an analysis of 4 different models.
We’ll assume that a company or business has decided it can achieve process improvement through systems integration, or they just need to reduce IT costs, and that includes the yearly integration bill. It might seem odd to bundle these two opposing motivations into the same motivation for change – but in essence they are the same: Positive IT outcomes that help improve the business at a reasonable cost.
What options do these organizations have:
- Enterprise Integration Software - Mature, fully featured established integration platforms which are the preferred option, however the higher license costs make these an expensive option
- Opensource software - Whilst this option is appealing due to the lower license fee (opensource rarely means ‘free’), the business will most likely spend the majority of any license costs savings on building the appropriate framework and establishing a platform
- A Custom Solution - Many tier 2 or 3 organizations feel they can get away with developing a custom solution to suit their needs. What often happens is the final solution is barely functional and lacks the inherent platform functionality often required to meet minimal requirements or regulatory requirements
- Managed Integration Delivery as a Service (MiDaaS) - The paradigm shift. A complete subscription based managed service. This option gives you the full feature stack of the Enterprise Software at an affordable price, lower overheads and a quicker time to market.
Let’s take a look at where each of these options may work:
Traditional approach with large overheads, establishment costs, large license and support fees, and are generally tied to larger transformation projects. This results in maintaining staff and capability over a longer period.
The perception that opensource is freeware is a misconception. These platforms do have a licensing component, and there is also the issue of resourcing with skilled people, and the software itself having the inherent frameworks of the Enterprise software. This may result in cheaper licensing costs, however, it will most likely result in a more expensive development cost. It also does not solve the issue of maintaining capability, staff and infrastructure overheads.
From the seeds of a custom solution, I give you technical debt and key resource reliability and constraint. Custom solutions are good if you are tweaking your spreadsheet, or writing a small piece of code to make you irritating daily task easier to do, but in the realm of system integration, there is always a techie who thinks they can build their own integration platform.
This is OK if you have 2 systems doing point to point and 1 or 2 integrations and you don’t want to expose those systems for consumption elsewhere. All custom solutions very quickly outgrow their use as they soon discover that logging, message affinity, auditing etc., are pretty important things. What seemed like a quick time to market at the time soon becomes a functionally limited highly customized piece of software that 1 person knows how to fix…
Managed Integration Delivery as a Service (MiDaaS)
- Has the horsepower of the Enterprise software
- Lower Total Cost of Ownership
- Makes the organization technology agnostic
- No technical debt will be carried by the business
- Key resources/Capability maintenance/Staff overheads are no longer a problem
- Subscription based pricing includes all infrastructure, design, build, test, maintenance, monitoring and alerting are all included
- Reduces yearly cost of integration by a significant amount
- Local account presence
- Quality assured and consistency of service
- Upgrades, maintenance, monitoring and alerting are all included
In today’s world we are seeing a shift to the cloud and a form of managed services that see organizations infrastructure being managed by 3rd parties, but the actual work being done on the applications on that infrastructure is still managed in-house. What I’m talking about is managing the complete Integration service from Design to BAU. Sure all of the other approaches have their place for the moment because existing systems, teams, IT managers etc. are all in place and can’t see how to make the move to a fully managed service. However, if we can make the move to the cloud, it shouldn’t take much to nudge us further along.
We are already seeing companies move to this model as they can see the immediate benefits and cost savings they can realize for their business. This shift will continue at an increased pace once other companies see the benefits being realized by their competitors.
The paradigm shift is here.