Ten Excepts From Business Architecture Brainstorming

From Wickipedia, A business architecture is a part of an enterprise architecture related to corporate business, and the documents and diagrams that describe that architectural structure of business. People who build business architecture are known as Business Architects. Business architecture bridges between the enterprise business model and enterprise strategy on one side and the business functionality of the enterprise on another side.

Below are ten additional insights about BA via LinkedIn Brainstorming: 

1. Business architecture seeks to represent the architecture of an organization in terms of performance, process, information and capability - either as it exists or as it is intended to be, thereby facilitating the planning and communicating of business change initiatives.

2. Business Architecture is the requirement set for the Business;  IT architecture may be one of those requirements. Other requirements might include Capabilities, Processes, changes in organizational structure, changes in value chains and systems.

3. Business Architecture is a series of methods and industry standard practices to describe what you do, why, how, where and whom derives or contributes value of such interactions. It’s about 90% of Why & What, and 10% of How.  This is captured at a high level in a current state ("as is"), an idealized future view ("to be") and a roadmap to take us there.

4. Business Architecture input can be used into organizational structure, and scope of responsibilities in an alliance type venture; BA input can also be used into where to direct resources and attention to strengthen business capabilities;

5. BA helps orchestrate the interrelationship between people and process, enterprise as a whole is more about people, process and technology. And EA = EBA + EITA, , BA may focus on strategy maps, organizational structure, business capability analysis, BA can also be taken as an effective communication tool with well-visualized deliverables. 

  

6. Business architecture need define the following components:
   1) A framework for Business Architecture
   2) A Method (Cookbook)
   3) A set of deliverables
   4) A Meta model

  

7. BA's Purpose: As an effective communication & governance tool to blueprint future of business, BA is not just for knowledge collection, more about capturing business insight/foresight.
   
   
8. BA's Main Components: Business Value System, Organizational Structure, Business Processes, Business Capability, Business Culture…..

9. BA's Hierarchy: A significant component of EA, 95% of votes agree EA = EBA + EITA

10. BA's Users/Customers: Besides enterprise architects and business analysts, management teams from top-down, use BA to help in decision making. 
    
    

 The Future of BA Brainstorm:

• Is there such thing as Agile BA or Social BA—the Blueprint for Social Enterprise or Agile Business.

• Should Business Culture be included into BA?

• How to make BA deliverable more visualized to delight users?

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Three DIYs at Future of Enterprise

Do not go where the path may lead, go instead where there is no path and leave a trail.    -- Ralph Waldo Emerson

Contemporary business becomes more complex than ever, due to the velocity and variety of changes and interdependent business eco-system, there's often a gap between what leadership says it wants and the types of behaviors that their management processes actually encourage. Therefore,  DIY –“Do It Yourself” culture should be promoting and permeating into future of true democratizing enterprise, from self-service leadership, to self-managing team, and self-service data and analytics,  as every leader and her/his organization will be pondering:

• How can we be small and big at the same time, young and old, brave and wise, deep and broad?
• How can we move towards a management model which works more with and less against human nature?
• How can we qualify our thinking process to make decisions with the right data at the right time and at the right level?
• How can we practice the coherent set of leadership and management principles?

1. Self-Service Leadership

• Self-Service Leaders Convey Authenticity

 Leaders behavior is shaped by how leaders perceive themselves, by their character, drives and vision. At today’s social era, it’s more effective for leaders to lead via self-reflection or “self service”, such as blog or communicate through multiple social channels,  in order to deliver more cohesive message about authentic self and thought process in key decision making,  to build up unique leadership signature

The self-service leadership will deliver one’s self-concept which is reflected in the choices we make, how to procure the products and service, the criteria when selecting vendors, the value we appreciate, what professions to pursue, and how to exercise leadership., etc.

The good leaders are also good communicators. They have empathy to understand different audiences, and communicate appropriately in the right forms to the right people at the right level; The media may glorify and vilify a leader overnight, the rumors may destroy leaders’ reputation once a while, but a self-service leader will have self-confidence to deliver the vision when they encounter resistance, but also have self-awareness, be cautious about too strong ego which may become arrogant and narcissistic.

• Consistency is paramount.

Self-service leaders may also lead via consistence, focus and sustainability. They express the cohesive messages about their leadership essentials and styles. DIY-self-service means open leadership, leaders enjoy sharing ideas, be open to new or creative ideas, always consider the other points of view, participate in and support group or team efforts, and work collaboratively with peers.

That said, self-service leaders eager to learn about self and others, willing to learn from feedback via social platform, also be interested in helping others think and experiment, embrace diversity, multiple sources and points of view,  be resilient and flexible about changes and communicate it clearly.

• Underdog Leaders: Self-service is about using the right language of accountability

 Many underdog talents also face all different kind of career ceilings, self-service is a better practice to use the language of positive self-promotion and accountability, it’s more about promoting fresh concept, updated knowledge, and unique value proposition, to break stereotypical leadership image in 20th century, and standout to be a strong influencer & thought leaders who can make the dent in the universe and advance humanity.

Self-service underdog leaders can build up reputation via open mindset, and relying on healthy discussion & facts and collective wisdom to point the way toward the right conclusion or decision, also become advocate of diversified viewpoint and cultivate more high-potential underdogs. 

2. Self-Organizing Team, Self-Regulated Organization

• Self-Organizing Team Nurtures Creativity:

 In 20th century’s command-control working environment, majority of employees are doing what they’ve been told, compliance is the key to survive; that’s why two third of employees do not feel engaged at work. Now,  the business becomes more dynamic, innovation is the only light every organization is pursuing now, at 21st century, nobody comes to work for being managed reactively, what maters now is creativity, the talents desire to work at the environment where they feel fulfilled and successful. And all talents intend to be self-determining and autonomous.

• Agile –Self-Organizing Team Best Practice

 Self-Organizing team such as Agile/Scrum engineering team focuses on delivering work via culture of “PULL”, such a team well suited to adapt to the rapidly changes and complex business dynamic base on the interconnected actions of competitors, customers, users, and follow three I principles: Incremental, Iterative and Improving, it’s more focus on outside-in, customer viewpoint, instead of traditional top-down, inside-out business hierarchy.

Self-organizing team does not mean chaos, it means to build the cornerstone of self-regulating business, it should encourage transparency, and it won’t happen in darkness, there’s approval needed in big changes, the team secures flexibility and room to act and perform, the practice need reflect the fairness of the holistic performance evaluation, where changes in assumptions can be taken into account.

3. Self-Service Data & Analytics

• Self-Service Data:

 We are not only embracing DIY culture enhanced by the latest technology trends such as CoIT-Consumerization of IT, and Social computing tools, now, we also live at the era of Big Data. The next level of self-service is self service on the data, both for internal and external use. It is about opening data and mastering the data, in order to gain business insight about customers, employees and products/services.

It will be an imperative to be able to do self-service on the data, because modern enterprises need to be much more permeable than they are accustomed to be. Business functions can self-service the data to analyze and capture the means for improving business. Protecting the data appropriately is essential while allowing self-service. So IT will focus on security, availability, and reliability increasingly.

• Self-Service BI and Analytics

 With self-service data, non-technical users with easy-to-use analytics tools can be empowered to generate insights found that proactively responding to constantly changing business need, which is also the predominant reason organizations are sharpening self-service capabilities.

From a macro perspective, it’s easy to identify the biggest long-term trend in business intelligence, the self-service analytics tools are providing more professionals with the better interface, visual capabilities to access, analyze, and share data on their own. Such light-weight analytics tools will encompass a smart business with culture of DIY & analytics. 

DIY, is no long just a acronym or buzzword, it’s the mainstream culture in the future of business. 

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Five Criterias How CIOs Evaluate Vendors

Customer-vendor relationship at modern business is both art and science, complex also critical, but it’s worth the effort to craft such a good long term relationship, especially for IT vendors, how to delight customers takes both aptitude and attitude, how modern CIOs evaluate vendors also takes fair judgement and deep knowledge, here are some collective wisdoms from one of LinkIn discussions, and there're learning lessons for both CIOs and vendors:

1. Golden Rule:

Treat customers' problems as your own, do the best to take care of it;

·       Vendors should share the same vision and direction together with their clients.
       A successful relationship will still be as vibrant in 5 - 10 years as it was during the buying/selling cycle if all parties collaborate and share what they are really trying  At the end of the day,  all parties are trying to achieve the same thing - delivering business value based on their model. These can be mutually beneficial not mutually exclusive. 

·       Solve Customer-Vendor Conflict: The "Silver Bullet Foundation" is full of people who thought they were buying something that was going to fix everything. The "Vendor Presidents Clubs" are filled with many who have achieved selling the silver bullet promise. The people typically foisted with the blame are those charged with the change management and implementation.

·       Two-Way Communication: The successful customer-vendor relationship is for the customer and vendor to understand the problems need be solved via well described methodology and the effective communication vocabulary,  as the speed of change is accelerated, business need well define the requirement and specification clearly, but business dynamic may not allow them to get anything they need when they have them; vendors should make continuous communication & improvement with client;  

·       Knowing how to put together a complete solution that works in the best interest of all related constituencies in the business. Often understanding the dynamic change and growing complexities in supplier agreements comes secondary. First is understanding what is truly needed internally across business, IT, finance, procurement, supplier and contract management, legal, etc.

 2. Best Possible Solution – if it’s not Complete Solution

Everybody talks about customer experience these days, IT vendors are no exception, how to design, not necessary "complete solution", but customer-tailored, best possible solutions, help customers overcome real business obstacles or add value via well-defined KPIs, that's the key to build up win-win situation.

Both Customers & Software vendors have to walk into any major transformation projects with their eyes wide open, fully expecting to apply changes as they move forward - this flexibility has to be part of the transformation strategy

1. The buyer's long term goals are accurately represented internally at the seller.
2.  The seller's capabilities to fulfill said goals are also accurately stated.
3. Other expectations are managed successfully.
4.  The appropriate resources can be quickly marshaled on both sides in the event that something occurs requiring remediation
5. A good IT vendor focus on processes, and there's always opportunity for improvement.
6. "grade" or "range" solutions. by offering a range of solutions, each with different results and budgets and risk profile, vendor can actually help clients surface and resolve their internal conflicts, which can give you a leg up in the selection process 
7. Being a Trust Advisor: The real win-win to this is when you couple the above with the ability to not only understand IT strategy at the buyer but also synthesize that with information gathered elsewhere to identify gaps in the strategy that were overlooked by the client.

 3. Attitude: Under-promise, Over-delivery:

Certainly some vendors will offer best possible solutions if complete solution impossible; It takes the great attitude, the product itself, the professional services to tailor the product to the client’s specific needs, and training to ensure the client and their team have the necessary skills to maintain/enhance the solution as they move forward. Do all vendors do this? Certainly not. Many are simply focused on providing a product they call a solution and then walking away. Some popular symptoms:

·       Over-Selling:  in order to sell, vendors are often presented with a solution which is so to speak "aligned" with customer’s problem. When in fact it wouldn't be. 

·       Under-Delivering: there are too many wants that are unfulfilled - either oversold at the point where they bought the software -- or missing or broken code that should have been there in the first place. Business needs keep evolving, and what we need today may no longer be valid a short time later.

·       Fear: The third problem is the fear, to make a mistake for the customer. Vendors are aware of costs and the risks. And it gets worse when you have a time pressure. And the fear not to be able to sell for the vendor

·       Not Coach Customer Well: Solutions continue to evolve (more releases) but the customer does not get couched in dynamic environments. New customer process changes, technology impacts, economic, and political policy trigger changes in the customers’ environment thus changing the need. At least this is how new releases should be pursued - ever improving upon the value delivered to the customer, and customers need be coached accordingly.

4. Play Trilogy Fairly

The relationship between the vendor and IT is echoed often, it's not always just the IT and vendor that are working towards a solution. The business is usually involved if it is a business application. Thus, its not just the customer-supplier engagement model that impacts but business-IT engagement model. Hence the unholy trilogy tends to be business-IT-vendor,  and quite often the vendor gets away with deal when they have a better alignment to the business than IT. However, that is usually when governance becomes the ultimate critical issue as scope management leads to budget blow out and then ultimately its becomes a $ driven project, it’s the root cause for shadow IT cropping up.

The trilogy also often happens after someone got an approved budget (estimated internally) which then is expected to cover the cost of the vendors’ deliverables. That is something that needs enhancement and requires serious gathering of requirements up front between business and IT for sending out RFQs before going through budget approvals. 

As Vendor, how to manage customer relationship properly, to help smoothen business-IT-vendor trilogy, not the other way around? Strategically speaking, what businesses expect from IT is also about what IT expects from the vendors, it's more about the speed, the scale, the value and the choices; is vendor up to the speed and delivers the values both parties agree on, does vendor provide choices for customers to fulfill the goals; is vendor both accountable when having problems or flexible enough to solve the issues.

5. No Negative Surprise

 With today's mega-integrated solutions and product catalogs, customers encounter holes and gaps of missing, untested, buggy workarounds or are 'stranded' because of requirements for this and that enhancement pack or maintenance upgrade that is additive to the original implementation. Sometime vendor-customer relationship becomes a 'captive' model, due to enormous customer investment and integration, suppliers are focused on acquisitions and integrating them within their product lines and never seem to be able to get the job 'done' before the next one. 

Customers’ other primary concern is the lag between the promise and the delivery. Or "its in the next release" syndrome is just a symptom of unmanaged expectations. Releases need to exist if not just for the sake of innovation and continuous improvement of the software.

Therefore, at today’s business dynamic, implementing new software requires companies to steer away from traditional contracting and focus on digging deep into how leveraging optimization and negotiation processes/methodologies can provide flexibility and protections to ensure that the software meets changing business requirements over the life of the investment.

Do not show customers too many such "surprises"--charging further without notice, increasing pricing without reason, or getting next release without improvement.

Instead of "complete solution", most of businesses will more appreciate Agile solutions, innovative vendors, with good attitude, not just treating customers as cash cow, but as long term partners, help solve business problems more radically, the value proposition between sellers and buyers is in balance. These are the right ways for mature vendors to delight CIO and customers.

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CIO as Producer, API as Lego Blocks

Today’s CIO has many roles, from business strategist to innovative intrepreneur, from technology visionary to talent master, now, we may need add a new one: a producer, not for TV show, but for digital business services, as IT turns to be a platform for co-creation and digital engagement via an agile IT architecture with speed. A recent released API business value report from PWC may help CIOs gain some insight on being a successful producer:

1. Architecture with Speed

 API is the acronym for application programming interface, a technology term that means the specifications for how software programs are able to exchange information with each other even if designed and run by different organizations.

First of all, CIOs should understand that using APIs is an architectural choice, not a technology choice, second, a relatively new style of APIs, called representational state transfer (RESTful) APIs, which is pull-centric, not the traditional push model,  inspires the new architecture and platform thinking, the goal is to architect a collaborative environment for co-creation, it need be part of IT strategy, as it’s high level architectural change, and it takes audacious IT leadership. 

The new architectural principle and programming model based on RESTful APIs reduces integration cost and complexity, so integrations can scale for many internal as well as external uses. Statistics suggests that using [RESTful] APIs reduces development time by 50 to 75 percent. As SOA has largely remained internally focused, RESTful APIs, sharply reduce the cost and complexity of integrations, deliver a scalable approach for both internal and external use, also accumulate less technical debt for every new piece of functionality created.

From a few user case studies, RESTful API interfaces build up the modular capabilities,  create a level of simplicity that didn’t exist previously, and simplicity speeds things up, making integrations cost-effective.

2. Running IT as Software Company

 IT has to adapt to faster business tempo today, CIO leadership must keep a balance in this evolution and manage IT assets in new ways. The advice to CIOs is to approach the evolution in five dimensions:

• Business Strategy & Purpose: Framing a customer-centric enterprise via  digitization is a significant transformation facing many organizations today, from IT perspective, most IT organizations spend way too much time building applications and not focusing on the customers, to quote Drucker: “ the purpose of business is to create a customer”.

• Business Capability Orchestration:  Loosely coupled modular capabilities: means the use of open software interfaces on modular capabilities to allow easy digital connections with other capabilities, internal capabilities and processes are broken into modular service components that have standard open interfaces. Business capabilities and assets inside the enterprise are easily combined with assets and capabilities outside the enterprise.  Loose coupling makes it possible to change the components without affecting the system, as long as the interface is kept stable.

• Developer community management: The ability to co-create in a digital ecosystem—A co-creation strategy treats customers, channel partners, suppliers, and industry ecosystem participants as active agents who have permission to combine the modular capabilities exposed in a platform to create new experiences. Sophisticated enterprises are starting to think more like a software company—as a platform and an ecosystem. This increase in APIs has led to the need for tools and services that help companies create, publish, manage, operate, and analyze APIs.

• CIO as Producer: not producing movies or TV shows, but for producing digital services;  IT don’t have to do all the coding anymore. The key role for IT is to be the owner, producer, and platform of the services. Business units, even third parties, can use the services to develop a new capability. The CIO organization therefore will become an orchestrator of services—across vendor capabilities, published services, and consumed services—a role that the new architecture will need to acknowledge and enable.

• Analytics and reporting:  Analytics helps companies understand and improve the value of their APIs. Value driven analytics gauge API adoption by measuring traffic, purchases, and registrations. With API traffic control tools, companies can define and enforce levels of partner access to data consumption. API analytics tools can also help diagnose performance and scalability issues associated with API platform growth.

 3. SMAC Embraces RESTful APIs

Today’s business leaders are capitalizing and operating on digital ecosystems that are expanding due to the confluence of social networks, mobile computing, analytics, and cloud computing (SMAC). SMAC also provides unprecedented opportunities for enterprises to take advantage of the innovative disruptions.

SMAC represents an acceleration of change that is overwhelming to the current IT approach of owning the end-to-end experience. Today’s methods do not scale to address the challenges that SMAC presents: too many variations in use cases and too many endpoints. In addition to understanding and having strategies for these individual SMAC

technologies, enterprises should look at abstractions that bring together these technologies where they intersect. RESTful APIs have been used as key enabler of such digital connector, creates significant new opportunities for enterprises to transform internally to a digital operating model and to engage externally with the evolving digital ecosystems.

The APIs bring up the reality that there are just too many niches solutions that customers need to be served. No business will be able to do all of the scenarios. In a digital world, an API is a good interface to enable many distribution channels. The best designed APIs are designed for a public audience, in order to get value among the long tail of developers

In conclusion, CIO need craft a good strategy on how the businesses participate in digital channels via taking advantage of APIs, CIOs have many things to experiment these days, they need to know how to integrate services in the cloud. They’ll need to understand how to deploy using APIs, they also need use social/mobile platform to engage customers and employees, analyze Big Data to capture business insight, hopefully APIs are such lego blocks to help shape an Agile social Enterprise.

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Long Live Curiosity: Three Lessons from The Olympic Champion on Mars

Nasa reported the Curiosity had landed on Mars “wheels down” at 10:31 PST August 5, 2012, it’s not only the leapfrog progress for Rocket Science, but also a celebrated advancement for humanity, as some declared, is era of imagination really coming?

What can we learn from curiosity’s landing and her adventure on Mars:

1.    “The Seven Minutes of Terror” to “Seven Minutes of Triumph”

“A Seven minutes of terror” means – once Curiosity hit the Martian atmosphere, it completed a complicated set of maneuvers – including hanging from a rocket-powered “backpack” – successfully in only seven minutes time. A 14-minute communications delay meant it all had to be programmed in advance, with no room for error. Had anything gone even slightly wrong, Curiosity would have smashed into the planet and the $2.5 billion mission would have been a complete failure.

No wonder, rocket science is still one of the most complicated, advance & adventurous disciplines, well combination of hard science with deep courage, to turn around “seven minutes of terror” to “Seven minutes of triumph”.

2.    “Lucky Peanut” –Rocket Scientists’ humbleness and humor

As bright as rocket scientists, when watching the video, we saw them to share peanut for good luck during the landing controlling hour, we perceived the humbleness and humor: Opportunity brings risk, a success takes 99% of perspiration, but still need add 1% of luck, to accomplish such a curiosity’s journey, as human, we may just need dream big, but feel humbled at the same time.

Risk taking is required, as is pursuing curiosity. Respecting and exploring nature will take both ambition and humility, discipline and adventure should go hand in hand,

3. Life Signs on Mars –Discover Humanity in Universe

Because the Gale crater exposes several layers of Martian strata to the surface, part of Curiosity‘s mission is to look for signs of that microbial life either exists or once existed on Mars. Curiosity will go up to different outcrops and different soil types and sample them. Dig in, pick something up and analyze it. And the instruments themselves are much more sophisticated than previous examples.

That said, Curiosity is fulfilling all of our curiosities, to discover humanity in universe. 

It takes collective wisdom and collaborate effort to explore space, and demystify many puzzles facing universal humanity today.

Welcome to the era of Imagination! Good Luck & Long Live, Curiosity!

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Three Big Insights from Big Data

Modern businesses all need learn how to swim at the sea of big data, to ride the wave, or avoid obstacles, after being through 5 Ws + 1H Big Data Navigation, some Olympic level data champions may gain the insights others can not perceive: 

 1. Customer Insight

• Know What Customers Need Before They know Themselves

Big Data allows businesses to see customers’ behavior pattern they have never seen before, it also uncovers the interdependence and connections that will lead to a new way of doing business, or engaging customers’ feedback, do sentimental analysis or research on knowing what customers need before they even know themselves, and develop next generation of product, service or business model accordingly.

• Optimize Customer Experience Life Cycle

Big Data also lets us see the “real-time” cause and effect of business’s actions and customers’ responses, Organizations that do so will be able to monitor customer behaviors and market conditions with greater certainty, and react with speed and effectiveness to differentiate from their competition. It will lead service innovation which can optimize customer experience life cycle based on personalization, targeted interactions & preferences and 360 degree view of customers, ultimately increasing customer loyalty by following 3 “I”s: Insight, Interaction, and improvement. 

2. Decision Making Insight

  

• Operational Excellence: Businesses explore the power of big or small data to drive business decisions to create transparency in organizational activities that can be used to increase efficiency. Big Data analytics also improves the quality of business decision-making requiring organizations to adopt new and more effective methods to obtain the most meaningful results from the data that generate value.

• Business Governance & Risk Management: Big Data can also help business to predict or detect fraud or bad behavior, breakdown functional silos to manage data more holistically, to converge IT governance with business governance, and enforce GRC discipline.

3. Talent Insight

• Make sure the right talent at the Bus: It will always take  long term journey for identifying, attracting, developing and retaining the right people with the right capabilities at the right position,  via Big Data, talent manager can recognize thought leaders, social influencers or domain expert more easily; data analysis of employee and talent performances also allow experiments and feedbacks, make sure right talent at the bus at the right time;

• From Talent Controller to Talent Multiplier: Talent managers start using data not just to monitor employees’ behavior, but to ask& answer some hard questions that are at the heart of how employees contribute to business performance, predict employee preferences and behaviors and tailor next practices to attract and retain talent. Develop predictive models and identify leading indicators to forecast business requirements and staffing requirements, track skills and performance, and maximize human capital investment.

  

Big Data is Big part of “the Internet of Things”, human and machine analysis of large data sets will also provide big insight beyond commercial value, it will have broad touch including social, political and economic intelligence, and has huge positive impact for society at many perspectives in the futre.

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Insourcing vs. Outsourcing: Five Principles to Define IT Sourcing Strategy

One of LinkedIn CIO discussions about the survey: "outsourcing takes big turn back in last two years and insourcing increased 35%. What are you seeing?” spur many quality comments about IT sourcing strategy, the other IT survey also shows: now most of customers, large or small, prefer to have more flexibility, do not like to tie into multi-year contract, on the other side, vendors may attract customers to mega-deal via pricing discount., etc. 

The world becomes more complex, change is accelerated, the present shift to insourcing those functions once again is an indicator that organizations are realizing they need greater flexibility and agility, which is a little more difficult to achieve when functions are outsourced.. Bsiness and IT also have more sourcing choices than ever, insourcing, outsourcing, on shore, near shore, off shore, and public/hybrid/private cloud sourcing, with all these, how to craft a good IT sourcing strategy?

1. IT Sourcing is Critical Element of Business/IT Strategy

IT sourcing is crucial for IT strategy –to decide what kind of IT organization you need become and climb IT maturity,  IT strategy is integral part of business strategy, that’s why IT sourcing will directly impact business’s strategy, innovation and vendor relationship for long term:

• Business/IT Strategy: Business strategy is about diagnosing business problems, making a set of choices, following the guideline to take actions in order to compete for the future. IT as business enablers, is the means to the end, not the end, the end should be business agility, elasticity, flexibility and resilience. Many of times, business can’t articulate what they need, so centralized IT should collaborate with business to become value center. IT also need categorize its services into competitive necessities and competitive uniqueness, differentiate core from chore, focus on value delivery, taking continuous journey on consolidation, rationalization, integration, modernization and optimization via leveraging effective IT sourcing solutions.

• Culture of Innovation:  Fully outsourcing IT services may present a challenge to creating a culture of innovation, achieving speed to market, and providing superior customer service/quality for companies in a dynamic and competitive market within the context of emerging mobile, social, and cloud computing technologies.

• Vendor Evaluation/ Relationship Management: Sourcing can no long just consider cost, it's also about evaluating vendor's innovation capability, leverage expertise, add alternative brainpower & talent pool, and appreciate "take extra mile" attitude, to build up solid partner relationship for long term. First of all, business & IT need understand how to create value proposition in innovative service/products, customer experience and operational excellence, in which internal IT can do great job to orchestrate business capabilities; then IT may leverage vendors' strength, to complement the skills and strength. Also take consideration of vendor's soft competency such as take extra miles attitude, innovation capability and niche point, etc
       

2. You Can’t Outsourcing What you Don’t Understand

 Outsourcing and offshoring were never silver bullets for process inefficiencies or bad organizational design. There was too much of "my mess for less". Add in the cultural and communication issues,  the turnover and cost inflation in available resource pools, there was always going to be a point at which the reality overcame the theory.  The business also should no longer talk about outsource jobs to take political pressure, they are looking at both technical value and BUSINESS value a provider can put on the table of long term strategy.

That said,  first, business may still need "shoot the tangle, in order to see from different angle" internally, then make systematic decisions on your sourcing strategy/solutions, both methods have their place. Organizations need to take a hard look at what they are trying to achieve and determine which method works best, as insourcing vs.outsourcing vs. offshoring success depends on objective why it is done and what is required to be:

• Insourcing is better for critical Domain Knowledge centric activities; business innovation driven project, to create competitive uniqueness for business growth.

• Outsourcing is better if niche knowledge requirement for specific duration, repeatable transaction based, freeing internal resources for more value added area, and flexibility of Ramp-up and Ramp-down; 
       
• Nearshoring/Offshoring: could be where there is a large knowledge pool available,  budgets are very tight while a demand for services remains high, follow the sun model, taking advantage of 24 hour clock and lower cost as added benefit,  tap into a global talent pool or the right "local" partners to expand.

• Cloud Sourcing: The latest trend provides business more choices via vary of flavors : public, private and hybrid Cloud, SAAS/PAAS/IAAS/BPAAS,  to help customer leverage IT value, running IT as business, Cloud also provides better agility and elasticity via faster provisioning, Opex service model. 

3. SLA & KPIs Driven Hybrid Model

After being through decade long of outsourcing, it reaches the point where the private and public sectors are finally realizing that outsourcing is not as "simple" as they originally thought. When done right, yes, it can have benefits, but it requires hard work to manage and ensure that it is done correctly. You can’t manage what you don’t measure. 

The environment has become so competitive that SLAs/KPIs are continuously being driven up, thus, driving the costs higher that, in many cases, the cost-saving potentials are being watered down and questioned. And it still makes sense to find a sourcing partner for the necessary activities of a business that are not core to how you go to market and make money, no matter where you choose to have the work done. Balancing cost, quality and location in a 24 x 7 world isn't easy - we need all the sourcing strategies and options we can find to make this work effectively, especially with the quality going down and costs going up in the outsourcing model.

The outsourcing pitfall may also include miscommunication: the companies give lip service to "yes, we'll support increased communication and increased touch points", but most of the time they don't adjust project timelines and they treat their offshore counterparts as if they were just down the street. Then, they can't understand why the project is behind

The other problem is most companies swing to one extreme or another. There should be an optimum multi-sourcing strategy that is based on TCO and the total value.

 4.  Don’t Forget Hidden Cost or Shade of Grey 

A valid analysis lies in examining the motives and objectives that drove the outsourcing strategies of those companies in the first place.

• Pay Cost later without careful analysis: Some companies follow the trend to offshore, without fully consideration about service levels, support, customer service and focus solely on the cost, until they realize that the hidden cost is that all of those things you give up, cost you time, efficiency, agility, frustration, retention.

• Investigate beyond the Surface: The other angle to evaluate vendor and sourcing strategy is about investigating "hidden cost" or grey area, some reasonable, some not, and customers surely dislike to see such surprise too frequently, that said, selecting vendors or solutions, not only look at the surface, dig through and understand the pros and cons more objectively

 

5. Cloud Sourcing –Emerging Trend

Though outsourcing training is slowing, businesses now have more choices to fly in the cloud, the emergence of Cloud computing also provides business more choices to manage IT, particularly, as cloud has vary of flavors : public, private and hybrid to help customer leverage IT value, running IT as business, and focus on innovation & core activity, with the ability of IT department leadership to inspire the work force and increase the quality of the final product or service, Cloud also provide alternatives for faster provision, transform CapEx to Opex, to improve business’s cash flow.  

Flexibility and the ability to be drive radical business changes in pursuit of competitive advantage will define successful businesses in the future. The constant shift in corporate preference for sourcing models merely indicates that few have the right blend, and perhaps more importantly, the technology provision is increasingly perceived as a constraint to growth.

Companies need become more creative with their sourcing models and not committing 100% to outsourcing or insourcing. Outsourcing, whose effectiveness is predicated on operational excellence to provide the low costs, is the antithesis of agile changes and unique approaches required to keep up with the IT implications of business innovation.

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