By: Clive Longbottom, Head of Research, Quocirca
Published: 14th September 2012
Copyright Quocirca © 2012
If cloud computing manages to evolve to where it should do, the end result for organisations is a mixed environment of internal and external IT platforms that stretch beyond their direct control into the value chain of suppliers and customers, and beyond to others providing services along a complex business-to-business (B2B) chain.
Historically, organisations have been able to exert a level of control through ownership of the IT stack from hardware through operating systems to applications, and have been able to ring-fence their systems through identifying where the responsibilities of their organisation ended, generally at a point defined by the use of a firewall.
However, more innovative organisations have found that, to be able to be more competitive in their markets, they need to be able to exchange information in a more dynamic and open manner across these extended value chains. However, such information flows still have to be secure and auditable – and this is where even the most innovative organisations begin to struggle.
In the B2B space, there have been certain players who have provided services for many years – vendors such as GXS and Sterling Commerce (now part of IBM) – that have provided managed services where data from one organisation could be transferred to another, anywhere on the plant, maintaining data fidelity and providing full auditability of what had been sent, at what time to which organisation. Little did these vendors know that they were doing cloud computing years before the term came into common parlance.
As time went on, extra capabilities were added to their services – for example, the capability for catalogues of goods to be hosted and managed; dealing with the needs for paperwork to be created and made available for the physical transfer of goods across geographic borders; creating and managing auctions and reverse auctions of goods across a broad group of possible customers. The broader adoption of solid internet standards has made the reach of such vendors more inclusive – small and medium businesses (SMBs) do not need to install expensive software on their premises, they can just use web-based portals to participate in dealing with their customers and suppliers for the various requests for “X” (requests for information (RFIs), proposals (RFPs), quotes (RFQs), etc.), as well as catalogues, legal paperwork, straight-through order processing and so on. This all enables them to operate as true peers against their larger competitors in highly stressed markets.
However, is there still more that can be provided?
Certainly. The advent of cloud services is changing the way technology can be provisioned. As the take up of Infrastructure, platform and software as a service (I/P/SaaS) services increases, organisations will have less need to worry about the hardware their applications run on and they will not have to feel so constrained by what they already have in place when looking to bring in new functionality to support their needs. This starts to drive organisations toward a more “functional” view of technology – out go the large, monolithic enterprise applications that we have all grown up with; in comes the “composite” application, built up from technical services as needed to meet the needs of a specific business process.
This requires some form of cloud service provider that can act as a broker to take responsibility for managing the catalogue of technical services available to an organisation, and to provide the integration services which can bring these together on the fly in a manner that provides support not just for the single organisation’s process needs, but also to enable high-fidelity information and data exchange processes throughout the value chain. In Quocirca’s view, this will be best managed by those who already have a great deal of demonstrable domain expertise in dealing with highly mixed environments – and the B2B managed services vendors fit the bill nicely.
Quocirca recommends that organisations reviewing how they manage their B2B interactions look towards a managed service that provides highly managed and audited exchanges of information in any form required by a mix of senders and receivers. When selecting a provider, it will be well worth considering how well they will be able to support your organisation in the coming years. Here, make sure the right questions are asked as to what extra services such a provider will expect to provide itself as time progresses – and how it proposes to manage the use of external services that impinge on its own services.
If the vendor can show a clear roadmap that includes the embracing and integration of external services, then all well and good. If not, Quocirca’s recommendation would be to look elsewhere.
Quocirca’s report, “Maintaining the chain”, written in conjunction with GXS, is freely available here.
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