Message from the editor

Image: Paul Horowitz, Partner, Technology Solutions LeaderEvery four years, the Olympic competition in the decathlon crowns what many call the “world’s best athlete.” For many of us in this day and age of highly paid single-sport athletes, the basis for calling the winner of the decathlon the best athlete has been lost. But consider the challenge decathletes face.

They must have the strength for events such as the shot put, discus, and javelin, while being flexible enough for the high jump and pole vault. They must have sufficient power in their legs to excel in the 100-meter dash and the 110-meter hurdles without the muscle mass in their legs (and upper body) destroying their chances in the 400-meter and 1500-meter races. In short, they cannot train their bodies to be absolutely the most efficient for any one event. They have to find a way to optimize for all events simultaneously to be effective overall. And they face a never-ending conundrum of tradeoffs during their training. In many ways, the best description of the winner of the Olympic decathlon is the world’s most agile athlete.

Today’s enterprises increasingly face business and economic challenges that result in conundrums similar to those facing decathletes. In a stable world of infrequent change, the pursuit of absolute efficiencies has no downside. In a rapidly changing world, management needs a new model for enterprise optimization. Management must engage with the conundrum between efficient operations and strategic flexibility.

In the last two issues of the Technology Forecast, we examined how agility is the deliberate combination of standardization and flexibility that prepares a company for change and allows it to proactively shift course with minimal disruption. We also explained the importance of developing a business agility model for anticipating market changes and their impact on
existing operations.

This issue of the Technology Forecast explores the future of enterprise applications and their role in creating a foundation for agility in an era of accelerating change. The first article describes how the gap between strategy and operations is a significant barrier to the pursuit of agility. It examines a quandary for management: every investment in standardizing for efficient operations comes at the cost of adaptability in the face of change. This creates an even bigger divide between a rapidly changing strategic planning process and the way the enterprise actually operates with each new application. That’s because today’s enterprise applications are great at managing and tracking transactions, but not so good at managing the business. We offer a rationale for extending the capabilities of enterprise applications further into management of the business and to bridge the gap between strategy and operations. This will allow enterprises to operationalize agility by creating an enduring and responsive connection between strategy and operations.

The second article describes the technological requirements of a new generation of enterprise applications focused on closing the strategy-operations gap. These business management applications will define one part of an emerging three-layer environment that enables agility. The operational applications layer focuses on efficiencies and enforcing standards in process and structured data. The emerging business management applications layer focuses on flexibility and offers analysis, modeling, collaboration, and decision support for evolving strategy and policy. The interaction between the two types of applications is enabled by an information mediation layer that reconciles semantic differences and creates an enduring and responsive operational connection between the two.

This issue concludes with two examples that illustrate the three-layer environment and the emerging business management applications. Each example highlights the advanced capabilities the specific application demonstrates that are representative of business management applications.
These emerging business management applications and a supporting information mediation capability can bridge the gap between strategic intent and operational reality. Doing so will deliver significant competitive advantage in the pursuit of higher performance, agile strategies, and agile behavior.

During our research, we spoke with industry leaders at application providers E2open, Oracle, SAP, and Workday. These companies operate in different areas of the enterprise software industry, and each in its own way arms its customers with an agile and responsive approach to business demands. Jonathan Becher of SAP Business Objects emphasized the need for applications to shift focus toward effectiveness to complement efficiency by extending support to management functions and processes. Andrew Salzman, Rich Becks, and Rob Schoenthaler of E2open shared how mediating with an information hub allows them to create agility for their customers in their supply networks. Edward Abbo of Oracle explained how a new layer of abstraction above applications that supports process modeling and semantic matching can deliver on the promise of agility. Stan Swete of Workday noted how agility is enabled by decoupling data semantics as used in applications from data storage in relational databases.

Please visit pwc.com/techforecast to find these articles and other issues of the Technology Forecast. If you would like to receive future issues of the Technology Forecast as a PDF attachment in your e-mail box, you can sign up at pwc.com/techforecast/subscribe.

Paul Horowitz
Paul Horowitz
Principal
Technology Leader