Last December, I published three things I'd tell your CIO. Since then, I've spent time with dozens and dozens of sourcing and vendor management professionals, CIOs, and leaders of application development and delivery, including last week's Paris Forrester Forums. Most days, I share our ongoing research on what impact today's software-fueled, consumer-led digital disruption has on your ability to meet and exceed the expectations of your customers and the employees serving them. For some folks, software and software development remains a commodity. But for many, the need to deliver great software has taken hold of 2013 planning discussions. With July just around the corner, and as you start 2013 planning, focus on what you need to start delivering great software (remember, software is your business), and keep these three things I'd tell you and your CIO in mind:
- Embrace the cloud and more aggressively invest in your business' differentiation. Our most recent Forrsights Software Survey, Q4 2011 identifies that 38% of North American and European software decision-makers will increase SaaS spending by more than 5%. While most justify SaaS as a way to save money, increasingly we're seeing leaders make an important justification – shifting resources and capital to more strategic and differentiating projects. Just last week, four European IT leaders shared how they plan to move off on-premises ERP to cloud-based ERP offerings, freeing up millions in expense and capital that they will then deploy to analytics or digital experience projects. Each viewed SaaS as an opportunity to reallocate resources – including skilled project leaders, solution architects, and development teams – to projects helping their firm establish needed differentiation. Start planning your own future by reading our business applications future look research by Jost Hoppermann, Paul Hamerman, and George Lawrie.
- Revisit and restructure application outsourcing relationships to give you additional agility. We're witnessing a big shift in application outsourcing. Ever-increasing adoption and scaling of Agile creates friction between project teams that want to work iteratively and your ecosystem of contract-driven outsourcing partners and integrators. Take direction from Stephanie Moore's research on navigating the changing IT services landscape and shake up your contractual relationships. First, recognize that one size doesn't fit all. Introduce managed outcomes for your more commodity application and process areas (such as back-office support) where you have less interest in how it gets done so long as it gets done and gets done well – preferably using cloud. Make staff augmentation your de facto model for digital experience needs, and make sure partners (new and existing) have demonstrable Agile and open Web experience. Agile is de rigueur for digital experience initiatives; your customer experience stakeholders expect it.
- Plan on a new digital reference architecture. Engagement's your new mandate, especially for your multichannel, multitouchpoint software projects supporting your customers and the employees serving them. Delivery tiers focusing largely on publishing or transaction support need an overhaul – putting a mobile "wrapper" around them is, well, lipstick on a pig. Engagement requires contextual delivery of information and transactions – e.g., relevant to your location, the task at hand, and your history with the store, branch, or contact center. Delivering engagement with all that context will require substantial analytics and "big data" horsepower. Plan on deploying it upon an expanding set of marketing, content management, contact center, and CRM technologies. Designing and delivering to this new reference architecture will look less daunting if you can make progress on points 1 & 2.
What it means: Your firm's most important stakeholders – its customers and the employees serving them – demand that you start developing a software competency. True, your business has many commodity functions and business processes, and your own application portfolio needs to reflect them as such – commodity areas that can be satisfied with commodity solutions. For the areas where your business seeks true differentiation and innovation, make software your business.
Our research continues to expand and deepen to inspire you and help you make decisions on making software your business, delivering engaging digital experiences, and reshaping your development and delivery organizations. I invite you to join us in October, both in Orlando and London, to engage with our analysts, hear from industry experts, and meet with your peers to learn how to plan to thrive in this age of software-fueled digital disruption.