Embracing Everything-as-a-Service in IT
Reworking IT and business capabilities as a collection of services that can be used inside and outside the organization can enable companies to increase efficiency, cut costs, and take advantage of new opportunities in a dynamic marketplace.
The pace of technological innovation continues to accelerate, offering ripe opportunities to rewire the way companies work, engage their customers and business partners, and compete. New digital products and offerings, along with powerful forces such as analytics, social media, and mobile, are giving rise to business models built around intuitive experiences and grounded in underlying mission-critical data, transactions, and systems.
In many cases, however, legacy systems and processes are unable to support such innovations and the strategies they drive. Years of customizations, workarounds, and deferred upgrades rendered many core assets inflexible, costly, and unpredictable. Some CIOs have already begun upgrading systems and building new architectures that are more efficient, effective, and reliable. Today, a new business imperative is gaining traction in boardrooms and IT shops alike—one that takes a more comprehensive approach to reworking the core as a set of customer-focused, outcome-driven building blocks that can support the business into the digital age and beyond.
Everything-as-a-service (XaaS) is a strategic and operational blueprint that will likely begin upending business and operational models and redefining modernization of the core within the next 18 to 24 months. XaaS envisions business capabilities, products, and processes not as discrete vertical offerings operating in silos but as a collection of horizontal services that can be accessed and leveraged across boundaries. With some technical upgrades and strategically deployed APIs, for example, the customer service module in an ERP system once used exclusively to support external customers could be leveraged by other departments—IT for help-desk queries, HR for employees, and logistics for vendor support.
For CIOs, XaaS offers a new way to justify essential, if decidedly unglamorous, investments to the board. While IT leaders know that addressing legacy system reliability, security, and scalability is important, those holding the purse strings often view core revitalization as costly plumbing upgrades. XaaS casts system modernization in a new light. What was primarily a technical process becomes a broader business effort to enable efficiencies and engage customers, employees, and business partners in new ways. The transition from systems to services is a complex challenge, but one that can transform IT into a platform for business innovation and growth.
New customer demands and expectations launched the XaaS movement. Call it the Uber effect: Individual consumers and companies alike have embraced a consumption model that limits friction and closes the gap between desire and satisfaction. Ride-sharing services offer transportation as a service, making it possible for individuals to get from point A to point B quickly, efficiently, and without the operational expense of owning a car. The model is now being applied to meet consumer demands ranging from lawn care to transportation on private jets.
The model can also be applied to enterprise IT.
