hype or reality: will enterprise systems as a service become an organizing …
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Hype or Reality: Will Enterprise Systems as a Service become an Organizing Vision for Enterprise Cloud Computing in Denmark?
Professor Charles Møller Center for Industrial Production Aalborg University, Denmark
CERES Mission Statement
• The purpose of CERES
Researcher and practitioners
forming a joint academy to
create, explore and disseminate
knowledge on the analysis,
design and management of
integrated enterprise systems
• The origin of CERES
Ceres was the Roman goddess
of agriculture, grain, and the
love a mother bears for her
child
Vision: Harvesting the benefits
2
Center for Education and Research
in Enterprise Systems - C E R E S
Hype or Reality: Will Enterprise Systems as a Service become an
Organizing Vision for Enterprise Cloud Computing in Denmark?
• Co-Authors Per Svejvig, Aarhus University
Torben Storgaard, HerbertNathan & Co
• Agenda Introduction to the Study
Cloud Computing and Enterprise Systems as a Service
ESaaS in a Danish Contect
Perspectives
Conclusions
3 © Charles Møller
“The cloud is mostly hot air”
Henrik Amsinck, CIO LEGO
Cloud Computing has Reached the Trough of Disillusionment
Larry Ellison, the CEO of Oracle (2008)
• The interesting thing about cloud computing is that we’ve redefined cloud computing to include everything that we already do.
• I can’t think of anything that isn’t cloud computing with all of these announcements.
• The computer industry is the only industry that is more fashion-driven than women’s fashion.
• Maybe I’m an idiot, but I have no idea what anyone is talking about. What is it? It’s complete gibberish. It’s insane.
• When is this idiocy going to stop?
Cloud Computing According to NIST
• Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction
NIST (2011)
Cloud Computing has Many Faces
Enterprise Systems as a Service (ESaaS) in Denmark
• Database
HerbertNathan & Co. (HNCO)
Top 1000 companies in DK (1150 entries)
• Results
Zero cloud related entries (2011 and 2012)
Now entries are beginning to emerge…
• Validation
Vendors (Salesforce.com and Oracle CRM On Demand)
50 references
• Ad Hoc Search
Several ESaaS were identified
Corners of the systems landscape
Experiences?
Svejvig, Storgaard, Møller, 2012
Experiences with ESaaS in Denmark
• DSV
Large logistics provider
Early adaptor
Salesforce, Memnon and D&B
Nothing new
• YouSee
Part of TDC
Largest telecommunication provider in DK
Salesforce
Integration
• Aarhus Municipalities
Shared framework for all Danish municipalities
SAP solution (Opus) developed by former IT organization
Implementation
9 © Charles Møller
Institutional production of organizing visions
10 © Charles Møller
Swanson and Ramiller
(1997)
Findings on Organizing Vision
11 © Charles Møller
Institutional
forces
Global Context Local Context
Community
discourse
Cloud computing has been
named by Gartner “as the number
one priority for CIOs in 2011”
[3]
Gartner position cloud computing
at the “peak of inflated
expectations” at the Gartner
Hype Cycle predicting 2 to 5
years to mainstream adoption [4]
Aberdeen survey and Panorama
Consulting Group report shows a
big jump in interest in ESaaS /
SaaS [11, 12]
Amazon had an outage of their
cloud services lasting for several
days and affecting a large
number of customers [9]. This
case received very much press
coverage and it would be natural
to expect it to have a negative
impact on the perception of cloud
computing
The global discourse are part of
the local Danish discourse, but
local stories does also shape the
local context
Denmark has a lot of small and
medium sized organizations
(SME’s) which are expected to
be more willing to adapt ESaaS
[8]. That might fertilize the
ground for faster adoption of
ESaaS
The Local Government Denmark
(LGDK) tried to implement a
driving license booking system
based on Microsoft’s Azure
PaaS, but ran into technical and
juridical problems [24]. The legal
issue was more serious as LGDK
(and the municipalities) was
accused to break the act on
processing of personal data,
especially about location of data
[25]
The CIO from “The LEGO
Group” stated in news media that
“cloud is mostly hot air”. Cloud
can only deliver a small fraction
of the services that LEGO need
LEGO are using cloud to specific
point solutions but “[t]o put our
enterprise-platform on the public
cloud is Utopia” [26]
Community
structure and
commerce
Computer press, newspaper
articles, white papers, websites,
technology vendors, consultants,
industry analysts, IT
management books, trade
publications, trade shows etc.
There is no big difference in
the community structure at global
and local level
Business
problematic
Cloud computing is on
everybody’s lips today and is
promoted as a silver bullet for
solving several of the past
problems with IT by offering pay
per use, rapid elasticity, on
demand self service, simple
scalable services and (perhaps)
multi-tenancy [1]
Cloud computing is
furthermore marketed as a cost
saving strategy appealing well to
the post financial crisis situation
for many organizations with
cloud’s “Opex over Capex story
and ability to buy small and, if it
works, to go big” [2]
The business problematic is
the same at the global and local
level
However as Denmark has a
lot of small and medium sized
companies the business
conditions might be different,
and the arguments in favor of
cloud computing and ESaaS /
SaaS might be more prevailing
...
Conclusions and Perspective
• Conclusions Will Enterprise Systems as a
Service become an Organizing Vision for Enterprise Cloud Computing in Denmark? Pro
The OV discourse in DK is very intense and aligned with global discourse
Cons Mainly driven by vendors
Business see no use
Experiences show no specific value in CC
The conception of CC in ES is weak and needs more research
• Perspectives
Do we really need a specific
conception for cloud
computing within
Enterprise Systems?
Do we need to provide an
additional abstration level:
”Business Processes as a
Service”
Completely different
challenges
12 © Charles Møller
Five Critical ERP Cloud Challenges
Cloud Computing impact on Enterprise Architecture?
Collaboration in the Cloud?
Performance of Service Oriented Architecture?
Maturity of On Demand Solutions?
Security of Enterprise Data in the Cloud?
Cloud Computing impact on Enterprise Architecture?
• How will ESaaS impact Enterprise Architecture Maturity?
• What will Enterprise Architecture maturity requirements for ESaaS be?
• Is ESaaS a game changer?
Stage 1: Application Silo
Stage 2: Standardized Technology
Stage 3: Rationalized Data
Stage 4: Modular Business
Source: Ross, 2003
Learning Requirements for the Five Architectural Stages
Source: Ross et al., 2006
Business
Silos
Standardized
Technology
Optimized
Core
Business
Modularity
Dynamic
Venturing
IT capability Local IT
applications
Shared technical
platforms
Companywide
standardized processes or
databases
Plug-and-play
business
process modules
Seamless
merging with
partners’
systems
Business
objectives
ROI of local
business initiatives
Reduced IT cost Cost and quality of
business operations
Speed to market;
strategic agility
ROI of new
business
ventures
Key
management
capability
Technology-
enabled change
management
Design and update of
standards; funding
shared services
Core enterprise process
definition and
measurement
Management of
reusable
business
processes
Create self-
contained
business
components
Who defines
applications
Local business
leaders
IT and business unit
leaders
Senior management and
process leaders
IT, business, and
industry leaders
IT, business, and
industry leaders
and partners
Key IT
governance
issues
Measuring and
communicating
value
Establishing
local/regional/global
responsibilities
Aligning project priorities
with architecture
objectives
Defining,
sourcing, and
funding business
modules
Joint venture
governance
Strategic
implications
Local/functional
optimization
IT efficiency Business/operational
efficiency
Strategic agility Organic
reconfiguration
Collaboration in the Cloud?
• Will mobile solutions
circumvent enterprise
systems?
• Are organizations ready for
collaboration in the cloud?
Death of Google Wave!
• Are we able to deal with the
complexity of multi-
sourcing?
Performance of Service Oriented Architecture?
• ESaaS require integrations and a
service oriented architecture
(Vouk, 2008)
• Is the performance sufficient for
mission critical applications?
• Are we able to deal with the
complexity or are we reinventing
the application silos?
Security of Enterprise Data in the Cloud?
• Do we have sufficient
governance and security
for ESaaS?
The illusion of on-premise
security
• Are we able to deal with
the complexity of
decentralized data?
Person Data Legislation
Maturity of On Demand Solutions?
• Are the available on demand
solutions on a sufficient
maturity level?
Major ES vendors
Methodologies to reflect
ESaaS?
• Are we able to deal with the
complexity of distributed
immature technology?
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