How Have Recent Technology Developments and Transformations In the Enterprise Web Applications Space Affected Your Business Environment?
Sanjay Patel is a seasoned transformation leader with over 18 years of industry expertise in consumer products. He is currently SVP and Group CIO at Tate & Lyle, having been VP Strategic Transformation for two years leading a multi-year, multi-function, multi-initiative, company-wide operating model transformation to embed the new corporate strategy and driving a zero-based budgeting initiative across the enterprise. Sanjay was previously an executive in business consulting with IBM (he joined as part of the PwC acquisition), most recently leading the UK consumer products business. He alsolived and worked in Switzerland for several years, managing the relationship and running transformational changes for IBM’s largest clients. Sanjay has a Master’s degree in Chemical Engineering and began consulting in 1995 after eight years in the chemical manufacturing industry. He is married with two children and lives in Richmond, London.
In light of your experience, what are the major trends that you see in the enterprise web applications landscape?
Having worked on technology-enabled transformation for over 20 years, I have seen many companies, yearn for wall-to-wall ERP solutions to automate their business processes, enable productivity and commonality, and free up scarce human resources to focus on more value- adding activities. However, over time, as ERP solutions have proven to be time, resource and management attention consuming, as well asincapable of being ‘fit for purpose’, these same companies often question whether their ‘wall-to-wall ERP’ strategy should be supplemented by ‘best of breed’. This has been fuelled by significant developments in web applications, where cloud-based solutions for critical areas such as sales, HR, procurement and non-financial processes have advanced to an extent that time to value, user experience and ease of implementation trump the advantages of an integrated ERP. As adoption of these web applications has expanded and as they expand into other technology spaces, such as data management and transformation, reporting and analytics and cyber and infrastructure management, CIOs and business leaders have acclimatised to a heterogeneous landscape and accepted the inevitable consequences of integration and changes in licensing costs. The impact on the move to cloud-based infrastructure, increased opex licensing costs and reduction in retained development resources has not been insignificant and one that many have struggled to cope with as the technology P&L has transformed.
Embracing new innovations in enterprise web applications can drive faster time to value and demonstrate IT agility like never before, but integration and managing increasing opex are new challenges for CIOs
To cope with this shift, many IT functions have learned and leveraged best practices along the way, introducing new capabilities such as design thinking, user experience, Agile, DevOps, Scrum ways of working and cloud first, providing IT professionals and native cloud employees with plenty of career growth and opportunities. The impact on the business landscape has overall been positive, in my opinion – driving better user experience and adoption, faster time to value and reduced change impact. At the same time, the challenges are not insignificant. It has also meant that ERP vendors have had to respond with home-grown web applications or acquisitions and partnerships, most opting for an ecosystem approach combining the two. This has increased the choice for technology and business leaders.
What are the significant challenges that enterprises face in terms of enterprise web applications?
In my experience, to embrace the advantages that enterprise web applications bring, a number of challenges and opportunities need to be addressed. Firstly, maintaining or growing the capabilities of IT employees: attracting and retaining talent, having the right diversity of talent and maintaining the right mix of people with legacy and new technology knowledge is critical. Furthermore, gaining expertise in the business (being able to translate a business painpoint or opportunity into a technology solution)is also emerging as a substantial need. Next, heterogeneous landscapes require increased integration capability and adoption of newer technologies. This is not always easy and often means companies have to embrace complexity, while IT functions have to establish new architecture and infrastructure capabilities. Additionally, the funding models and architecture of web applications mean that IT capex is often replaced by IT opex. Depreciation of physical, on-premise assets is also replaced by capitalisation of license fees ahead of adoption and increased opex charges year on year for cloud applications. This requires CFO and C-suite education. Lastly, with increased innovation in web applications and the move to enterprise web application solutions, IT procurement functions and CIOs have to adopt a different approach to vendor management, supplier partnerships and third-party governance. Specifically, as core capabilities and value-generating activities move to cloud solutions, technology functions have to treat cloud providers as an extension of the IT function and treat them as they would employees.
In the past, this change in approach towards web applications was a considerable concern for almost all CIOs who came from technical backgrounds. But today, CIOs have much more business acumen and have learned to partner with all functions. CIOs are responsible for keeping their organisation ahead of the curve by aligning well with new technological innovations, meaning that leading and challenging business executives and board members to leverage emerging trends has become a core part of a CIO’s role.