July 26, 2013
For the past ten years, the major IT initiative within Chinese organizations has been service oriented and/or process driven architecture. The pace of change has been slow for two reasons: 1) From an end user perspective, related business requirements are not clear or of high priority; 2) more importantly, solutions providers have not been ready to embrace technology innovation and meet emerging technology requirements through new business models.
Times are changing. IBM and other major ISV/SI in China (as well as end users) are driving momentum around emerging technology, such as cloud and enterprise mobility. I recently attended the IBM Technical Summit 2013 in Beijing from July 11 to 12. Here’s what I learned:
- Telecom carriers supported by technology vendors will accelerate cloud adoption by SME. Contributing to more than 60% of total GDP in China, small and medium enterprises (SMEs) have always sought to simplify their IT operation as much as possible, and at the same time scale it up when business expands as quickly as possible. IaaS solutions appear to be a perfect match for SMEs; however IT professionals have concerns about the security and data privacy over the operations by other companies.
Now with support from IBM and other vendors, China Mobile has established Northwestern SME Cloud in 8 months and the provisioned services cover all major business applications, such as CRM, finance, etc. Attributed to the brand name of China Mobile as well as support and funding from government, within 2 months of going live, more than 100 companies have adopted the solution, and the number of named users on the platform has reached 3,000.
- Enterprise mobility and advanced analytics are no longer a supporting factor but a key business driver. When many other companies still consider enterprise mobility and customer insights as nice-to-have components inside the company, Kids Want has already taken them as the cornerstone of its creative business model. A chain store of mother and baby products established in 2009, Kids Want has realized annual revenue of RMB 5 billion and expects to have 5 million families as registered users by the end of this year.
Kids Want achieved a highly engaging customer experience through pervasive customer care over mobile solutions supported by IBM. It also jointly developed an intelligent CRM system based on data mining and behavior prediction, as well as sales correlation model for continuous improvement on product portfolio and customer service customization. Next, their visionary CEO will work on location store surveillance, i.e. when the supervisor is walking around the store, related checklists and important messages will be pushed onto his mobile devices for his easy reference.
- The vendor ecosystem is transforming itself toward next generation EA. Leading ISV/SI have packaged and/or repositioned their product and service portfolios toward the key elements for the next generation of enterprise architecture. For example, IBM provides Worklight 6.0 for enterprise mobility, MessageSight for real-time big data, Operational Decision Management v8.5 and Business Process Management v8.5 for process improvement especially mobile and SAP integration, Integration Bus (a.k.a Message Broker) for connectivity toward cloud environment, as well as PureData System for Hadoop which is a converged appliance embracing open frameworks. IBM partners like ITMS have also migrated their service capabilities and training programs accordingly to speed up the learning process.
In my opinion, the challenges for vendors like IBM in Chinese market come from three major aspects: 1) the product itself. The integration among various products (BPM with MessageSight, BPM with Integration Bus, etc.) still needs to be further improved to make integrated solutions easier to adopt; 2) guidance on the use cases of these new products. Industrial reference architecture for solutions like PureData for Hadoop should be enriched to speed up adoption; 3) MNC competitors. Each vendor has their unique advantages against others, for instance SAP Sybase Unwired Platform and Netweaver has better integration with SAP Business Suite, while IBM Worklight could better work with its application servers. Providing business benefits to the customer effectively and economically is the key to success.
As enterprise architects or CIOs you should get ready for the transformation of your enterprise architecture. You should carefully revisit the business strategy and requirements against the opportunity and challenges brought by emerging technologies, proactively evaluate the offerings of products and services provided by MNC and local players in Chinese market, and start to set up a plan for your internal IT organizations to develop the skillsets needed. What’s your experience with global vendors like IBM? What initiatives are your top priorities? I would encourage you to check up Forrester Emerging Technology Playbook to help you better navigate through the technology disruption.