From an IT perspective, one of the more subtle aspects of cloud computing is the degree to which it changes the way business processes are managed across the enterprise.
In the past, business processes consisted of applications that were stitched together using middleware. The reason for this is that each application had access to a limited amount of IT infrastructure resources. Creating a business process required integrating all those applications running on different servers and storage systems. In the age of the cloud, however, business processes are being weaved out of a whole application software cloth in the cloud. Whether it’s deployed in a third-party data center or on premise, the business is now looking to acquire software that manages a specific business process end to end rather than the components required to merely enable a business process to occur.
Understanding this fundamental shift in how software is being acquired has allowed SAP, according to Oliver Conze, vice president of talent management solutions for SAP, to achieve a $1 billion annual revenue run rate that is being generated by 20 million users across more than 6,000 customers. A lot of that growth was driven by SuccessFactors and SAP Business ByDesign subscription billings, which SAP says grew by 92 percent and at 300 percent year over year. SAP also claims that its SAP Jam productivity tools, which incorporate social network software developed by SuccessFactors, now have over 8 million users.
Conze says the future of applications will look a lot more like SuccessFactors Employee Central, which is designed to support a specific set of human resource processes on a global basis. As a core component of the SuccessFactors Business Execution (BizX) suite, Conze says Employee Central is an example of how a new generation of cloud applications that are specifically designed to be accessed via mobile computing devices will change the way business processes are ultimately managed.
What Conze is getting at is the simple fact that line-of-business executives don’t want to fund the development of traditional applications. They want to achieve a specific business outcome using a set of software services based on a massive single base of tightly integrated code running in the cloud. SAP, obviously, has been extending its ownership of specific business processes ever since businesses began to customize ERP software. But with the advent of cloud computing, it is clear the company is looking to extend its dominance via the “consumerization” of business processes that will increasingly run in the cloud to one degree or another.
IT organizations will still need to orchestrate those business processes. But as time goes on, it’s becoming increasingly clear that the core function the IT organization plays inside most businesses will never be the same again.