Hype or Reality: Will Enterprise Systems as a Service become an Organizing …


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Per Svejvig, Torben Storgaard, Charles Moller, Hype or Reality: Will Enterprise Systems as a Service become an Organizing Vision for Enterprise Cloud Computing in Denmark?

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Hype or Reality: Will Enterprise Systems as a Service become an Organizing …

  1. 1. Hype or Reality: Will EnterpriseSystems as a Service become anOrganizing Vision for EnterpriseCloud Computing in Denmark?Professor Charles MøllerCenter for Industrial ProductionAalborg University, Denmark
  2. 2. CERES Mission Statement• The purpose of CERES Center for Education and Research in Enterprise Systems - C E R E S  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
  3. 3. 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 “The cloud is mostly hot air”  Torben Storgaard, Henrik Amsinck, CIO LEGO HerbertNathan & Co • Agenda  Introduction to the Study  Cloud Computing and Enterprise Systems as a Service  ESaaS in a Danish Contect  Perspectives  Conclusions© Charles Møller 3
  4. 4. Cloud Computing has Reached the Trough of Disillusionment
  5. 5. 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?
  6. 6. Cloud Computing According to NIST NIST (2011)• 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
  7. 7. Cloud Computing has Many Faces
  8. 8. Enterprise Systems as a Service (ESaaS) in Denmark• Database Svejvig, Storgaard, Møller, 2012  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?
  9. 9. 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© Charles Møller 9
  10. 10. Institutional production of organizing visions Swanson and Ramiller (1997)© Charles Møller 10
  11. 11. Findings on Organizing Vision Institutional Global Context Local Context forces Community Cloud computing has been The global discourse are part of discourse named by Gartner “as the number one priority for CIOs in 2011” the local Danish discourse, but local stories does also shape the ... [3] local context Gartner position cloud computing Denmark has a lot of small and at the “peak of inflated medium sized organizations expectations” at the Gartner (SME’s) which are expected to Hype Cycle predicting 2 to 5 be more willing to adapt ESaaS years to mainstream adoption [4] [8]. That might fertilize the Community Computer press, newspaper There is no big difference in Aberdeen survey and Panorama ground for faster adoption of structure and articles, white papers, websites, the community structure at global Consulting Group report shows a ESaaS commerce technology vendors, consultants, and local level big jump in interest in ESaaS / The Local Government Denmark industry analysts, IT SaaS [11, 12] (LGDK) tried to implement a management books, trade Amazon had an outage of their driving license booking system publications, trade shows etc. cloud services lasting for several based on Microsoft’s Azure PaaS, but ran into technical and Business Cloud computing is on The business problematic is days and affecting a large problematic everybody’s lips today and is the same at the global and local number of customers [9]. This juridical problems [24]. The legal issue was more serious as LGDK promoted as a silver bullet for level case received very much press solving several of the past coverage and it would be natural (and the municipalities) was However as Denmark has a accused to break the act on problems with IT by offering pay lot of small and medium sized to expect it to have a negative processing of personal data, per use, rapid elasticity, on companies the business impact on the perception of cloud computing especially about location of data demand self service, simple conditions might be different, [25] scalable services and (perhaps) and the arguments in favor of The CIO from “The LEGO multi-tenancy [1] cloud computing and ESaaS / Group” stated in news media that Cloud computing is SaaS might be more prevailing “cloud is mostly hot air”. Cloud furthermore marketed as a cost can only deliver a small fraction saving strategy appealing well to of the services that LEGO need the post financial crisis situation LEGO are using cloud to specific for many organizations with point solutions but “[t]o put our cloud’s “Opex over Capex story enterprise-platform on the public and ability to buy small and, if it cloud is Utopia” [26] works, to go big” [2]© Charles Møller 11
  12. 12. Conclusions and Perspective • Conclusions • Perspectives  Will Enterprise Systems as a Service become an Organizing  Do we really need a specific Vision for Enterprise Cloud conception for cloud Computing in Denmark? computing within  Pro  The OV discourse in DK is very Enterprise Systems? intense and aligned with global discourse  Cons  Do we need to provide an  Mainly driven by vendors additional abstration level: Business see no use  Experiences show no specific ”Business Processes as a value in CC Service”  Completely different  The conception of CC in ES is challenges weak and needs more research© Charles Møller 12
  13. 13. 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?
  14. 14. Cloud Computing impact on Enterprise Architecture? How will ESaaS impact Source: Ross, 2003• Enterprise Architecture Maturity?• What will Enterprise Architecture maturity Stage 4: Modular requirements for ESaaS Stage 3: Rationalized Data Business be? Stage 2: Standardized Technology Stage 1: Application• Is ESaaS a game Silo changer?
  15. 15. Learning Requirements for the Five Architectural Stages Source: Ross et al., 2006 Business Standardized Optimized Business Dynamic Silos Technology Core Modularity VenturingIT capability Local IT Shared technical Companywide Plug-and-play Seamless applications platforms standardized processes or business merging with databases process modules partners’ systemsBusiness ROI of local Reduced IT cost Cost and quality of Speed to market; ROI of newobjectives business initiatives business operations strategic agility business venturesKey Technology- Design and update of Core enterprise process Management of Create self-management enabled change standards; funding definition and reusable containedcapability management shared services measurement business business processes componentsWho defines Local business IT and business unit Senior management and IT, business, and IT, business, andapplications leaders leaders process leaders industry leaders industry leaders and partnersKey IT Measuring and Establishing Aligning project priorities Defining, Joint venturegovernance communicating local/regional/global with architecture sourcing, and governanceissues value responsibilities objectives funding business modulesStrategic Local/functional IT efficiency Business/operational Strategic agility Organicimplications optimization efficiency reconfiguration
  16. 16. 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?
  17. 17. 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?
  18. 18. 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
  19. 19. 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?