19. Handelsblatt Jahrestagung „Strategisches IT-Management“

1. Enterprise Apps – Will Future Enterprise Software
come from App Stores?
Prof. Dr. Alexander Maedche
19. Handelsblatt Jahrestagung „Strategisches IT-Management“
Munich, January 29th 2013

2. Objectives of this talk
 Review history of enterprise systems and identify key issues.
1
 Introduce platform-based ecosystems and provide selected views
2 on their underlying mechanisms.
 Outline strategies for leveraging platform-based ecosystems in an
3 enterprise IT environment.
2

3. Historic Perspective on Enterprise Systems:
Evolution of Paradigms & Key Issues
Calculation Functional Integrated Service-oriented
Systems Systems Systems Systems
Module 2
ERP
Module 3
SOA Middleware
Module Module
1 2
Module 1
Single Module Module Module
1
Module
2
Mdule x
Module 3
1 2
Purpose Module Module
Module Module Module
3
Module
4
3 4
Module
3 4
1950 1960 1970 1980 1990 2000 2010 Time
Limited Inconsistency, He Complexity, Governance,
functional terogeneity, Silo- Inflexibility, Development &
scope based Competitive Maintenance Costs,
Decisions,TCO Advantage? Lacking Capabilities
3

4. Important Principle of Successful Consumer IT Providers
Demonstrate platform leadership and
establish a vibrant ecosystem of
partners, developers, users, customers,
and communities.
Ecosystem
Platform
…
(Gawer & Cusumano, 2002); (Simon, 2011)
4

5. Definition: Platforms & Ecosystems
Platforms are defined as an “… extensible Desktop OS: Unix, Mac, Windows
Game Consoles: Wii, Xbox, Playstation
codebase of a software-based system that Payment Systems: Paypal, Google
Checkout, Visa, Apple, Mobile Felica
provides core functionality shared by the Mobile Devices: iPhone, Android, Symbian,
modules that interoperate with it and the Blackberry
Social Networks: Facebook, LinkedIn, XING
interfaces through which they interoperate.” Web Search: Google, Bing+Yahoo!, Baidu
Ebooks: Amazon Kindle, iPad, Sony
(Tiwana et al., 2010) …
“The collection of the platform and the
modules specific to that platform represent Ecosystem
the platform‟s ecosystem.” Module … Module
(Gawer & Cusumano, 2002)
Interfaces
Winners in a platform market generally
have the “best” platform strategy, not Platform
necessarily the “best” product. (Cusumano, 2010)
5

6. Platform-based Ecosystems: Architecture, Governance and
Environmental Dynamics
„Evolution of platform-based ecosystems depends on choices of the
platform owners and exogeneous environmental dynamics.“
(Tiwana et al., 2010)
Internal Fit
Platform Architecture Platform ArchitecturePlatform Governance
Modularity Modularity Decision Rights, Control
Decomposition, Decomposition, Mechanisms, and
and Design Rules and Design Rules Ownership
Environmental
dynamics
Environmental Fit
Convergence,
Multihoming costs,
Complementors
6

7. Integration vs. Modularity
Learning from Product Development
 Modularity is a very general set of
principles for managing complexity.
However, complex systems are not
fully decomposable. (Simon, 1962)
Integrated System Modular System
 Product architecture: (Ulrich, 1995)
Arrangement of functional elements,
Mapping of functional elements to physical
components, and
Specification of interfaces among physical
components.
 Methods such as the Design Structure Matrix
(DSM) help to analyze and optimize the product
structure. Design Structure Matrix
7

8. „One Size Fits All“- Platform Approach does not work:
Learning from the Automotive Industry
Platform-based product development has been introduced in the
Automotive Industry already at the end of the 90s. Costs could be
successfully reduced. However, branding issues and cannibilization
effects appeared.
Volkswagen: Different Assembley Kits depending on class/price
e.g. Volkswagen Modularer
Querbaukasten (MQB):
 Harmonized Interfaces
 Basis for 40 different
models (A3, Polo, Golf,
Passat, …) until 2018
 Intensified Collaboration
with First-Tier Suppliers
8

9. Today„s Enterprise System Landscapes:
A Platform-based Perspective
Self Dev … 3rd Party
…
Mobile App Mobile App
Comm. Interfaces
Self Dev
Sharepoint
App
Interfaces Extension
iOS
Office /
Sharepoint
…
- Architecture?
ABAP
ISV-based
Custom
Module 1 Interfaces
Extension
- Governance?
- Environmental Dynamics?
ERP
9

10. New Technology Concepts become available:
Platform-as-a-Service
…
(Rymer and Ried, 2012)
10

11. Managerial Implications for CIOs
Six Enduring Principles for Managing Strategy & Innovation in an
Uncertain World (Cusumano, 2010)
Pull, Don„t just push
Platforms &
Capabilities
Services
Scope, Not Just Scale
Not just strategy
Not just products
Flexibility, Not Just Efficiency
Agility to lead Establish innovation
or adapt to ecosystems & hybrid
change business models
11

12. Towards Platform-Based Enterprise Systems
Corporate IT becomes driver of platform-based ecosystem(s) from an
architecture, governance, and environmental dynamics perspective:
Platform-based
Systems
Calculation Functional Integrated Service-oriented
Systems Systems Systems Systems
Ecosystem
Module 2
Tailor-based Standard
ERP Module (LoB) Module by ISV
…
Module 3
Module
SOA Middleware
Module
1 2
Module 1
Shared Shared
…
Single Module Module Module
1
Module
2
Mdule x
Module 3
1 2
Purpose
Module Module Module Module
Module
3
Module
4
Module Module
Provided
3 4
Module
3 4
Platform by IT
1950 1960 1970 1980 1990 2000 2010 Time
ERP
Mdule x
Module Module
1 2
Module Module
3 4
12

13. Summary
• Historic perspective of Enterprise Systems has
1 been characterized by multiple trade-offs: limited
scope, heterogeneity, inflexibility, governance, …
2 • Platform-based ecosystems have shown to be a
powerful concept in various domains.
• Corporate IT needs to adopt platform thinking and
3 build the required capabilities towards platform-
based Enterprise Systems.
13

14. Thank you for your attention!
Q&A
Prof. Dr. Alexander Mädche
+49 621 181 3606
maedche@es.uni-mannheim.de
Chair of Information Systems IV, Business
School and Institute for Enterprise Systems,
University of Mannheim
http://eris.bwl.uni-mannheim.de
http://ines.uni-mannheim.de
14

15. References
Cusumano, M. 2010. Staying Power: Six Enduring Principles for Managing Strategy and
Innovation in an Uncertain World. Oxford University Press.
Gawer, A. and Cusumano, M. 2002. Platform Leadership: How Intel, Microsoft, and Cisco
Drive Industry Innovation. Harvard Business Review Press.
Simon, P. 2011. The Age of the Platform: How Amazon, Apple, Facebook, and Google
Have Redefined Business. Motion Publishing.
Tiwana, A., Konsynski, B., and Bush, A. A. 2010. “Research Commentary - Platform
Evolution: Coevolution of Platform Architecture, Governance, and Environmental
Dynamics,” Information Systems Research (21:4), pp. 675–687.
Rymer, J. R. and Ried, S. 2011. The Forrester Wave™: Platform- As-A-Service For App
Dev And Delivery Professionals, Q2 2011.
Ulrich, K. 1995. The role of product architecture in the manufacturing firm”, Research
Policy 24, 1995, pp. 419-440.
Simon, H.A., 1962. The architecture of complexity. In: Proceedings of the American
Philosophical Society, 106, pp. 467–482
Steward, D.V. 1981. The Design Structure System: A Method for Managing the Design of
Complex Systems. IEEE Transactions on Engineering Management. 28(3), pp. 71-74.
15