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?

1. Hype or Reality: Will Enterprise
Systems as a Service become an
Organizing Vision for Enterprise
Cloud Computing in Denmark?
Professor Charles Møller
Center for Industrial Production
Aalborg University, Denmark

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. 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. Cloud Computing has Reached the Trough of Disillusionment

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. 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. Cloud Computing has Many Faces

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. 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. Institutional production of organizing visions Swanson and Ramiller
(1997)
© Charles Møller 10

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. 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. 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. 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. Learning Requirements for the Five Architectural Stages
Source: Ross et al., 2006
Business Standardized Optimized Business Dynamic
Silos Technology Core Modularity Venturing
IT capability Local IT Shared technical Companywide Plug-and-play Seamless
applications platforms standardized processes or business merging with
databases process modules partners’
systems
Business ROI of local Reduced IT cost Cost and quality of Speed to market; ROI of new
objectives business initiatives business operations strategic agility business
ventures
Key Technology- Design and update of Core enterprise process Management of Create self-
management enabled change standards; funding definition and reusable contained
capability management shared services measurement business business
processes components
Who defines Local business IT and business unit Senior management and IT, business, and IT, business, and
applications leaders leaders process leaders industry leaders industry leaders
and partners
Key IT Measuring and Establishing Aligning project priorities Defining, Joint venture
governance communicating local/regional/global with architecture sourcing, and governance
issues value responsibilities objectives funding business
modules
Strategic Local/functional IT efficiency Business/operational Strategic agility Organic
implications optimization efficiency reconfiguration

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. 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. 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. 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?