Our business world is in the midst of a Cambrian Explosion of big data, new cloud services and APIs, machine learning algorithms, and next-gen, social-based, mobile-optimized business platforms and tools. All of these developments are cramming into an already-congested web of legacy platforms, old server closets, and geriatric business network infrastructures and processes, making the inherent complexity of contemporary business itself an ever-evolving adversary.
According to a study by SAP, the 200 biggest companies in the world lose over 10% of their annual profit because of complexity – that amounts to over $237 billion. These companies average about 36 different business apps per $billion in revenue. 81% believe simplification is important for their organization and 88% admit IT investment is important to achieve simplification.
In fact, a great amount of current business improvement and “digitation” efforts are actually attempts to bridge the complexity of existing legacy systems, rather than true digital transformation.
Liam Wright, CEO of True Interaction, notes,
In my experience studying and improving businesses over the last few years, I’ve seen a shift in belief. A short while ago, companies thought they could implement massive replacements of technologies – for example, move everything to SaaS applications in the cloud… but I now often see companies just adding more layers to their “onion”, rather than true supplanting for a better system and technology. The result is a knot of redundant systems that hemorrhage money, slow innovation and hinder spotting and acting upon new business opportunities.
Taking ActionA recent IDC study revealed that progressive organizations are taking multiple approaches to reducing complexity, including:
- Consolidation and rationalization of applications, systems and data centers.
- Application modernization (replacing legacy applications).
- Unifying operating systems to a single environment.
- Outsourcing to third-parties and cloud computing providers.
- Deploying better automation and integration tools and technologies.
Of course, complexity is a grim reality in todays business world, and while certainly we must accept the complex essence of our data, processes, and platforms, complexity can still be mitigated or minimized using a variety of tactics.