Flexibility for Better IT-Business Alignment

CIO —

Most of you are probably familiar with the concept of loose coupling since it is a key design philosophy underlying new generations of technology platforms. Loose coupling, for example, is necessary to deliver the flexibility promised by service-oriented architectures (SOAs). But the concept of loose coupling also holds tremendous promise in transforming how executives organize business processes, especially as they extend across global business enterprises. Many businesses today are organized along a very different model using tightly specified, hardwired management approaches. While this strategy has been responsible for delivering a great deal of operating savings to many companies, it makes improvisation difficult because changes in one area will cause unanticipated disruptions in others. As a result, such flexibility in business practices is often discouraged.

Enterprises today are hardwired at two levels: IT platforms generally remain hardwired, and the business processes we manage on top of these IT platforms are also hardwired. Companies now have an opportunity to introduce loose coupling at both levels. The innovation of loose coupling will not only change how companies operate within the enterprise. A loosely coupled approach transforms how they collaborate and innovate across enterprises by enabling the formation of global process networks that can mobilize large numbers of highly specialized business partners to deliver more value to customers.

For example, Cisco has created a global process network consisting of thousands of channel partners who provide everything from basic fulfillment operations to highly specialized consulting or engineering services to adapt Cisco’s networking products to the unique environments of its customers. The partners in this network are loosely coupled and orchestrated by Cisco. This process network works because Cisco has developed standardized ways of specifying capabilities and performance requirements, and it familiarizes all the partners when they join the process network with its standardized vocabulary. This approach to defining standardized "interfaces" for each module of activity makes it possible for Cisco to quickly assemble the right modules and ensure that the best qualified partner is assigned to each module. This is an example of loose coupling at the business process level.

CIOs are especially well positioned to help the rest of the senior management team make the transition toward loosely coupled business processes. They understand both the technology and design principles needed to support such processes, both within and across enterprises.

The Advantage of Interchangeable Apps

Loose coupling begins with the notion of modularity, grouping activities into separate modules where the outputs can be clearly specified and where the activities in each module can be performed relatively independently without relying on activities in other parts of the application. For example, at the IT level, it makes sense to create a separate module for currency conversion in an order entry application so that introductions of new currencies can be handled independently without affecting the rest of the order entry procedures. The currency conversion module should be designed from the outset as a service that can be used by a broad range of applications—not only order entry but also procurement, expense report processing, financing and any other application—in a wide range of computing environments distributed around the world.

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