We are on the edge of a perfect storm, according to CA Technologies CEO Bill McCracken. In his keynote speech at this year’s CA World conference, he said the combination of broadband wireless connectivity, thousands of mobile apps, cheap handheld devices, social media and GPS location tracking will drive business change faster than we have seen before.
These technological developments have emerged at the same time as economic drivers require businesses to do more with their IT but spend less on investment, he says. Businesses that can’t adapt to these conditions will fail.
The key to competitive advantage, he says, has shifted from application development to application delivery.
As a CEO, McCracken said he has felt frustrated at seeing the need for change, but the IT needed to support it can not move at the same pace. Cloud computing is one technology model that could take the brakes off IT development, so that it can support business transformation.
Many industries have seen abrupt change by market entrants disrupting the business model with technology. The established players have not been able to move at a fast enough pace and have been killed off for no longer being able to support customers’ demands.
McCracken cited the adoption of ebooks by consumers that wiped out Borders, one of the largest booksellers in the US, as an example of this swift and unexpected business change.
He said: “Fortune 500 started in 1955. 11 of those companies on the list then still exist today. If you don’t change, you are writing your own epitaph.”
The way companies use technology to keep that competitive advantage has changed too. McCracken told delegates that up to now, computing has been used to improve productivity but the application used to do that is no longer the key value element, as IT becomes standardised and businesses construct support infrastructures through composite IT services. Businesses don’t have the time to develop their own bespoke applications, before their market moves off in another direction.
“The value is shifting to how we put it all together and for me, that is about supply chain.”
A key element of delivery of IT services becoming the provider of competitive advantage was modelling, McCracken says.
Up to now, applications have been built and then tested in the field. The result is they invariably failed the test and more tweaking was required. Businesses no longer have the luxury of such tinkering. Applications have to hit the ground running, if they are going to provide competitive advantage, so being able to model the systems before they are developed gives a much better chance of early successful deployment.