Technical architects have long understood the benefits of architectural laying within an application to reduce coupling, increase modularity and maintainability, etc.  Typically, that layering looks something like:

However, as IT strategists we must also recognize the benefits of layering when it comes to looking across applications.  After all, most organizations (including Storeroom Solutions) rely upon a large number of applications to perform its responsibilities.  Most of these applications were assembled over the years based upon the requirements and business strategy at that time.  Rarely do enterprises have the opportunity to build everything at once (oh my, how I miss the dot-com days when it seemed everything was green field).  The same way layering within an application can improve modularity and maintainability, layering of applications can increase business flexibility without spiraling increases in complexity and cost.

Say, for example, a service provider offers an application that it has developed over the years to perform procurement and inventory management functions for clients.  It has proven to be a real competitive advantage, especially for those seeking a turn-key solution.  The application has also proven to be relatively low maintenance and trouble free.  It looks like this:

Alas,  times change and the number of new clients seeking a turn-key solution starts to dwindle.  Fortunately, the company has developed some real expertise in its procurement capabilities that are attractive to an entirely new segment of the market.  This segment already owns an inventory management application but wishes to tap into the advanced procurement features offered in this application.  The company is faced with a challenge.  Because application layering wasn’t considered in the original design, separating the functionality is a problem.  In order to overcome these challenges, the company must aggressively re-factor its procurement/purchasing functions to allow inputs from a source other than its embedded inventory application.  In fact, it may be easier to re-write the procurement application, leveraging the existing business rules. The new application topology may look something like this:

What is this advantage of this approach? In this case, this application layering approach allows for new business opportunities that would have otherwise been difficult to serve.  Furthermore, by employing SOA concepts and maintaining a disciplined API in its procurement application, the company can keep maintenance manageable.  After all, its internal inventory application could use the same API as the external inventory application to communicate!

Downsides? It is is easy to gloss over the downsides but they are rarely greater than the benefits of moving to this layered application approach.  One practical downside is the complexity that could be introduced to some users due to the new architecture.  For example, if users were accustomed to a single application with an identical look and feel they may be exposed to a little more variation due to the new modular approach.  However, even this can be managed through Single Sign On technology and common libraries and standards between the teams responsible for maintain their respective applications.

While this approach may seem to be a “no-brainer”, I continue to encounter architectures where little, if any, emphasis is placed on “application layering”.  Hopefully, more architects and CIO/CTO’s will start to place greater value on the benefits of this approach.

Throughout my career I have had the opportunity to work with a number of companies and clients.  Early in my career, I earned my stripes working in larger organizations, primarily as a profit center manager in the insurance industry.   This provided a perspective on the challenges faced by big companies trying to shave a few points off its expense ratio or steal a fraction of a percent market share from a competitor.  Over time, especially as I began to do more consulting work, I experienced life in smaller companies including numerous startups.  This is an entirely different world altogether, where survival is often the primary short term objective.

Regardless of the size of the organization, I have observed 2 qualities that significantly increase the likelihood of success: focus and discipline.  Others may say “operational excellence” or “people” are the biggest factors in driving success, however my experience suggests these attributes are by-products of focus and discipline or, at the least, difficult to achieve when there is a lack of focus.

Some of the basics I learned at Columbia Business School related to the fundamental discipline of market strategy, often hammered home via writings from Harvard’s Michael Porter.  It goes something like this:

1. Identify (and validate) a market need for a product or service
2. Assemble a set of products and services that specifically address these needs
3. Attack the market with unwavering discipline and focus
4. After you’ve had a chance to assess the prospects for long term success, re-evaluate and repeat

Unfortunately, most companies skip step 3 or, at the least, compress this cycle into a [almost] daily activity.  Usually, the temptation of a prospect with deep pockets or some other distraction will divert the focus of the organization while it branches out into a self-rationalized engagement.  Meanwhile, resources of the organization are re-directed away from the original focus, watering down the ability of the organization to deliver best in class products and services to that segment.  Unfortunately, saying “no” takes discipline and far too many CEO’s lack this quality in today’s short term world.

Of course, at some point you have to evaluate step 4 above and ask if you are on the right path.  However, this should be a rigorous process executed with the implication that a change in course requires a significant investment over an extended period of time.  This evaluation shouldn’t occur at weekly staff meetings or in response to a sales prospect that appears on the radar screen and wants something “a little different” than what you offer.  If the sales prospect is too large to be ignored, then the organization should decide at that time if this new offering is the better way to move forward and re-channel its energy in this direction.  Again, if this is done too often, employees will become confused and frustrated and you’ll have little change of actually developing any intellectual property or expertise.

When we started Kemper Auto and Home in 1996, as a direct marketing subsidiary of Kemper Insurance, we were certain that direct mail was the way to go.  After all, that is what we knew and it seemed like a reasonable model if we could keep expenses down.  Unfortunately, we learned within the first few months that times were changing and our assumptions regarding response rate were way off.  We executed step number 4 at that time and decided to focus on the internet.  We invested heavily in the web site, hitting remote rating servers, real-time communication with underwriting agencies, etc.  Within 2 years we became one of the leading providers of auto insurance on the web (through relationships with portals such as Insweb).  We did a nice job of adjusting course and focusing our energy.

However, we didn’t follow this formula about 2 years later.  We allowed the prospect of writing a big chunk of business through an airline carrier affinity relationship to divert our attention.  We weren’t in the affinity insurance business (a completely different underwriting and pricing model) and we got burned.  We lost focus.  It almost brought the company to its knees.  Fortunately, we were able to scramble to get out of the relationship and re-direct the resources back to the internet business before it was too late.  But it set us way back in our plan and schedule.

This experience had a profound re-enforcing impact on my academic learning.  Unfortunately, I see it occur over and over.