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Accelerating Innovation by Adopting a Pace-Layered Application Strategy

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Notes and key takeaways from the respective Garnter session. 

In 2010, Gartner introduced the pace-layered application strategy framework. The reason a new strategy has been necessary is that the conversation between business and IT leaders is not working.

IT is often trying to "standardize technologies and practices" but the business could care less. They just want solutions quickly.  Note that this doesn't mean that IT's efforts are pointless, it just means that the efforts to converge technologies (reduce tech footprint) and solidify solid processes and move toward more-perfect releases is not appreciated (understood) by the business. And, further, it means that these efforts are truly not meeting the businesses needs for business related innovation.

Here are some observations leading to and supporting the concept of pace-layering:

  • Organizations have a heterogeneous portfolio of business apps - different technologies, different purposes, some as simple a spreadsheets, and this is getting worse not better.
  • The apps range from mainframe to iPad, data center to Cloud, critical to casual.
  • Business processes change at wildly varying rates: every few years or every few days.
  • No single strategy or governance model can be appropriate for all needs/applications.
  • Even with efforts in IT attempting convergence, problem is getting worse... just face it, you're not going to get every solution onto a single standardized, converged set of framework, processes and methodologies.

The situation needs to be thought about in a layered way, with appropriate and different policies for the various layers.

Lessons learned from building architecture and the recognition that aspects of a great building's architecture is designed to tolerate change at various frequencies.  A well architected building will last for decades or even centuries.  It will be repurposed internally. Floors may be reconfigured. The exterior/skin may be changed.  The type of tenants may change (e.g., office building, to condo). The necessary internal infrastructure may change (e.g., radiators to high tech EMS). But some things are literally grounded in difficult, if not impossible, to change factors, such as the building's foundation.  Pace layering acknowledges this and applies the concept to the enterprise application portfolio.

The Pace-Layered View of Apps is that they fit into one of three "layers":

  • Systems of innovation (New Ideas, Addressing immediate Competitive Threats)
  • Systems of Differentiation (Iterating to Better Ideas, Building Unique Processes)
  • Systems of Record (Empowering Greater Efficiency, Supporting established Common Ideas)

The idea is to organize your applications into these layers.

Systems of Record - Core "Records/Data" and Common Processes (these things tend to change at the pace of regulatory change). Systems of record are important and foundational, but they don't change frequently. When they do change, the change needs to be carefully considered and controlled as to not disrupt the entire enterprise.

Systems of Differentiation - Unique Processes and Information (things you do that are unique to your business). These change much more rapidly than Systems of Record. They are still important, and need change control and data integrity, but not to the extent of Systems of Record.

Systems of Innovation - New Processes and Information (e.g., web, social, mobile, multi-channel) - In many cases this is experimental and underground. These happen in a very fast timeframe and can't be subject to bureaucratic approval processes.  Many of these don't last... the business tries something, and it may or may not stick. Some do last and turn out to be important to the business, which makes them good candidates to be re-written and moved to the Systems of Differentiation layer.

Interaction between the layers requires "connective tissue", which should be provided by IT. This includes things like:

  • Master Data Management
  • Process and Data Integration tools
  • Business Service Repository
  • Integrated Composition Technology
  • Common Security Architecture
  • Integrated Monitoring and Management
  • External Connectivity

There should be different governance models for each layer.  On the Systems of Record side, things are very structured, controlled and strict; things at Systems of Innovation are more-or-less wide open and less structured, with Systems of Differentiation being in the moderate middle. Governance should establish realistic process and data integrity requirements for these layers.

How to build a pace-layered strategy:

  • create a panel of users and IT app experts
  • decompose existing suites into individual apps
  • associate each app with the business process it supports
  • analyze the characteristics of each app and process
  • use the pace-layering model to assign each app to a layer
  • adapt a governance model that works for each of the layers, especially including the innovation layer - meaning get out of the way and let innovation happen!
  • establish connective technologies to facilitate interoperability

How can pace-layers help the business with differentiation? By acknowledging the needs at the different levels and embracing the needs of the business to move more quickly, particularly in the Systems of Innovation and Differentiation, while providing a model that protects the need to carefully control the integrity and stability of the Systems of Record.

An increasing amount of the application spend is coming out of the business, where the business goes around the IT organization in order to more quickly and directly get the results they seek.  The idea is to create a framework that allows for this and embraces it and the business results being sought.

How can pace-layers encourage innovation? By recognizing that there is a category of "Innovative Applications" with a budget and governance process that facilitates the needs and nature of innovation (i.e., speed). Use the pace layers to shift some funding from Systems of Record to Innovation Apps. Develop connective tissue that allows for innovative apps accessing master data, providing web services without compromising integrity or security. Connective tissue has to be open and easy to use - can't require complex, platform specific, rigid methods.

Pace-layers are not static. Realize that applications will move up and down the layers over time.  What may at one time be a differentiator may later be more of a commodity/system of record.  Conversely, over time, something that's a system of record, may become an area where innovation or differentiation becomes attractive.

Pace-Layering acknowledges the diverse range of applications and their varied needs for tight or loose change control and acknowledges their need for budgeting.  In short, it creates a language for communicating the varied types of apps in the enterprise and acknowledgement of what, in many cases, is underground pockets of innovation. Its adoption can help speed up innovation by providing the connective tissue, specifically designed to make the creation of innovative apps possible.

Quick chronological bio: Panther, Gopher, Blazer, Husband, Father, Doozer.