Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Read a full transcript or download a copy. Sponsor: Ariba.

As more services, applications, and data are developed for -- and delivered via -- cloud models, how do business to business (B2B) commerce and procurement adapt?

Or, perhaps we have the cart in front of the horse. Are the new requirements and expectations of modern, global business processes, in fact, driving the demand for IT solutions that can be best delivered via cloud models?

Either way, the promise of cloud aligns very well with the sophistication of modern B2B ecommerce and the pressing need for speed, agility, discovery, efficiency, and adaptability. Ecosystems of services are swiftly organizing around cloud models. How then should businesses best respond?

To answer these questions, BriefingsDirect assembled a group of IT industry analysts and executives at the recent Ariba LIVE 2010 conference in Orlando, Fla. to explore the business implications for ecommerce in the cloud-computing era.

Panelists include Robert Mahowald, Research Vice President at IDC; Mickey North Rizza, Research Director at AMR Research, a Gartner company; Tim Minahan, Chief Marketing Officer at Ariba, and Chris Sawchuk, Managing Director at The Hackett Group. The discussion is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Minahan: What we're seeing now is that we’ve really entered the state of new normal. We’ve just gone through a major recession. Companies have taken a lot of cost out of their operations. It's cost reduction in the form of laying off employees, and reducing infrastructure cost, including IT cost.

If you look at most of the studies out there, the CEOs, CFOs, and COs, are saying, "We're not hiring that back. We are looking for a new level of productivity, and more agility. To do so we're going to rely much more on external trading partners, which means we're going to need to collaborate with them much more.

"We're also going to look at alternative IT models to help support that collaboration outside of our enterprise, because our ERP investments do very well at automating information and process within the four walls. It stops at the edge of the enterprise and, at the end of the day, we do business. We buy, sell, and manage cash with our external trading partners and we need to automate and streamline those processes as well."

SaaS was all about a new delivery model for an existing business process. When you move into cloud, when you move into some of these collaborative processes around supply chain, and procurement, and the financial supply chain, it really involves multiple parties. It's really about business process transformation, a business process that's shared among multiple trading partners.

To do that, it’s not just the ability for everyone to share a common technology platform upon which they can collaborate around the process, but rather everyone needs to be digitally connected in a community, so that they can add new trading partners or remove old trading partners, as their needs change.

North Rizza: We’re actually finding companies are spending more time looking at the cloud. What happens is that you have your trading partners specifically around the sale side and the supply side of the organization. If you start looking just across your own businesses and internal stakeholders, you realize they can actually work together, get the information they need, and spend a lot of time on their business process, using just basic technology and automation components.

But, when they start looking at that extended network, into their trading partners, they realize we’re not getting everything we need. We need to pull everything together and we need to do it more quickly than what we’re doing. We can’t wait for on-premise, behind-the-firewall type applications. We need something that’s going to give us both the service and the technology and allow us to work in that trading-partner community in a collaborative environment.

In a recent study we just did, we found that 96 percent of the companies in that study are, or will be, using cloud applications. Within that, we see 46 percent are using hybrid cloud solution. That solution is really around the cloud technology, optimizing across their IT investment and on-premise, typically around enterprise resource planning (ERP), but there are many other instances as well. And then, they're tying that back in to the cloud services, where it’s actually extending the capabilities from their IT standpoint. And, that’s 46 percent out of the 96 percent within that.

... We think there are some great opportunities here for companies to move forward.

Mahowald: There is a lot more possibility now for collaborative commerce, when business applications have built a scenario where a lot of our data and application functionality exists outside of your organization. In that situation, it becomes far easier to source new partners and customers, leverage and trust data that lives in the cloud, and invite authenticated partners to enter into that kind of exchange.

It’s easy to see the way that the cloud has grown up and become more capable to support some of the business requirements that we have. At the same time, many of our business requirements are changing to adapt to a growing wealth of solutions in the cloud.

North Rizza: We've also seen the applications come out even from the ERP standpoint in the different pieces that come together to marry that entire ERP system. What you see happen is that every function has a piece of that. You see the various markets that have developed supplier relationship management (SRM), customer relationship management (CRM), and what not, out there in the marketplace.

What's now evolved is that those business processes really go end to end into that trading partner network. What you are finding is that you can use those applications, but you don't necessarily have to use those applications. You can use the services that go with it.

What you're doing is driving value. At the end of the day, all you want to do is deliver a value, and that's what's happening.

The point is that you're actually making some cost-value trade-offs, lowering your overall cost and extending some of this into your partnerships and your trading partner community. What you're doing is driving value. At the end of the day, all you want to do is deliver a value, and that's what's happening.

Sawchuk: One benefit that we didn’t touch on during our discussion here is a benefit I call the democratization of collaboration. When you think about the past, it has always been the big companies who could collaborate. They had the tools, they had the investments, they had the dollars.

What you're now had seeing is an environment where anybody can participate. Small, large, etc. all become connected in this world. That just takes things to a different level than what we’ve experienced. Just economically, everyone is now connected across the board in a much more equal and level playing field.

Focus on process agility

We now have the opportunity, the focus on agility, and the focus on where we’re going. It's a much more volatile world. We’ve got to build more agility and more variabilization into our business models, not only our staffing, our people, the way we do business, and our technology tools, but also the more extended value chain. Where we draw the lines between what we do becomes much more transparent and it's easier to make those decisions than we have in the past.

Minahan: There is a massive movement afoot in the enterprise space that's beginning to blur the line between enterprise applications and the community. What got in the way of business-to-business collaboration before was that there was no transparency. There was no efficient way to discover, qualify, and connect with your trading partners, before you could even collaborate with them.

There was a level of un-trust, a higher transaction cost that artificially inflated prices and costs that went around things. The ability to get rid of all the paper, connect digitally with everyone, and then open this up in a community environment, where you can collaborate in a host of different ways and not just around the transaction really is transformative.

As companies begin to look at particularly "extraprise" type applications, the community is going to become more and more important, whether that's the community of you and your trading partners, or a community of you and your peers, that can help you design the better process.

Sawchuk: What's going to be key over time is think about the lives we live today and the informational overload that we have. As you can rate these communities, there is going to be all kinds of information intelligence created. How do we dissect that and make it smart, relevant, timely, and in bite-sized chunks that we can deal with?

So the question is whether we're going to create all this community, all of this collaboration, all of this information in services, and then be able to dissect that and make it relevant for what we are trying to achieve. It's going to be a key differentiator.

Overload of information

We’ve always been in a time, where we try to get access to more information, more knowledge, and more intelligence. We're quickly moving into a period of time where it's going to be an overload of that kind of information.

Minahan: An important component, and which Chris is talking about, is taking that intelligence and putting in context of the business process. The reason we have information overload today, or one of the reasons, is because of the information that’s out there. We’ve aggregated all this information. I'm doing business process over here, and, oh God, I go over there to get that information. It's the ability to aggregate information and put it right within context with other business process.

The reason we have information overload today, or one of the reasons, is because of the information that’s out there.

So, I've gone out and aggregated my spend. I know where my spend leverage is. Guess what! I now have this market intelligence on what's going on, pricing in the season that I'm supplying the market, and what other buyers are experiencing in the market.

It might not be such a good time to go out and source that, so maybe I will go my second largest category of spend and source that first. That’s the type of the analytic that you need, which is in context with the business process.

Mahowald: It's important, as we start to put more-and-more business activities into these communities -- and more-and-more of our data and transactions happen outside the organization on SaaS services -- that we understand exactly what that means for organizations, where customer data and our own data actually resides and how we can find it during an audit in a way that guarantees that we've met our business requirements.

We don’t want to restrict ourselves and say don’t participate in this community. I think it's healthy and it ultimately drives tremendous value for us. What we do want to say is that we have to apply the same kind of governance and rules that help us manage our processes that are now onsite in this new world, where we are participating in communities and SaaS services. The same thing should apply.

The bottom line is that if you don’t do it, there isn’t even a ton of money on the table. You’re not able to take out the cost that you want to take out.

North Rizza: Basically, what we see the best companies doing [around cloud computing] is that they start to understand what their overall business objectives are. Then, they peel that back and say, "What am I looking at in my different functions across the business and what does that mean, if I want to improve the process and I want to get those end results."

As they starting peeling that back, they soon discover that it’s usually around revenue cost savings. It’s also about improving the business process and reducing cycle time. When you put all those together and you look at a recent study that we just did, you recognize that there are very large gaps between those that have already deployed cloud-based technologies and solutions.

Then, you step back to those that are even considering or using them as part of their overall extended enterprise. What we’re finding is that the gap is so large and its benefits are so great that there is no reason you wouldn’t want to take all that and put it in there.

The bottom line is that if you don’t do it, there isn’t even a ton of money on the table. You’re not able to take out the cost that you want to take out. You can’t get the products in there and teach the individuals the business process and cut down your cycle time that you’re going for. And most importantly, you’re not getting your revenue. You’re leaving it on the table.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Read a full transcript or download a copy. Sponsor: Ariba.

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Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Read a full transcript or download a copy. Sponsor: The Open Group.

We've assembled a panel to examine the key market trends impacting enterprise architecture (EA) in different regions of the world. We'll evaluate how the use and value of EA is emerging and progressing worldwide, and how the expanding use of EA offers a unique window into global business trends as well.

Coming to you from last week's The Open Group’s Enterprise Architecture Practitioners Conference in Boston, the experts here share their knowledge on several developing and mature markets, as well as present a focus on China. We'll hear about the cultural barriers and/or accelerants for EA adoption from region to region.

Here to help better understand the role of EA as it bestrides the globe, please welcome Allen Brown, President and CEO of The Open Group; Eric Boulay, president and CEO of Arismore and also CEO of The Open Group, France; Chris Forde, vice president of Enterprise Architecture & Membership Capabilities of The Open Group; Mats Gejnevall, a Certified Enterprise Architect with Capgemini, Sweden, and Stuart Macgregor, CEO of Real IRM and CEO of The Open Group, South Africa. The panel is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Brown: Enterprise Architecture (EA) is an umbrella term that relates to an awful lot of activity that flows further down, whether it's business IT architecture, data architecture, and so on. There are many things, but the driving force in many organizations is this need to integrate and share information.

A trend over a number of years now is that the barriers within enterprises; the silos, the departments, the stovepipes, have been broken down.

Organizations are working cross-functionally. They're bringing people together. They're working with their business partners, and they have their IT infrastructure integrated with their business partners. That has caused a requirement for people to be able to look across the entire organization and think about how IT impacts different parts of the organization and how it integrates together.

Many parts of the organization have had applications built for the stovepipes that now need to work together in ways that they were never intended, when those legacy applications were put in, because we never intended those legacy applications to last this long. But, they did, and you can't just replace them.

What's happened with what we call boundaryless information flow, or the requirement for access to integrated information under security issues, is that we're now having to deal with something called "EA" on a number of different levels.

Different aspects

Many people have tried to define EA, and I don't think anyone has come up with a satisfactory overarching definition yet. But, there are a number of different aspects to it. At the moment, EA is focused on the IT element, although it has ambition to look at the architecture of an entire enterprise at some stage.

We're seeing continued growth in the adoption of EA in general and TOGAF in particular -- and it's continuing to grow. There are organizations that are saying that EA isn’t delivering near-term to the bottom lines, so they're going to cut the cost.

There are more organizations that are saying that this is the time to invest, to rationalize, and to really drive out value from their IT investment. It varies from enterprise to enterprise. So, you're starting to see a mix of things. But, generally speaking, my experience in the developed or struggling economies is that there are more people focused on EA than not.

We're seeing EA and TOGAF adoption pretty broadly across the planet, really. Obviously the US and UK were leading, but the amount of uptake in the Asia-Pacific region right now is quite dramatic and we're starting to see that take off. But, it's really difficult to isolate any particular region.

We’ve now got something like 15,000 members of our professional body, the Association of The Open Group Enterprise Architects. They are, in some way or another, connected with TOGAF for our IT architect certification. Those people are distributed across 116 different countries. So, it's really quite difficult to say which is growing the most.

Boulay: Key drivers for EA in France are the necessity to move forward for big and small enterprises. Because of the downturn, the future of the enterprise is to roll out in an international, standard view. In order to roll out -- for example, for big banks on a European or worldwide basis -- they have to welcome big transformation, and this kind of big transformation can be helped by EA.

It's an architecture issue to transform local enterprise to a worldwide or a European enterprise. This is a huge opportunity for enterprise architects and for EA to help in this big change. So, there is no downturn for EA, because if we use it and build a new EA practice in order to better address this kind of job, it's a huge opportunity for us. There is no downturn for us. It's only a matter of finding the right skills in order to help enterprise go abroad.

We spent a lot of time to move from IT EA to real EA. Now, I think we're mature enough to take the new capability brought by the new technologies. Cloud should be one of them. And now, once more we're ready to move from the old-fashioned way of sharing resources to better practices brought by new technology. You can transform the business, but you also can transform the way to consume IT.

Forde: The Chinese market is really very interesting. There's an opportunity there for the EA practice to grow massively. For the most part, larger enterprises in the China region are relying on the brand name western companies to do strategy and planning, and there is very limited internal capability, knowledge, and experience around EA.

I've been hearing from folks in various organizations, both state-owned companies and others, that they're reluctant to step away from these brand-name companies, because there is a certain degree of security around the planning and activities that go on there, but there is also a degree of dissatisfaction that they aren’t feeling in control of their own fate.

Over the next several years, I anticipate the development of internal architecture practices and an up-scaling of staff. The universities already have in place CIO forums and executive MBA activities that explicitly deal with EA as a set of concepts. Over time, I think that it's going to find it's place in the Chinese organizations.

At the moment, they're still continuing with this kind of organic growth of the IT approach to things, which is something that the Western markets dealt with 15 years ago, and found the need for a more planful approach to doing things.

This is the opportunity for us in EA in that particular market. The issue is that at the leadership level in these companies there isn’t a perception that they need to do anything, because the problem hasn’t actually arrived broadly inside China, from what I’m seeing.

Gejnevall: Transformation has always been a big driver in the enterprise Architecture Forum, but what we see these days is that getting your IT under control has been a major factor for going into the EA side of things. Slowly the companies now are connecting the IT structures they have with the business.

It was a struggle in the beginning, and most of the EA projects were IT-based projects, but now, business is starting to understand the full impact and understand that the IT solutions that we create should really be aligned with the long-term strategies and objectives of the organizations.

In the past, public sector has been pretty slow on the uptake, but recently we're doing a lot of business with healthcare services and so on. They're really large organizations, with 30,000, 40,000, or 50,000 people, and they have lots of different divisions. They need to work together in a collaborative fashion and fulfill the long term goals that the politicians have set up for them.

Macgregor: South Africa is slightly different, because EA is from the business side, rather than from technology. A lot of organizations have spent a lot of money working on business processes, and that business process architecture across the business domain is now being linked to the technology domains.

In fact, we're coming from the top down, instead of from the technology side upward. South Africa currently has roughly 10 percent of the Architecture Forum membership, all South Africans, and there is a big adoption of TOGAF in South Africa. If you look at our GDP in comparison, it’s quite exceptional.

That’s really been because of The Open Group's presence in South Africa, organizing events, a lot of TOGAF training, a lot of certification, a lot of press articles, and really driving the business value and the business understanding of what EA is about.

We have had for example, SASOL which is one of the larger petrochemical organizations, adopt TOGAF, working it into the government standard. What their enterprise architect did, is he bought Enterprise Architecture as Strategy, the Jeanne Ross book, and distributed to senior executives. Given that it is written in business-speak, it really led to the adoption and understanding of what EA is about, and was quite serious for the uptake within the business.

We differ across business sectors as well, in that our financial services sector -- again, a big focus on the business process area -- are lagging in the technology domain, and that’s now a key focus area bringing that up to speed.

We’re seeing greater focus on modeling and defining information architecture. We're understanding the difference between information architecture and data architecture and using that as a way of bridging the gap between business and technology, while tackling the information architecture domain.

Body of knowledge

Forde: The learning that has occurred in the Western markets have produced a body of knowledge in TOGAF that can accelerate for other companies the way they adopt and improve their ability to deliver on strategy, planning, and execution.

Once the recognition is there inside companies, when the need arrives, those companies in that market that have planned for this will start to really accelerate in terms of their global position.

Gejnevall: Capgemini has put together a number of service offerings worldwide that we are adapting to the conditions of each one of the countries. We can see that things like boundaryless information -- being able to use information in new ways -- is something that every company wants to do.

In cloud, it always comes into the discussion, even though people don’t quite know how to use it yet. I think The Open Group’s effort around cloud computing can actually help that to a large extent. The ROI paper on cloud computing, for instance, will be a tremendous help for a lot of companies to have a look at and see what can they do. But, everything is moving very, very slowly. In countries like Sweden, the bigger companies might try these out, but the smaller ones are not ready yet.

Brown: Everything I hear says that organizations that are involved in EA in general, and TOGAF in particular, are finding it much easier to integrate with business partners. Mergers and acquisitions are enabled more effectively. So, in working with other organizations, as we get more and more connected, EA is a positive force in that.

Depending on the maturity of the company and of the region, you might be talking anywhere from six-month payback on an EA activity to a three-year payback.

You can get to one of the conferences and share experiences with other members. That's the key area to start. But, if you can’t do that, then there is an awful lot of available information. At the minimum, TOGAF itself is available freely online for people to read, look at, and use within their own organization.

You can buy the book, if it’s easier to have that. If you want to go to the next state, there are many trainee organizations that can train your people in TOGAF. If you can’t avail yourself of that -- there are some countries where that’s not possible -- then there is a study guide that you can get from The Open Group to work your way through.

Forde: The body of work that we have available to us in TOGAF is that, if you look at it as a tool in the context of the problem you’re trying to solve, you can drive immediate value. If you look at it as some sort of massive program that you’re going to implement, you’re looking at a longer term payback.

So, it’s very important for individuals and companies to approach EA with a specific problem in mind, not just some sort of generic goodness thing that they’re looking at.

There are a number of places [to get started]. The first and foremost one will be the membership of The Open Group, and particularly the Architecture Forum. You’ve got people sitting around this microphone right now that can help, and you’ve got people out at the conference who have an enormous background and this capability.

Then, in the member companies, either on the supplier side, on the customer side, or in academia, you also have resources available. Those are the places to go to find out what you need to do, and what the approaches can be used, and in a practical sense, what the barriers and the pitfalls are in the approaches. People here have been there, done that, and that’s where you need to go, to the experience.

Macgregor: To me organization change leadership is an absolute essential component of getting EA to work, the mechanics of modeling etc. It’s not really that difficult. It's the stuff that we have mastered and we’ve been doing for years. It’s how to drive positive business-appropriate and sustainable EA practices that are run like businesses with a very clearly defined offering that understands who the customers are, and can really deliver more value than they cost.

Boulay: In France, we had a long journey to capture EA practice. Right now, we consider that we moved from IT EA to enterprise, to real business EA, and this is a big shift. Now, CxOs aren't chasing enterprise architects. They're trying to educate enterprise architects inside their company. They understand that they need these kind of people in order to make the company be successful and to move forward.

So, it’s a big challenge and a big recognition for us. They need our body of knowledge as TOGAF and the EA body of knowledge. They need us to train, coach, and to help their inside employees to become leaders. Enterprise architects are definitely, as many of you mentioned, people who are ready to talk with different groups in order to ensure there are no more stovepipe in these companies.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Read a full transcript or download a copy. Sponsor: The Open Group.

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Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Read a full transcript or download a copy. Sponsor: The Open Group.

Welcome to a panel discussion that examines the need for improved common defenses -- including advancing cooperation between enterprise architects and chief security officers -- to jointly defend against burgeoning cyber security threats. The risks are coming from inside enterprises, as well as myriad external sources.

From the panel, at The Open Group’s Security Practitioners Conference this week in Boston, we’ll learn more about the nature of these borderless, external, cyber security threats, as they emerge from criminal enterprises, globally competitive business sources, even state-based threats, and sometimes a combination of these. We’ll also hear recommendations on developing smarter processes for cyber security based on proven methods and pervasive policies.

To help broaden the scope of enterprise architecture, and to develop a leverage point for "mission architecture"-levels of security and defenses, we're joined by retired Air Force Lt. Gen. Harry D. Raduege Jr., chairman of the Deloitte Center for Cyber Innovation, and who co-chairs a cybersecurity commission under President Obama. We’re also joined by Usman Sindhu, researcher at Forrester Research. The panel is moderated by Dana Gardner, principal analyst at Interarbor Solutions.

Here are some excerpts:

Raduege: With openness, come these new threats. The vulnerabilities that we have of operating in cyberspace are magnified by ... identity theft, information manipulation, information theft, cyber crime, and insider threats that are prevalent in many of our organizations and companies today. Also, the threat of espionage, of losing lots of intellectual property from our businesses, and the cyber attacks that are taking place, the denial-of-service (DOS), and also the threat that we see on the horizon -- cyberterrorism.

There's now a tremendous opportunity for us to gain the benefits of being able to communicate, not only nationally, but also internationally, and across all borders, in the area of cyber security. This is an international problem, and so an opportunity for us to take advantage of it. We’re all in this together.

Many people are bringing best practices to the table. We’re learning from each other’s experiences. The international cooperation and the opportunity to meet and discuss these areas are very valuable to all of us individually, and to our companies and to our nations.

This is the significance of this type of a gathering, to talk about the real benefits of cyberspace, but also to talk about the issues of cyber security that are facing us all. The importance of the underlying foundational aspects of having a great enterprise architecture is pointing more toward a mission architecture for business success.

Organizations like The Open Group are working on the common standards that are so important for the international community to comply with and to have as guiding factors. Education is very important, developing a cyber mindset across all people of the world, not only in the government organizations, but for industry, and also the individual users at home.

The aspects of education and training and awareness of what’s going on there in cyber is paramount for proper operation, but also for the protection of your critical information.

The aspects of education and training and awareness of what’s going on there in cyber is paramount for proper operation, but also for the protection of your critical information.

Sindhu: Traditionally, security has been a point technology. Even in the government space, there has been a lot of focus around just technologies. We have seen saw how the importance of point technologies has been overemphasized, rather than risk analysis and process.

Today, many organizations, including the public and private sector, are waking up to the fact that technology alone is not the answer. It’s the process and people as well. That’s where deriving these best practices would be a key in collaborating with the private and public sector and bringing in an architecture.

As far as this interconnectivity is concerned, you'll see lot of different business-to-business (B2B) and business-to-consumer (B2C) interactions. It happens today. Today, business partners and distributors do business on the go, on social media, either Twitter feeds or Facebook, or something I call ad-hoc communication through their mobile devices. This is the nature of today’s interaction. This is the nature of B2C and B2B interactions.

... And in the 21st Century we'll have a lot more innovations and more technology adoption in a much more accelerated fashion.

The smart concept

That’s where the smart concept comes in. This entails smartening our physical infrastructure, our critical infrastructures like utility, healthcare, financial services, transportation, public safety, and also city administrations, down to the IT system itself.

It will use of lot of IT enablement from either the cloud or communication infrastructure, things like RFID technologies, 4G technologies, and solar technologies, to embed lot of situational awareness, analytics, and locationing into the systems.

This is a smart kind of a concept that embeds itself into smart city infrastructure where all the different components embed all the IT technologies together. There are other initiatives like smart grid or smart healthcare that are embedding these IT technologies as well.

That's a great way to start the 21st Century with this innovation, but the need for security arises at the same time. As Gen. Raduege mentioned, cyberspace is a new frontier, or information security in the cyber world, is a new frontier.

Today, many organizations, including the public and private sector, are waking up to the fact that technology alone is not the answer.

That’s where we have to address lot of different issues and problems around policy, architecture, and best practices. It’s only going to get more serious, as we connect a lot of different systems that were not connected in the past.

One of the key aspects of smartness is cross-industry and cross-team collaboration. Today, when we start to look at some of the smart deployments, either in the vertical sectors like utilities, healthcare, or even other private-sector industries, we see more and more that security is getting attention from the board-level and C-level executive.

Similarly, enterprise architecture is getting its attention as well. Going forward, we see a great emphasis on combining these two initiatives, even though it’s still a very nascent stage at the board-level talks and C-level talks. We're not seeing a huge focus on cyber security in some instances, but of course it’s changing. It’s increasing.

It's fair to say that the security and enterprise architecture will play a key role, as both concepts mingle together to bring about best practices in architecture in the early phases into planning, deployment, and delivery of the smart services.

Hietala: It’s still early in the process of really bringing enhanced security into the professional enterprise architecture. So, in The Open Group Architecture Framework (TOGAF), three of the nine iterations of it, we've added significant security information and content that enterprise architecture need to bear in mind in developing architectures.

But that work is ongoing. We have a couple of projects both to enhance the security of TOGAF, and also to work to collaborate with the Sherwood Applied Business Security Architecture (SABSA) folks, another security architecture development methodology, to harmonize those two approaches.

There's a lot of work ongoing there, and there's a lot of work needed in developing reference architectures outside of purely IT. We have a document that we are updating called Enterprise Security Architecture. It will be published this fall, and updates some work that was done five or six years ago, sort of an IT reference architecture.

From an enterprise perspective, looking at mission success and thinking about cyber security really is the Chief Information Security Officer (CISO) role inside a given enterprise. That probably is most relevant to address the issues. The interesting thing is that many of the new developments that we’re looking at -- whether it's smarter hospitals, smarter medical devices, smarter electrical grid -- are industry specific and they require a lot of cooperation between organizations in an industry.

There's a role for standards and industry organizations to pull together and come up with some common standards to facilitate better security.

There's a role for standards and industry organizations to pull together and come up with some common standards to facilitate better security, maybe better frameworks or things like that, that can be leveraged across an entire industry.

We see a need, as you start to look at cyber security and the different kinds of architectures, to develop new reference architectures to address some of these new applications of IT technology to everyday life. If you think about networks in cars or networks of smart devices comprising the power grid, what does security look like for those things? Our membership is starting to look at some of those and trying to determine where we can add some value for the industry.

Raduege: The Internet has changed our world, and the way we operate. For years, we've had enterprise architects who have been working down the hall or in the basements of organizations, and who have been trying to figure out the best way of technically aligning the Internet and all of the interconnected networks to make it work as best it could.

Now that this world of cyber has really come upon us, it has really elevated the importance of the enterprise architect into the higher levels of an organization, just because of the threats that are constantly coming upon us in our business operations and our mission success.

The enterprise architect has now gotten the attention of the C-suite executives and organization leadership. But, they don’t like to think as much about enterprise architecture, because it really has that technical connotation as my colleagues here have mentioned, we're really talking and focusing more now on the people and the process aspects of running the business properly.

The front-office people, the C-suite executives and leaders of organizations, instead of thinking about enterprise architecture from a technical aspect, are becoming much more interested in a mission architecture.

In other words, what's the architecture needed to complete my mission so that I can have success -- whatever your mission is, if it’s government activity or whether it’s industry. Mission architecture has taken on new meaning that takes into account the technical architecture, but also adds the workforce domain and the process elements of the organization.

Architecture is important, but there is no silver bullet to it. Since the smart concept is industry-wide and is global, there could be many references to architectures that could go in.

So, mission architecture is really pointing toward business success, whatever your business is, whether it’s government operations or industry.

Sindhu: Architecture is important, but there is no silver bullet to it. Since the smart concept is industry-wide and is global, there could be many references to architectures that could go in. Some things have started to happen.

For example, the Department of Homeland Security came over to IT risk baseline about a year-and-a-half ago. It collaborated with the IT vendors and IT sector in general and started to create this risk baseline, which comes about in the earlier phases of architecture.

As you develop a framework, you take feeds from the various industry standards and regulatory compliance mandates and you start to create a risk baseline, a risk profile that touches every single silo of people, process, and technology. Over the time, you do the collaboration, internally, but externally as well.

Hietala: Definitely there is a need for increased public-sector and private-industry cooperation. We have an initiative here, The Open Group's Acquisition Cybersecurity (ACS) Initiative. It was brought to us by the Department of Defense as a consulting effort. They wanted an organization to pull together private industry and try to drive some standards looking at the supply chains to the major IT suppliers. That work is ongoing and that would be a good reference of an initiative like that.

Sindhu: The role of the architecture and security has to be involved right from the planning phase, where you manifest the value of security being built in, either to the products or in general to the architecture? That has to be the first step -- that we acknowledge the need to embed that into the overall process.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Read a full transcript or download a copy. Sponsor: The Open Group.

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Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Read a full transcript or download a copy. Sponsor: Ariba.

Welcome to a special BriefingsDirect podcast coming to you from the Ariba LIVE 2010 Conference in Orlando.

This podcast is a presentation of a May 25 stage-based panel event on the implications of cloud computing for procurement, supply-chain management, and a host of other business functions. For those of you unable to attend the actual conference, please now listen to this lively and informative panel by a group of noted industry analysts.

Here is the moderator of our discussion, Tim Minahan, Chief Marketing Officer at Ariba.

Minahan: When discussing heady topics like the cloud, procurement, and finance, and looking at the future of business-to-business (B2B) commerce, we thought it important for you to hear from the experts. So we have assembled a panel of the leading analysts -- the folks that you turn to to benchmark your performance, uncover best practices, and make IT buying decisions.

I'd like to welcome our panelists: Mickey North Rizza from AMR Research (a Gartner company), Chris Sawchuk from The Hackett Group, Robert Mahowald from IDC, and Bruce Guptill from Saugatuck Technology.

Here are some excerpts from the discussion:

Guptill: The first thing is to figure out how to handle this cloud thing. It's the single most disruptive influence that we've seen in not just IT, but in how IT is bought, used, paid for, and how that affects how everybody does business. So how is it accounted for? Who has responsibility for managing what aspects?

If you have some of it on-premise and some of it out in the cloud, who is responsible? How is it managed? How is that budgeted for?

If you have some of it on-premise and some of it out in the cloud, who is responsible? How is it managed? How is that budgeted for? It changes the way we operate as a business, because it changes the way we spend, the way we buy, and the way we manage. It's very, very disruptive, and policies and practices really haven’t caught up yet to the reality, and we're not getting a breather. The change is accelerating.

Sawchuk: When we ask procurement executives what are they focused on going into 2010 from a technology standpoint, the number one area is just utilizing better the technology investments that they have made -- digesting them. So, it's a lot of the basics -- cleaning up our master data and just getting more utilization on our eProcurement, eSourcing types of tools in the organization.

But there are a couple of emerging trends that are occurring in the most progressive procurement organizations, in three areas. One is around collaborative technologies. Why is it so difficult to do this in business, when it's so easy with Facebook and all that type of stuff in the non-business type of world? It's not just externally that this applies, but internally as well.

The cloud offers a way to do that a lot more quickly, for less cost, in a way that is still as secure and authenticated as it would be in my IT shop.

Number two, around better management of the knowledge and intelligence across the organization, structured, unstructured, internal, and external types of information.

And lastly, driving more agility into the procurement service delivery model, which includes the technology tools.

Mahowald: For the last 10 years or so, we have seen lines of business start to get more acclimated using software-as-a-service (SaaS) services. Some of those lessons are how those services are delivered and filtered back to IT.

Virtualization, automation, and standardization are finding their ways into our IT departments and they're finding ways to do things like reduce the number of physical assets they spend their time counting, and keep them up and running, and rely more and more on external services that can safely provide the functionality that their users require.

And the typical scenario is that, if I am in the line of business and I want to build an application, or I need to have access to an IT service, I've got to go to my IT team. It can often be long and time-consuming to get that thing spun up and tested, kick all the tires, and get it up and running in the environment that is being used.

The cloud offers a way to do that a lot more quickly, for less cost, in a way that is still as secure and authenticated as it would be in my IT shop, and probably done in a way that is much, much more service enabled, for the ultimate constituency I want to serve, my user, the internal user. So, it's a big opportunity.

North Rizza: Basically, what we're seeing is that companies have a lot of pent up demand over the last couple of years. They haven't been able to change some of their business processes and automate them the way they would like to. What they've been doing is standing back, trying to get more out of their ERP systems or basic business processes. They've had to make a lot of cuts and they're not getting everything they need. What we're finding now is that spending is starting to pick up.

We're also finding that companies are looking for alternative deployment models. They're starting to say, "What can I do above and beyond just the technology application? Where else can I look for services and other opportunities that are, one, going to quickly drive value to my line of business buyer, because those are the folks that do the business day in and day out? They're the ones that need to make a difference. And finally, how do I do it quickly, without a lot of disruption, very flexible, and a great investment, but a really quick return on that investment?"

Sawchuk: When we asked CFOs in the broader enterprise, coming into 2010, what was the number one area of focus for them, it was cash. When we asked the same question to the procurement executives and community, it was cost. Cash was number 10. So the question is, are we misaligned or do we feel that we have done everything we can over the last 18-24 months and there’s nothing more to do?

When you look at this, procurement and the data as just being cost focused are fading. We've got to get much more balanced in the way we actually deliver our value, not just cost, but also working capital and other areas as well.

You wanted some examples of what these world-class organizations do around working capital and how they do it well. Number one, they measure it. They bring visibility to it. They put it on their scorecards. They have cash conversions, cycle time matrix, DPO, DIO, etc.

Number two, they manage it and the source-to-settle, purchase-to-pay process.

Number three, they create collaborative communities with procurement, with the business, finance, and treasury, around working capital strategies and objectives.

And, fourth, they actually compensate. We see organizations out there where some of the procurement folks and these folks on these collaborative communities are compensating. Up to one-third of their compensation is based on their achievement of working capital objectives.

Mahowald: In many IT organizations, as much as 55 percent of the budget is spent on keeping systems running, and that involves paying for the ongoing license and maintenance and support of software and hardware and all the power pipe cost that it takes to run an IT center.

The ability to reduce some of those costs by outsourcing them in lower-cost subscription models that are operating costs is an enormously helpful transition for many customers. CIOs that we talk to are excited about introducing cloud services and also what we call naked compute services or offsite storage to improve the efficiency of certain applications that are widely used in the organization or offsite development platforms, where they can actually build applications.

It’s a major activity for many IT organizations to build new applications, objects, and customizations on-site. If they can offshore that and not have to pay application licenses or infrastructure cost, that’s a big help to them in lowering their fixed-cost structure. Ultimately, it's a big help to make IT organizations much more lean and responsive to their needs.

Guptill: If you can take the software and put it in the cloud, and if you can take the hardware and the infrastructure service, the IT, and put it in the cloud and take advantage of that, we have all these vendors -- let's take Ariba for an example -- that have these terrific technologies, applications, and the expertise to use them. Why can’t that be delivered and used as a service, as a utility, cloud-based or otherwise?

Then, we have the business logic, we have the software, the applications, the functionality, and the technology, to make it happen. We can do that as an as-needed, on-demand, or subscription basis. It removes a lot of the fixed cost that we've been talking about. It reduces our reliance on fixed assets or fixed cost for what could be cyclical or temporary needs in terms of functionality. It's basically outsourcing business tasks, business functions, or business processes to the cloud. It's "cloud temping" basically.

Over time, these things start from very simple, straightforward, and standardized capabilities, similar to what SaaS, or infrastructure as a service (IaaS) started as, but we are seeing them start to evolve into more configurable or more customizable capabilities.

Pool of functionality

So that we can now -- it's just starting now, but will be much more over the course of the next four or five years -- take advantage of a large pool of business functionality that we don’t want to buy. It's not just a technology. It's not just a software. But it's the business tasks that we don’t want to buy, we don’t want to train, and we don’t want on our books. We can rent those as we need them, and when the work is done, they retire back to the cloud.

North Rizza: We found that 96 percent of those in our studies are using cloud-based solutions, but out of that 96 percent, 46 percent are geared into a hybrid cloud solution. And by hybrid we mean that they're actually using cloud technology applications. They're optimizing those against their IT on-premise investments, and further, they're extending the capabilities into cloud services technology. So they're looking at the whole gamut.

When it's executed well and done well, it allows you to execute on your working capital and supplier payment types of strategies.

The second part of that is the next leading area, and that’s 41 percent around a private cloud. The difference there is that they're looking at technology capabilities from the cloud and they're putting that with their ERP or on-premise IT investments, but they're not necessarily extending those capabilities.

... We found that those that actually deployed cloud solutions, technologies, and services and put them out there, found anywhere from 5-7 percent difference in greater value, just by deploying, versus those that are thinking about it or trying to get into the mode of, "We want to go down that path and we are thinking about that investment process."

What were the benefits? It's really interesting. The first is that they were able to drive more revenue. Understandably, if we get those cloud-based solutions, we're going to drive more revenue. If you think about that gap from 5-9 percent, that’s huge, on a revenue standpoint.

Two other points: the cost-to-serve model. They're able to look at what their costs are, what are costing to serve from the enterprise, all the way through their trading partners, all the way back out into where the demand cycle begins, from a supply chain perspective. They get more savings, and those two go hand in hand. Then lastly, it's around that business cycle time improvement aspect.

... So, while we see this as a big area, and companies keep going down this path, one of the things we also find is that it really means a sharper focus on master data management (MDM), your business processes, how that’s orchestrated, both inside the enterprise and externally into your trading partners, and understanding your governance structure. We'll see more and more of that come out, as time goes on here.

Sawchuk: We've been talking about the cloud. How does it help? First of all, and you've heard a lot about this, cloud gives you much faster, easier, and more economical access to technology solutions. Now that you're connected, you can speed the transactions across your supply base, etc.

More importantly, it gives you much more predictability in your ability to execute. For example, a lot of us say we moved our terms. We moved our terms from 45 to 60 days. When we do that, the suppliers say, "When we were on 45, you couldn't pay me on time. You moved it to 60. Can you pay me now on time?" It gives you some predictability in the execution. That's important to them.

Number two is, if you negotiate early pay discounts, you have the ability to execute and take advantage of those kinds of things that you have in your commercial agreement.

The cloud also does a couple of things. It certainly brings much more visibility to the overall activities that are occurring across the entire source-to-settle process. But also, once you are connected in this whole cloud environment, it certainly gives you access to intelligent services that exist out there. I'm talking about working capital, things like information about the financial health of your suppliers, their historical performance, the cost of capital, etc.

That kind of collision between outside the cloud and inside the organization is going to change and it could change business pretty dramatically.

Mahowald: We talked about lower cost, leaner IT organizations, because they are able to source outside of the organization, and get lower cost services. We think that kind of collision between outside the cloud and inside the organization is going to change and it could change business pretty dramatically.

Where business happens

Another thing is that, when you've got solutions that are brought in by business users -- maybe it's a salesforce.com or some other SaaS application -- it's important to them, and it's important for them, to get agility and speed to that functionality, but there are going to be many places where you are going to be brought outside of your organization, because that's where business happens.

Whether it's in a commerce cloud or another forum or marketplace for the exchange of products, you will be forced there essentially to do business, to maintain your presence in the game, see that transparency, and have it help your business. We think that's probably the most likely place for that collision to occur.

Guptill: We've researched, interviewed, and surveyed a little over 7,000 executives worldwide -- finance, procurement, HR, IT, line of business -- over the last six or seven years about what it is that they want to do with cloud IT, whether it's SaaS or IaaS, platform as a service (PaaS) or whatever. In every single case so far, they're using it to add to what they have. It's filling in the gaps. It's enabling better efficiencies, better cost. It's delivering benefits that they could not get earlier cost effectively.

When you think about it, that’s the pattern of IT investment over the last 50- 60 years. It's very, very rare that we replace what we have with whatever new is coming in. There's all this hype about new stuff is coming and it's going to change everything. It's going to get rid of this. We are going to dump that.

Within four to five years, by year end 2015, more than 50 percent of new IT spending will be in the cloud for the first time.

Our latest survey research, which we are just in the process of publishing right now, very strongly indicates that within four to five years, by year end 2015, more than 50 percent of new IT spending will be in the cloud for the first time. That’s within four or five years. But, that means that about 50 percent, or a little less than half, is still going to be on-premise, so that stuff is not going away.

So, over time, what's going to happen is that we have a series of decisions to make. What costs are we trying to control? How are we going to change our purchasing, procurement, management, payment, relationship management, and so on?

Then, as our traditional on-premise systems, not all of them, but as each one comes up, as they reach the end of their useful life, what do we do? Because traditionally, we would add to them, we would just build out around them, until they take over the entire data center, or we would outsource. Now, we have a combination. We can put some in the cloud and some on-premise.

Those are the decisions that we're going to have to face, as we go ahead. What goes out there? What stays in here? What goes in between? The stuff has to be made to work together. Who has that responsibility? What's it going to cost? How is that going to be budgeted? And how are we going to manage all this?

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Read a full transcript or download a copy. Sponsor: Ariba.

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They say we have big brains because we have all needed to work better together over the past 150,000 years. The more people work together, the more tools they need to make collaboration a productive art, rather than a befuddled mess.

Rather than wait for human evolution to keep up the pace, Salesforce.com yesterday delivered its Chatter cloud-based collaboration service, based on social networking methods more common on Facebook or Twitter.

Directed first at enterprise help desk and customer service processes, Chatter has the strong potential to become a company-wide collaboration accelerant. And if that happens, more data and insights into what people do to solve problems can be identified, refined, repeated, automated, and extended. The cloud model makes this easy to afford, to get to and to expand.

Chatter, and its ilk quickly sprouting up elsewhere, can foster better, targeted and self-directing collaboration; can spur and capture the data about processes in progress, and can become a service feature within nearly any business application, process or ecosystem.

Email can not do this. Instant messaging, no. Portals, not quite. Chatter shows that email's role is overextended, counter-productive, and in need of a replacement.

But what caught me by surprise in watching Salesforce.com's Chairman and CEO Marc Benioff introduce Chatter yesterday in San Jose, CA, was not that consumer-focused social media motifs have a place in the productivity enterprise portfolio. What screams to me of "killer app" is that the data from social interaction are freer in the enterprise than they are on the open Web.

The data and analytics derived from Chatter are not defined by privacy boundaries, or the attempt to define and maintain them. Any user company controls the data, and so the data is free to be cultivated, consumed, analyzed, reused, extended, captured, codified, integrated, innovated from.

The data from social media and network activities in the enterprise therefore is far more free and open to the enterprise needs than Facebook, Twitter, Yahoo or Google are free to use or share the data they have about what their (your) users do.

Virtual scrum for the rest of us

Chatter helps to sort out what comes next when processes and people collide. Like with our communicative ancestors as they faced challenges in the dynamic wild, self-selecting groupings, pairings and open-ended dialogue about how to react to a situation can arise and amend via Chatter. This is a tool that entices and abets collaboration, rather than confines or stifles it. Too often machine-made silos confine today's online interactions into point-to-point email threads that swiftly run aground.

The sweet spots to try out these cloud- and participant-accelerated cooperative scrums are help desk, service desk and IT. But it can and will go much further. Already more than 6,000 of Salesforce.com's customers have adopted the new social collaboration application, out of 77,300 potential customers for the San Francisco-based SaaS business applications and services development platform provider.

HP has seen the powerful confluence of IT functions and social networking tools and UIs, as evidenced by its limited-beta 48Upper SaaS collaboration tool. I received a demo of 48Upper last week, and all the things that make Chatter powerful work there as well. I hope HP targets 48Upper beyond the IT department. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

For while such uses as in software development and IT support are a no-brainers for Chatter and 48Upper, as they align well with agile and scrum methods, this is but the beginning. In a fast-paced business world, these app dev principles now have huge relevancy across many more business functions and processes. And Chatter can be the catalyst for doing so. It fits in well with Japanese kaizen and Deming-derived thinking too.

What's more, Metcalfe's Law has a supporting role, in that the more people that use Chatter, the more valuable it is; and there's a qualitative branch to the support -- the better the dialogue and sharing, the higher quality the thinking in the Chatter ongoing scrum, the more everyone benefits. This is the 100,000-year-old self-reinforcing frontal lobes cognition that makes us our human best ... together.