The Technology consolidation paradox

I was demonstrating the business usage of a new BI platform to a CEO of a multinational company and telling him how much better this platform was in terms of speed to operationalise and costs than the BI platform we had deployed last year. While he was excited by the possibilities of the new platform, he also asked a very important question – with the rate at which technology is advancing, how should we manage the proliferation of technology platforms across the organisation without losing the ability to leverage our existing technological capabilities?

The traditional wisdom in the industry is to prevent proliferation of platforms, embarking on consolidation towards a single or a limited number of platforms within the enterprise to ensure economies of scale and efficiencies. But experienced industry professionals also know that platform consolidation is risky, expensive and time consuming – potentially locking the organisation into capital expenses that linger around for a long time and importantly limiting the organisation’s ability to innovate and bring in new and advanced technologies.

This leads to the paradox of technology consolidation – to consolidate or not to?

Could we still reap the benefits of consolidation without having to consolidate, yet increase our ability to innovate and adopt new technologies? I believe we could.

The trick would be to focus on building business capabilities, rather than technology capabilities, made up of people, processes and technologies, each of which should be easily replaceable without compromising the business outcomes. This would give organisations the flexibility to quickly build low cost technology platforms and change them as necessary as long as the supporting people and processes are able to quickly adapt to the technological changes.

Critical to this model would be a design thinking that promotes flexibility, reusability and agility across all components of the business capability. As an example, a cloud first design principle for technologies, especially with software-as-a-service technologies, with quick implementation, low capital requirements and smaller payback periods, will go a long way in achieving these design principles. Similarly, an organisational design that promotes the workforce’s ability to adapt to changes in the process and technologies will be critical to ensure success of this approach.

With technological advances constantly increasing competitive pressure on organisations they need to be able to embrace new technologies to survive. The traditional thinking around technology platform consolidation will hinder the organisation’s ability for such an embrace and the prevalent views need to change for long term survival.

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