Service-oriented architecture - a collaborative curse?

By breaking down business software applications into separate functions, service-oriented architecture (SOA) allows companies to group them interchangeably like Legos to create new capabilities and avoid redundancies. It also allows the services to run anywhere on anyone's computer. While this is obviously a great step in the right direction of simplifying the complex web of difficult-to-use software systems currently bogging down companies, it also raises concerns about how companies will be able to differentiate and obtain competitive advantage. Because the technology is so "open" and based on standards, it is very easy to copy. It brings up one of the main difficulties with openness - it keeps you from being "special." While the positives likely outweigh the benefits, it is interesting to note that it is getting harder and harder to deliver unique value as new collaborative technology evens the playing field.

So this could be bad news for companies trying to maintain an advantage; it could be good and bad for the rest of us. Good because the collaboration and openness is likely to raise the standard of living for everyone, but perhaps bad too, if at some point we will have broken down every process and piece of information in the world into a discrete, commoditized process. Then we'll all go around spitting out generic bits of information devoid of creativity or originality and we'll be like the automatons in the movie Wall-E that float around without having to think or do anything because we've so thoroughly solved all the complexity in the world and have made life "easy."

Web 2.0 - Too much information!

A lot of articles describe how Web 2.0 allows the "under-used human potential at companies" - also called a "cognitive surplus" - to be tapped by these new "participatory tools." While I think this is true to a point, the flip side is that as more and more connections are formed and more and more data is dumped in these Web 2.0 spaces, the more complex our world becomes, and by extension the more confusing it can become.

These days, rather than simply checking our phone messages, we need to check all our social networks and browse 14 different blogs to make sure we're up to speed. Unless this volume is managed by "smart" tools that filter the noise for us, Web 2.0 will quickly become a place where "cognitive surplus" stagnates instead of resulting in any real value. While it's great to brain dump all our ideas out into the world via the Internet, there is no value until we can filter out the best ones and use them efficiently. The best tools of the future (I'm sure some already exist - like Bing - but they're hardly perfected yet) will go beyond RSS feeds and website aggregators and will actually pare down the information for us in an intelligent way.

Virtualization

From my experiences at my last workplace, I can appreciate the potential benefits of server virtualization. I worked at a small company that created e-Learning, and most of our data was stored on servers in a small room next to my office. One day during my first year there, I had to help carry two 300+ lb server racks up a flight of 20 stairs to our server room. This room was always about 200 degrees F because of the heat created by the stacks of whirring machines. Our 100-year-old office building was definitely overmatched - having been built when they expected you to maybe plug in one fan per room, not 20 energy-guzzling, heat-expelling servers per room. If virtualization technology could cut down on the heavy, hot machinery in the room next door to me, it is definitely a technology worth exploring.

Global vs. Local

Thinking about Global vs. Local issues, in most cases it now makes sense for a business to source things from wherever it makes the most economic sense, provides them with expertise, and encourages openness. While most people think of this as meaning we're now going to offshore everything, it's important to remember that in some cases, the most efficient, smartest source for something might be close by.

For example, with the local food movement, there are many good reasons to eat food grown nearby - its supports the local economy, cuts down on transportation costs, and could even provide you with antibodies to make you healthy against diseases found locally.

Thinking globally means thinking of the whole world, including sources that are far away as well as close by.

Offshoring

As I think about offshoring and whether it's good or bad, I think back to my World Economy class and the principles of labor economics. Workers are always being displaced because investment goes where the job can be done cheapest - like has happened to many factory workers in the U.S.

While this is very difficult for individual workers, who must either be retrained or retire, it is a necessary part of innovation and increases GDP and the standard of living in the long run. In that macroeconomic view, offshoring is certainly a positive - although for each individual worker this is hardly comforting.

Info Tech Management Class

I've had a Blogger account for a few years, but haven't gotten around to posting anything - until now. As part of my Info Tech Management class at the Carlson School, I will now be sharing my reactions to the class, and maybe I'll even delve into more topics if I start to feel inspired.

In today's class, we talked about how it's the intersection of business and technology that drives innovation. Having interned this past summer at 3M, where the slogan is "3M Innovation", I would agree. Without sales to keep funding the R&D, the innovation wouldn't be sustainable. But I also think this intersection creates tension, as businesspeople are constantly jockeying for territory with the inventors within companies. A successful partnership between these groups is key to maximizing innovation.

We also talked in class about "what makes you special" - an idea that should be applied to businesses who need to differentiate in order to survive. In marketing there are points of parity (things you have to do to compete) and points of differentiation (things you can do to achieve competitive advantage), but I like the idea of "specialness" because it means both different and better. You have to have some basic competency, but what makes a person or a product successful is how well they capitalize on this.