Businesses being forced to constantly innovate to compete is putting a strain on enterprise architectures, according to the former global CTO of Capgemini.
There is an increasing pressure to innovate on a local level, which is resulting in this strain, said Andy Mulholland, who was speaking at at the Open Group's Business Transformation conference this week in London.
Although retired, Mulholland still plays an active role in the IT community, where he has a prominent role in a number of organisations, including BCS, the Chartered Institute for IT.
He said that companies that have in the past relied on their strong brands are no longer able to do so, as social networks and the internet have allowed people at a local level to find out what is available for better quality, price, experience and so on.
“Take McDonald’s, it's a great brand. If you are in a strange town you go to McDonald’s because you know what the brand promises and you know what you are going to get. However, the younger generation doesn't do that now, they find out where they should go,” said Mulholland.
“You can get local recommendations and brands are suffering from this eruption. When you buy something you are not limited to brand, you can look around and find out a lot about it.”
He said that one way that companies such as McDonalds are working to fight back against this is by using social networks to make their companies local, embedding their brand in the social experience, in the hope that when people are organising to meet up via Facebook, their brand will be at the fore.
However, these companies are also having to implement new innovation cycles that rely on rapid product development.
Mulholland used the example of how McDonald’s now introduces a new burger every month, so as to hopefully encourage a 'catch it while you can' urgency amongst consumers and recommendations forced by limited availability.
He said that this directly creates problems for the IT department.
“This is constant refresh and interest. But now think about the organisation that that involves. You are in IT and now those smart guys in marketing, distribution, the restaurants, want you to add and subtract a new product every month. This involves new suppliers, new transport, new pricing, new training, promotional materials,” said Mulholland.
“Could your existing IT cope with this? Can you cope with this continuous business model activity? It's a nightmare. Absolute nightmare scenario.”
He explained that McDonald's has a series of teams that each takes responsibility for driving that new burger out each month. However, these teams are only integrated to the legacy aspect of McDonald's infrastructure via their financial reporting. Mulholland said this is doable when it is a simple product, but for more complex scenarios, integration will be essential.
“McDonalds has templates for the roles and responsibilities of the group [that creates the new burger], but they just report financially. There is not other integration,” he said.
“But a burger is a burger. If the innovation is more complicated, that's not good enough. The model is going to need integration as it scales up.”
He added: “There is a basic problem that you can innovate rapidly, do clever things, but as it scales up and as audit departments become more interested, it isn't going to work. That's the challenge for enterprise architecture, that's the challenge for platform 3.0.”