Knowing which layer your applications fit in is one of the most critical first steps when developing a pace-layered application strategy. In our recent newsletter article, Pace-Layered Application Strategy: A Look at Systems of Differentiation, we defined the differentiation layer and how to effectively manage it. But how do you determine if what you have is actually a system of differentiation—or something else?
Identify Systems of Differentiation
A simple way to start pinpointing systems of differentiation is to look for those applications that require equal involvement from both IT and the business. Once you know what those are, business and IT leaders need to ask two key questions:
- Does this application allow us to differentiate our processes from competitors?
- Are these solutions highly configurable with minimal need for customization?
Applications in the differentiation layer house the functions and processes that are unique to your business. They are the things that give you a competitive edge. Every department in an enterprise could have something of value to contribute in the differentiation layer. For a finance department, its contributing business differentiators might be efficient AP/AR processes and the ability to budget with great accuracy. For HR, this could include the ability to effectively recruit top talent and provide employees self-service tools.
But Wait—This Could All Change
Applications don’t exist in a vacuum. A key concept of the pace-layered approach is that applications often move from one layer to another, often downward. What was once an application for innovative new business processes is likely to gradually move its way down to the system of record, if it becomes such a critical part of the business that there would be no business without it. That’s why connective technologies like Service-Oriented Architecture (SOA) and Business Process Management (BPM) solutions come into play. The more dynamic your application portfolio, the greater your need for SOA and BPM technology.