Processing business

How technology is driving the evolution of business, just as business must drive tech

This week Ephraim Schwartz reports on “business process utility,” an outsourcing concept showcased in a recent Gartner study. The idea behind BPU is that companies will increasingly buy certain noncritical functions from outside providers based on a one-size-fits-all, pay-as-you-go utility model.

BPU is just the latest TLA (three-letter acronym, of course!) to emerge from the vibrant intersection between business and IT. Others include BPM (business process management), BPO (business process outsourcing or, sometimes, optimization), BTO (business technology optimization), SOA, and — more tangentially — ILM (information lifecycle management). The latter two, SOA and ILM, take center stage in Jon Udell’s Strategic Developer column and Leon Erlanger’s cover story, “Taking charge of the enterprise information lifecycle," respectively.

Although these concepts differ, they share common premises — namely, that the critical activities of businesses are encoded in IT, and that by integrating business and IT strategies, companies can achieve a competitive edge.

The very notion of a “business process” has a computer-like, algorithmic flavor. True, most business processes still involve human beings. But increasingly the work is done by machines, including a growing share of critical decisions.

The fact that such processes are mostly electronic makes concepts such as “business process outsourcing” possible. Imagine trying to farm out accounting, inventory control, or customer service back in the era when books were kept by file clerks with quill pens and all transactions were manual.

No wonder Gartner also predicts, in another recent study, that some 60 percent of IT staff will be focused on business-facing roles rather than pure technology by 2010. On a darker note, that same study asserts that IT departments at midsize and large companies will employ 15 percent fewer people in that year than they do today, largely as the result of layoffs made possible by sophisticated outsourcing.

Speaking of “business” processes, don’t miss Mark Leon’s “The looming threat of pharming”, a fascinating look at how clever thieves corrupt the Web’s DNS system to steal personal financial information.

Regular readers may remember InfoWorld warning last year that spyware, then considered mainly a threat to individuals, posed a danger to corporations. In the latest episode, 18 people were arrested in London and Israel just last week in what was described as a major corporate espionage ring that used -- you guessed it -- spyware to pry loose competitors’ secrets. Pharming raises a similar hazard, and is harder to defeat.