In the May 2003 edition of the Harvard Business Review, author Nicholas Carr introduced a controversial hypothesis that Information Technology, or IT infrastructure did not really matter. As you can imagine, the paper sent massive shockwaves up and down the spine of the IT industry, sparking countless raucous debates. In his paper, Carr proclaimed that IT follows a pattern strikingly similar to that of earlier technologies like railroads and electric power. For a brief period, these infrastructural technologies opened opportunities to gain strong competitive advantages. But as their availability increased and their cost declined, they became ubiquitous commodities. From a strategic standpoint, they become invisible, no longer enabling individual companies to distinguish themselves in a meaningful way from their competitors. Similarly, according to Carr, IT infrastructure is inconsequential to strategic advantage, which is why IT is best viewed and managed as a commodity.
IT infrastructure is likely to be commoditized as the hardware, software and networking costs nosedive. If managing IT infrastructures becomes cost prohibitive, an organization can always approach the traditional offshore outsourcing service providers who have elevated the process head count based cost reduction to an exact science. There is an entire cottage industry with large and mid-size offshore players as well as US-based outsourcers who can offer ways to migrate infrastructure management to low cost geographies. This is the best way to keep your lights on.
However, Information Technology is more than just infrastructure and keeping lights on is not enough in today's globally competitive environment. An organization's software assets form an integral part of IT and many industries drive their competitive advantage through innovative products and applications that distinguish winners from the others. For instance, if we consider a financial services company such as a multi-regional bank, along with their mission critical software systems like trading systems, treasury management systems, loan origination and processing systems, we find these are key enablers of differentiation. If they cannot retain their customers through innovation within the context of such client-facing software systems, they are bound to lose their business. Similarly, software applications such as billing, self- service and call center management systems for a communications service provider are not only business critical, but also carry the unique fingerprints of their business.

Large organizations spend significant resources in accounting and rationalizing their hardware and other infrastructure components. However, when it comes to their software assets, the landscape is strewn with a proliferation of legacy systems, duplicated applications, redundant data and nonstandard technologies across various business units. These disparate systems are notorious for causing inefficiencies and serious strain on a company's operational costs. The organization's valuable resources must spend their time and energy on maintaining, patching and fixing numerous variants and clones of applications rather than driving innovative initiatives. How can you respond quickly to the changing market dynamics if you are constantly in such a fire-fighting mode? The existing model of software development, with its traditional design-build-test-deploy thinking, is inadequate to address these challenges. In many ways, current software development projects almost force one to abandon the wealth of existing assets and institutional knowledge that could be mined for the next generation of development to create new application silos. The current software development mindset needs a new and disruptive paradigm-shift that can help organizations rationalize these silos. It is time we widened our apertures a bit.

Since Carr draws parallels from other mature industries, let u's compare and juxtapose the IT industry with another more mature industry such as auto manufacturing to capture some of the best efficiency-driving practices. If we take a page from the playbook of Honda, for example, our guess would be that Honda would be suffering from egregious inefficiencies due to its multiple product lines and fairly complex global manufacturing processes. This, however, is not the case. Instead of building discrete and inefficient silos for each vehicle line, Honda assembles vehicles from a single core platform created by consolidating and rationalizing key sub-systems such as the drive train, the heating and cooling assembly, and the braking assembly. Honda then leverages this core platform across several product lines such as Odyssey, Pilot, Civic, Accord and others, reusing more than 70% of common assets. We can only imagine the incredible efficiencies, agility and scaled economies that Honda must derive through this strategy. Others that don't follow the same suit will be faced with dire consequences. So why not unleash similar platforming efficiencies in the software development and IT industry? This could lead to a very significant and major disruption, greatly optimizing and increasing efficiencies.

Virtusa has worked with some of the most advanced and coveted enterprises in the world to define and unleash such disruptive thinking and execution. Our entire raison d'?etre is to increase software development efficiencies by introducing and accelerating development of breakthrough platforms and solutions for our clients. We accomplish this by integrating the clients' existing IT assets, consolidating redundant software applications, separating features from general domain services and taking advantage of open source and off-the-shelf software assets. Companies can then leverage these platforms within and across multiple business lines to rapidly create new consumer facing products and services. This approach enables the companies to increase operational efficiencies, reduce costs and stimulate revenue generation. Our platform development methodology is deliberately designed to create higher organizational agility through technology asset leverage.

While enterprises realize the significant opportunity vested within their existing systems and IT assets, few service providers diligently search for key IT assets that can be encapsulated and unleashed through services. Instead, most service providers are interested in preserving the status-quo: offshore companies focus on what they do best-lowering costs through labor arbitrage while integrators focus on building new systems from scratch or deploying monolithic products. It is our belief that one of the best ways to improve productivity and quality is to leverage a client's existing IT assets, identifying and consolidating a client's unique domain into core services and unleashing the efficiencies of platforming. Reduction in total code size can result into reduction in complexity and defects. We work with our clients to leverage existing assets, open source and off-the-shelf software assets to systematically increase efficiencies and agility.
While even more intriguing is the fact that due to modular, iterative and evolutionary approach to building platforms, the platform construction can be executed via global delivery model to achieve additional time and cost efficiencies. However, the competitive advantage created through increasing efficiencies through platforming, asset consolidation and leverage is far more substantial and sustainable compared to the benefits gained by merely migrating existing inefficiencies or commodities to less expensive offshore geographies.

In conclusion, I believe that the emergence of enterprises creating, owning and managing their own custom-built platforms is the beginning of a new disruptive era. Large organizations are examining their software assets with the same rigor as applied towards their financial and other assets. Those who are willing to indulge in such disruptive thinking will unquestionably push the technology envelope and find themselves gaining a formidable competitive advantage.