The economic turmoil, globalisation and changes in the world order mean that organisations must not waste time, human and financial resources on processes that can rapidly and easily be automated and managed.

Businesses need to transform themselves into agile operations capable of turning a constantly changing business environment into opportunities. Process innovation and speed of change are key for competitive differentiation.

Traditional IT solutions are under pressure to meet the demands of the business leaders and customers they serve. Businesses leaders want new ways to use computing power to meet their needs and we think part of the answer lies in the cloud and in process-centric situational applications.

A cloud is a collection of services detached from the underlying hardware. It will change businesses and the economy in many ways. One theme is already emerging.

Businesses are becoming more like the technology itself: more adaptable, more interwoven and more specialised.

These developments may not be new, but the advent of cloud computing will speed them up.

Most datacentres were one-off designs that grew over the years and many were highly inefficient.

Many web-based services are built to be integrated into existing business processes. IT systems will let organisations become more modular and flexible and this will lead to further specialisation.

In the cloud it will become easier to outsource business processes, or at least those parts of them where firms do not enjoy a competitive advantage. Companies will rely more on services provided by others.

A number of different sorts of cloud, public and private, will divide into general-purpose and specialised ones.

People are already using the term ‘intercloud’ to mean a federation of all kinds of clouds, in the same way that the internet is a network of networks.

And all those clouds will be full of applications and services.

Situational application provisioning is a mechanism where a user can put together an ‘application’ based on normal working patterns, using readily available services.

This makes it possible to handle any business problem usually tackled by enterprise solutions, associating various web services within the context of an application.

Process provisioning is effectively an application generator within a process and is inherently more flexible, easier to provide, easier to manage and easier to use than traditional ERP-type products.

A situational application is software created for a small group of users with specific needs. The application typically has a short life span, and is often created within the group where it is used, sometimes by the users themselves.

The application often also continues to evolve to accommodate the changing needs of the team using it.

Significant changes in requirements may lead to an abandonment of the situational application altogether. Sometimes it is just easier to develop a new one.

The idea of end-user computing in the enterprise is not new. Development of applications by amateur programmers using IBM Lotus Notes, Microsoft Excel spreadsheets in conjunction with Microsoft Access, or other tools is widespread.

What's new is the impressive growth of community-based computing coupled with an overall increase in computer skills, the introduction of new technologies, and an increased need for business agility.

Most software companies think on-demand applications are a replacement for traditional business software. They could not be more wrong.

Sure, these software-as-a-service (SaaS) applications are sold as a service and paid for per-transaction, but they are developed, sold and delivered in the same manner as traditional licensed software.

The most successful SaaS companies do not think of themselves as software companies selling software on-demand, but as web companies with business users accessing a service over the internet.

These companies realise that to grow a SaaS business, they need to act more like a consumer-based web company than a traditional enterprise software company.

Process technology underpins situational applications
The cloud is the ideal mechanism for utilising extensive computing power – be that storage or specific applications such as SalesForce.com. It saves money, but doesn’t help innovate.

The cloud does not enable you to simply build applications – process technology, in its broadest sense, lets you do this. The processes orchestrate the interaction and integration of services.

Situational applications can be disruptive to compliance. Think of all those Excel spreadsheets – situational applications that run most businesses. No control, no compliance, no ownership.

Process enablement of these types of applications will provide ownership, control and auditablity – making them compliant with corporate demands without stifling innovation and change.

The cloud was initially about the datacentre and ‘standard’ applications such as SalesForce.com and Google Apps. But it has more potential than specialised applications and flexible data storage.

Focus has moved up from the infrastructure implementations to access mechanisms. The ultimate measure of success will be how the services are consumed and whether that leads to new business opportunities.

A specific type of process technology can provide an environment where business users and developers can partner on new applications from scratch or mash up services in the cloud.

These applications will probably start as situational or ad-hoc applications that are important, but not strategic. They suit process-centric deployment in the cloud.

Although not strategic these situational applications do have to be properly controlled. They have to be compliant, auditable and recorded.

They will also probably have to be fully integrated into some on-premise applications or even outsourced processes.

Organisations will also require access to on-premise enterprise applications such as SAP or Oracle and these will be accessed through private and public business application clouds.

Cheap cloud infrastructure plus innovative cloud services means you need an assembly and orchestration layer in the cloud to fully deliver useful business advantages.

Software companies that turn a blind eye to the web-based model, whether originating online, migrating to SaaS or taking a hybrid approach, will end up on the road to nowhere.

Jon Pyke is chief strategy officer at Cordys