Moving to the Cloud – Should the CIO Focus More on Systems of Engagements?

In a short video, Geoffrey Moore describes the focus evolution from Systems of Records to Systems of Engagement. At the end, he highlights the fact that systems of engagement probably require a very different type of IT than systems of records.

Systems of record host the key processes and data elements of the enterprise. Most often they have been implemented prior to the year 2000 to ensure enterprise survival in the new millennium. Great efforts and vast amounts of money went into implementing these systems and adapting both the enterprise and the software to one another. Since then, these systems have continued to run reliably and support enterprise operations.

But a couple of things happened.

Users, getting acquainted with having information at their fingertips through smart phones and other mobile devices, are now asking for access to the systems of records. New interaction mechanisms, such as social media, offer new sources of information that provides a better understanding of market needs, customer demand and the overall environment in which the enterprise operates. Actually, the world is increasingly becoming digital. The boundaries between business and IT are shrinking as every business interactions these days involve the use of information technology in one way or another.

In parallel, time has been shrinking.  What we expected, 10 or 15 years ago, to take several hours or days, can now be done in a matter of minutes due to the rapid advancements in IT. Hence the new style of IT, as Meg Whitman calls it, is now required to respond to user needs. Cloud is definitely part of this transformation in IT as it provides enterprises with the responsiveness and agility required to address today’s ever changing business environment.

As enterprises decide to move to the cloud, the question - where to start? - typically comes up. In a blog entry I published over one year ago, I spoke about five use cases companies could envisage to start their cloud journey. It ultimately depends on the decision to consume services from a cloud environment (being it private, managed or public). So, the question of - which application should be moved to the cloud first? - is raised. Should we start with a systems of record or a systems of engagement?

Should we start with Systems of Record?

As stated by Geoffrey Moore, most Systems of Record have been in place for the last 10 to 15 years. They are transaction based and focus on facts, dates and commitments. They often represent a single source of the truth. Indeed, they typically have been built around a single database, containing mostly structured information. Every time information is changed, the event is logged, so one can quickly find out who did what. Data is kept in the systems for extensive periods of time to ensure compliance while access is regulated and contained. They are the core support systems for the operations of the enterprise.

A couple companies focused on the development of such systems -  the most well-known being SAP and Oracle for their financial and manufacturing systems. Other enterprises may have written their own application, being left with a small team of knowledgeable resources to maintain it. These systems are considered business critical as the company cannot operate without them any longer. They contain the “single version of the truth”. And I can speak from my own experience, even if you disagree with those numbers (for example -  if deals have been mis-categorized), you will have great difficulty convincing higher levels of management that the data is incorrect.

Some enterprises may require increased flexibility in the use of such systems; they may want increased agility and responsiveness in case of a merger or divestiture. But are these the systems we should migrate to cloud first?

What would be the benefit? Well we could probably run them cheaper; we may be able to give our users that additional levels of responsiveness, agility and flexibility that they are looking for. But on the other hand, we would have to modernize an environment that runs well and supports the business of the enterprise on a daily basis. Or we should rebuild a brand new system of record based on the latest version of the software. This may be the only option, but to me... that sounds risky.

I’ve seen a couple of companies doing this, but it was mostly in the case of a merger, divestiture, consolidation of systems or a move to a new data center or IT delivery mechanism. And in most of these cases, it turned out that capabilities available on the cloud including - automation, flex-up/flex-down and service - were not fully taken into consideration during the installation of the application.

Now, employees might want access to the systems of record through their mobile devices.  They might want a more friendly user interface.  They might want to combine functions that are separate from the original system. This is a whole different ballgame.

Using web services, we could encapsulate the system of record and give the user what they want without having to disrupt the original environment. Over time we could consider updating/transforming some of the functionality and shut them down in the original package and replace them with cloud based functionality. This reduces the risk and shields the end-user from the actual package, making it easier to transform the system of record without overwhelming disruptions.

What is different with Systems of Engagement?

Systems of engagements were developed some time after system of records - so they involve newer technologies. In particular, many of them are built around SOA principles, making them more suitable to take full advantage of cloud technology. Their objectives are interactions and collaboration. It’s all about sharing insights, ideas and nuances. They are used within the frame of business opportunities and projects making the relationships transient in nature while requiring responsiveness and agility to be set-up quickly. Access is ad-hoc and in many companies may require a partner to customer interaction. Most often, information is unstructured which makes search more difficult.

Obviously, Systems of Engagement are important, but they do not maintain the critical information needed to run a company. They are important as a mechanism to share information, gain consensus and make decisions.  However, they do not maintain the single source of the truth. That makes them more suitable for being experimented with. Their nature, needs and technologies used to build them makes them better candidates to be migrated to cloud. So, I would suggest that this is where we should start. Of course, we don’t want our end-users to be left in the cold if something happens during the migration.  But even in the worst case scenario, telephones can still be used to allow people to exchange information even if the system were down for some time.

The importance of data

Tony Byrne argues that Geoffrey Moore simplifies things by creating two clearly different categories. He points out that the issue is probably messier in real life. On the one hand, people are discussing important business decisions in collaboration systems - thereby creating records, while others may want to engage with their colleagues directly from the systems of record.  Byrne explains it in simple terms: “your colleagues are creating records while they engage, and seeking to engage while they manage formal documents and participate in structured processes. Ditto for your interactions with customers and other partners beyond your firewall.

Now, we have been able to trigger functionality from within applications for quite some time.  That’s not the issue. And the use of web services described earlier makes this reasonably easy to implement.

The focus of Tony's discussion is how the data can be moved between the systems of record and the systems of engagement. Right from the start, you should think about your data sources and information management. Again, technology exists today to access data within and outside a cloud environment. What's important is to figure out what data should be used when and where, while ensuring that it is properly managed along the way. If you access and change data in a systems of record, do it in such a way that all the checking, security and logging functionality is respected. But this should be nothing new. Companies have been integrating external functionality within their systems of record for years.


When companies look at migrating to cloud, the question of where to begin is often debated. In my mind, it’s important to show end-users the benefits of the cloud early on. That lends me to lean more towards starting with systems of engagements by either transforming existing ones or building new ones that will positively surprise users. This will get their buy-in and give IT more “cloud” to transform the remainder of the IT environment. The real question is: how far you need to go? Because not everything has to be in the cloud.  At the end of the day, you should only move what makes sense.