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4/27/2004
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Smart Advice: Wringing More Value From Already Installed Apps

Evaluate systems already installed and consider drafting performance contracts as IT takes the lead in finding ways to improve the bottom line, The Advisory Council says. Also, understand your company's strategic goals before trying to control costs; and approach change management as you would a project.

Editor's Note: Welcome to SmartAdvice, a weekly column by The Advisory Council (TAC), an advisory service firm. The feature answers three questions of core interest to you, ranging from career advice to enterprise strategies to how to deal with vendors. Submit questions directly to smartadvice@tacadvisory.com


Question A: How do I find opportunities to deliver more value to the business from my existing installed applications?

Our advice: Every IT department has an extensive installed base of applications, full of nuggets waiting to be mined. Historically, we installed applications to solve specific business problems. No time was taken to view them from a broader perspective to find additional functional uses. As a result, we're probably using about 20%, on average, of the capable functionality we paid for. Therein lies the opportunity!

Most packages were installed with minimal upfront analysis from a business perspective. Like most projects we've done in the past, we were driven to a solution because an aggressive salesperson sold a user, or the user needed a quick fix. Both of these situations lead to less-than-adequate solutions. In many cases, both IT and the user are dissatisfied.

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That's the problem we're facing. The IT department is saddled with the blame, as well as the cost, for a less-than-efficient solution. Business sponsors and consultants can distance themselves very quickly. The IT department is placed in the position of defending the investments made, as well as being burdened with the ongoing operating costs.

Packaged software has provided us with a unique opportunity to turn this around. It's time that IT takes the lead in finding ways to improve the bottom line. IT departments need to get back to the basics of sound systems analysis, since they've eliminated this step in many projects. Remember the consulting firms that would come in and examine your telecommunications spending and offer opportunities for savings? They'd get paid as a percentage of savings generated. What did they do? They went after the easy opportunities first. Then they suggested ways that you could change specific operations and processes that would lead to more savings. This is exactly what IT needs to do for the business.

Systems Analysis 101
Just like the telecommunications consultants, you can make great strides in helping your company with a little old-fashioned analysis. Suggest process changes in all critical areas that will allow for better automation (sales, procurement, customer support, logistics, etc.). The same goes for physical facility changes. Sometimes minor physical changes can yield to huge efficiency gains. Most experienced IT practitioners know how to be a good systems analyst; this should start at the top of the IT organization.

  • Meet with the business leaders to discover their concerns, opportunities, and priorities.


  • Gain a clear understanding of the major issues facing your company in the marketplace.


  • Look at the competition, and assess where your weaknesses are.


  • Examine major business processes for areas of improvement from implementing unused functionality of existing systems.


  • Assess and prioritize your findings based on your analysis.


  • Select the highest impact and lowest complexity projects first.


  • Make sure that you have clear metrics to report results.


  • Ensure that success and or failure is equally shared between you and the user. You both need to have skin in the game.

Create A Performance Contract
IT leaders should consider creating a measurable performance contract with the business. This would include commitments from the business partners as well as IT. This way you aren't the only one on the hook. Document the business-process changes required and the benefits of them. You also should identify ownership and obligations. Having everything documented keeps everybody honest and accountable. This way, IT isn't going it alone. By the same token, make sure that you share the rewards. This will help you build strong bonds with your management peers.

-- Alan Guibord

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