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3/25/2005
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SmartAdvice: Workflow Software Can Help Streamline Human Processes

Now that data-centric work processes are largely automated, consider that streamlining human-centric processes can provide benefits as well, The Advisory Council says. Also, if your company's IT supplier is bought, CIOs must look at the vendor's value and address the rumor mill.

Question B: The IT industry is maturing and consolidating. If an IT supplier is acquired, what should a CIO do?

Our advice: IT industry mergers and acquisitions almost always create near-term issues for customer CIOs, even if the acquisition is beneficial in the long term. The reason is that IT is a people-centric business, and when ownership changes, turnover invariably occurs at the supplier. Additionally, the recent trend is to buy market share, which means more products will be "sunset" and support levels will be reduced.

IT Industry Consolidation Framework
The first step is to assess the source of value provided by the vendor, and hence the value delivery that's at risk. If the source of value is products, risk-mitigation strategies are far different than if the source of value is the knowledge and expertise of the vendor's employees.

The second step is to candidly assess the nature of the vendor relationship. Don't confuse the size of a relationship with its criticality. If you can easily obtain the same products or services from a secondary source, it's likely that the vendor relationship is noncritical.

With the source of value and nature of the relationship understood, you're in a position to select the most appropriate strategy for your situation.

An Example
The first step is to position the potential impact of the IT vendor transaction and quell rumors. Let's use an experience adapting to Oracle's recent acquisition of PeopleSoft and J.D. Edwards as an example. The company in question is large, and has numerous J.D. Edwards and SAP implementations globally. The IT-management team used the framework discussed above, and agreed that there was very little "product risk" because the J.D. Edwards implementations are mature. Next, the team determined that the company's relationship with J.D. Edwards was noncritical because they rarely used J.D. Edwards' professional services or support service. Accordingly, IT management could communicate convincingly that the business would continue to harvest the benefits of its J.D. Edwards implementations for at least five more years. This communication aligned business constituency discussions.

Related Links

What If Your IT Supplier Is Acquired?

Oracle's Long-Term Commitment To PeopleSoft and J.D. Edwards Products

Tek-Tips J.D. Edwards ERP Solutions Forum



The communications within the IT organization were more difficult. J.D. Edwards' technical analysts immediately concluded that their jobs were at risk (ironically, it turns out, since the management team's view was that maintaining internal J.D. Edwards expertise was important). The top internal J.D. Edwards technical analyst even requested that the company enroll him in two months of SAP training so he had a viable career path. The IT management team countered these fears by developing programs to expand job responsibilities for J.D. Edwards analysts to include non-J.D. Edwards technologies. In particular, analysts trained in J.D. Edwards were given first choice to learn about new Web services tools and radio-frequency identification technologies. As this policy was publicized, job security concerns dwindled.

-- Walt DuLaney


Beth Cohen, TAC Thought Leader, has more than 20 years of experience building strong IT-delivery organizations from user and vendor perspectives. Having worked as a technologist for BBN, the company that literally invented the Internet, she not only knows where technology is today but where it's heading in the future.

Sue-Rae Rosenfeld, TAC Expert, has more than 20 years experience as an IT project manager and business analyst, primarily in the financial industry. She has special expertise in data analysis, data modeling, and converting systems into new platforms, including mainframe to Internet and intranet server environments. In addition, she trains IT professionals in project management fundamentals and PMP exam prep. She is an active member and volunteer for the PMI New York City chapter.

Walt DuLaney, TAC Thought Leader, is an authority on the planning, design, and management of strategic business and technology initiatives. He consults extensively on strategy-alignment, project-management, and performance-measurement methods to assure that strategic initiatives are delivered successfully and operating results are verifiably improved. He is also the CEO of Adaptive RFID, an RFID software services company.

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