Abstract
MANAGEMENT SUMMARY
CATALYST
Enterprise applications are functionally mature at the core but remain
immature in the value generation area. Technology changes are opening up more
opportunities for value maximisation at the business level but are also
increasing complexity so that, more than ever, enterprise applications need to
be viewed and managed from the multiple perspectives of architecture, process
ability, and delivery, under the banner of cost and value to the business.
KEY FINDINGS
- Enterprise applications are an easy target for cost-cutting initiatives
but inappropriate cost cutting of the core applications that run the business
undermines value and increases risk.
- Breaking down organisational silos, particularly between IT and business
units, is fundamental to exploiting the innate value of enterprise systems but
requires a collaborative culture and enterprise architecture approach.
- Applications are in a state of change - restructuring around a series of
platforms and tasked with delivering process standardisation.
- Application extension is not just about adding new functionality but
providing tools for insight, analysis, and collaboration.
- The Software-as-a-Service (SaaS) model brings its disruptive influence to
bear on the integration, ERP, and application development areas.
- Under-utilisation of existing systems is a significant issue - 50% of
standard functionality regularly goes unused.
- Standardisation is a major contributor to unlocking value and reducing
costs.
- Strategic maintenance management can improve operational costs and release
resources for valuegenerating initiatives.
- The next round of upgrades will be more challenging than normal technical
or functional upgrades but is necessary in order to support the quest for
business agility.
- Stability and flexibility appear to be mutually exclusive, but
architectural change is starting to provide a solution, thereby providing a
business case for additional investment.
- Service Oriented Architecture (SOA) and Business Process Management (BPM)
are edging systems towards the much sought after alignment between
applications and business objectives and application agility.
ANALYSIS
Introduction
Enterprise applications - integrated suites of applications used to run a
large part of an organisation' s core business - are highly mature in terms of
functionality, with some aspects qualifying as commodity operations because
there is little differentiation between the various offerings. They are far
from being commodity items in their entirety however because of their role in
automating, standardising, and executing the critical operations needed to run
a business. Investment in enterprise applications is a consistently high
priority for organisations but the unfortunate aspects of their cost and
complexity make them a prime target for cost cutting during recessionary times.
While constant evolution could be interpreted as a sign of weakness, it is
more an indication of their strategic value and a reflection of the cost and
intellectual capital tied up in them. Indiscriminate cutting will undermine
value and increase risk to the business; strategic investments to improve
efficiency or better manage interactions can release the value from existing
investments, and generate new opportunities.
This Report reveals:
- How to make the most of existing financial and intellectual property
investments in enterprise applications.
- What steps organisations can take to control the cost of maintenance and
assess its real value to the business.
- The impact of Software-as-a-Service on delivery and payment models, and
key technology and integration considerations.
- Where to direct investment in application extensions in order to secure
the most effective returns.
- How technology change around SOA and BPM is impacting the way applications
are constructed, accessed, and managed.
- The role of portfolio management and application consolidation in managing
for business value and cost effectiveness.
- Why increased utilisation of standard components reduces cost and risk to
the business.
- Why enterprise application upgrades are still so challenging and what can
be done to ease the pain.
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